The Li vingston Survey: Still Useful Aft er All These Years

Abstract

The decisions of households, firms, and gov-ernment agencies depend on forecasts of the overall economy. Households face decisions such as whether to refinance a mortgage, whether to buy or lease a car, how to invest their savings, how to plan for retirement, and how to save for their children’s college education, all of which depend on the future movements of macroeconomic variables like interest rates, output, the stock market, and inflation. Those same macroeconomic variables influence the decisions of business firms about what equip-ment to buy, how to market a product, how to invest excess funds, and how to borrow to meet liquidity needs. Government policymakers need good forecasts to calculate the costs and benefits of spending programs and to estimate tax revenues. Households, firms, and governments can get macroeconomic forecasts in many different ways. Large firms and the federal government may have the resources to hire their own econo-mists to provide forecasts. Some organizations may hire a consulting firm to forecast for them. But for smaller firms, households, and local governments, for which such an expense *Dean Croushore is an assistant vice president and economist and head of the Macroeconomics section of the