Double-Dip Probabilities

Donald Marron:

The Yield Spread and the Odds of Recession « Donald Marron: [H:]ow likely is a return to recession? Researchers at the San Francisco Fed [Travis J. Berge and Òscar Jordà:] took a crack at this question a few weeks ago. Their answer? It depends.

When they used a traditional model based on the leading economic indicators, the probability of a second dip turned out to be about 25% over the next two years (the blue line). When they dropped one indicator from their model...