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Consumption-based macroeconomic forecasting.
- Article from:
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Economic Perspectives
- Article date:
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December 22, 2005
- Author:
- Campbell, Jeffrey R.; Krane, Spencer D.
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Copyright informationCOPYRIGHT 2005 Federal Reserve Bank of Chicago. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Introduction and summary
Macroeconomics explains the behavior of broad measures of economic activity, such as the total amount of income produced in the economy or the overall average of the prices households pay for the goods and services that they consume. Such aggregates reflect the confluence of many different decisions in product and financial markets: Households decide how much to work and what to spend; businesses commit to capital investment projects; foreigners decide on their demand for U.S. products; and governments determine taxes and spending.
To discern how particular events influence macroeconomic performance, researchers and policymakers sometimes turn ...