Forecasting the Resurgence of the U.S. Economy in 2001: An Expert Judgment Approach

6. Conclusion This chapter has again demonstrated how the Analytic Network Process can serve as an additional tool for macroeconomic forecasts. In the current instance, we have used the interesting case of the U.S. economy in early 2001, which had begun to experience a slowdown during the latter part of the year 2000 after more than nine years of steady expansion, in order to forecast the time period prior to its recovery. As noted earlier, this approach could be easily adapted for use in forecasts employing formal macroeconometric models (e.g. to make judgments with respect to shifts in intercepts and changes in the values of exogenous variables). By way of validating our forecast, here is what the Wall Street Journal July 18, 2003 wrote about the subject more than two years after: “The National Bureau of Economic Research said the U.S. economic recession that began in March 2001 ended eight months later, not long after the Sept. 11 terrorist attacks. Most economists concluded more than a year ago that the recession ended in late 2001. But yesterday’s declaration by the NBER-a private, nonprofit economic research group that is considered the official arbiter of recession timing-came after a lengthy internal debate over whether there can be an economic recovery if the labor market continues to contract. The bureau’s answer: a decisive yes.”