Mathias Drehmann and Mikael Juselius — Evaluating early warning indicators of banking crises: Satisfying policy requirements

The Great financial Crisis came, for a lot of economists, out of the blue. The BIS (Bank for International Settlements) has investigated a whole lot of ‘early warning indicators’. And it seems that financial crises are predictable after all. And guess what – ‘debt’ is not neutral. And neither is money (to be more precise: the shares of different kinds of money:”cross-border liabilities plus M3 minus M2 (proxy for non-core liabilities) divided by M2 (proxy for core liabilities“). Might it have been the case that some people who did predict the crisis did look at such variables?

Real-World Economics Review Blog
How to predict a financial crisis, BIS-edition
Merijn Knibbe

BIS Working Papers No 421
Evaluating early warning indicators of banking crises: Satisfying policy requirements
Mathias Drehmann and Mikael Juselius

August 2013

Michael McAuliff — GOP Census Bill Would Eliminate America's Economic Indicators

The crazy gets crazier.

A group of Republicans are cooking up legislation that could give President Barack Obama an unintentional assist with disagreeable unemployment numbers -- by eliminating the key economic statistic altogether....

The bill, introduced last week by Rep. Jeff Duncan (R-S.C.), would bar the U.S. Census Bureau from conducting nearly all surveys except for a decennial population count. Such a step that would end the government's ability to provide reliable estimates of the employment rate. Indeed, the government would not be able to produce any of the major economic indices that move markets every month, said multiple statistics experts, who were aghast at the proposal....

"I don't know how the market reacts if there is suddenly no unemployment rate at the start of the month," Prewitt said. "How does the market react if we don't have a GDP [gross domestic product]?"

"Do they understand that these data that the Census Bureau collects are fundamental to everything else that's done?" asked Maurine Haver, founder of business research firm Haver Analytics and a past president of the National Association for Business Economics. 

Haver said she understands that a certain segment of American society distrusts the government and thinks the Census Bureau gathers data as some sort of prelude to dictatorship....

Haver suspects the move to ban data is essentially a sop to the conservative base.

"There are those users of the data, like myself, who say this is so crazy, they just couldn't possibly believe it, so it has to be something they're just throwing out there because they want to be able to cite it in some tea party affair someplace," she said.

Haver also suggested there is a fundamental divide between people who are interested in solid, reality-based data and those who are not.

"If you know what you think, you don't need information to help you assess what's going on," she said.

Like I said, crazy.

The Huffington Post
GOP Census Bill Would Eliminate America's Economic Indicators
Michael McAuliff

Do economic indicators predict presidential elections?

Nate Silver does an in depth analysis of economic factors wrt presidential elections. The conclusion? Economic indicators are not very good predictors of election results.

The broader point — and one thing this evidence is fairly definitive upon — is that the rate of change is what counts. Americans will give a fair amount of credit to a president in an economy that is still below its full productive capacity provided that it seems to be getting better.

Read the whole post (long and detailed) at The New York Times
Which Economic Indicators Best Predict Presidential Elections?