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New Unemployment Model Can Outperform Forecasters

A new economic model can improve unemployment rate forecasts by up to 30 percent, according to research. Having an accurate forecast of the unemployment rate is important for policymakers, economists, and the business community because the jobless rate not only provides a strong signal about the state of the business cycle in real time, but also because increases in the unemployment rate have preceded the past three recessions, note authors Regis Barnichon of the Barcelona Graduate School of Economics and Christopher J. Nekarda of the Federal Reserve Board of Governors. In another paper, Author Robert A. Moffitt of Johns Hopkins University examines the trends in the employment to population ratio and finds that the decline began in the year 2000, was made worse by the recent recession, and is unlikely to bounce back any time soon. The decline is disproportionately concentrated among the less educated and younger groups -- particularly among unmarried women, he finds. In this video, BPEA co-editor Justin Wolfers discusses the research mentioned above, presented at the Fall 2012 Conference of the Brookings Papers on Economic Activity. Learn more about BPEA at:
Length: 01:49


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