Predicting Cycles in Economic Activity

56 Pages Posted: 14 Apr 2008

See all articles by Jane Haltmaier

Jane Haltmaier

Board of Governors of the Federal Reserve System

Date Written: April 2008


Predicting cycles in economic activity is one of the more challenging but important aspects of economic forecasting. This paper reports the results from estimation of binary probit models that predict the probability of an economy being in a recession using a variety of financial and real activity indicators. The models are estimated for eight countries, both individually and using a panel regression. Although the success of the models varies, they are all able to identify a significant number of recessionary periods correctly.

Keywords: Forecasting, turning points, business cycles, economic indicators

JEL Classification: E37

Suggested Citation

Haltmaier, Jane, Predicting Cycles in Economic Activity (April 2008). FRB International Finance Discussion Paper No. 926. Available at SSRN: or

Jane Haltmaier (Contact Author)

Board of Governors of the Federal Reserve System ( email )

20th St. and Constitution Ave.
Washington, DC 20551
United States
202-452-2374 (Phone)
202-736-5638 (Fax)

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