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Posts tagged with: "GDPPOT"

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Celebrating 25 years: The road ahead

We’re wrapping up a week-long celebration of FRED’s first 25 years by looking ahead at the next 25 years. FRED does in fact include data about the future, at least in forecast form. The graph here shows potential output and the “non-accelerating inflation rate of unemployment” (NAIRU) for the U.S., as estimated by the Congressional Budget Office. FRED also has various forecasts from the International Monetary Fund for GDP growth and inflation rates in some countries.

So, what’s in FRED’s future? There’s no way we can fathom how FRED will look 25 years from now (interplanetary data mapping, maybe?) just as the original creators of FRED 25 years ago could not have imagined our current FRED apps, which let you use a phone to graph data as you’re walking in the park. However, without committing ourselves to all of this, here’s a sneak peak at what we’re planning for over the next few years:

  • More series. We continually add data series, and we won’t stop doing that any time soon.
  • Redesign of the FRED series page. We’re revamping the pages that display our famous FRED graphs so novice users can more easily tap into the graphing power of FRED.
  • FREDcast. The St. Louis Fed is releasing a forecasting league for major U.S. economic aggregates. Create teams with your students or co-workers and let the games begin!
  • More related content. We’re working to add more curated content for many series, pointing users to related resources.
  • More help. Improved content (including tutorials) for anyone looking for a little guidance.
  • Reimagining FRED user accounts. We’ll take a fresh look at modernizing these accounts and adding functions.
  • Better search results. Yes!
  • Better mobile apps. We’ll further enhance the iOS apps and gird up the Android apps.

As usual, we’re always open to suggestions about content and function. Use the feedback form on any FRED page (in the right margin) to send us your thoughts.

We hope you’ll still be using FRED in 25 years!

How this graph was created: On the FRED homepage, mouse over the description of FRED in the top center of the page; click on the link to all FRED series. Use the pull-down menu on the top right to sort the results by observation end (Obs End). Select the three series shown here, which appear at or near the top of the search results, and click on “Add to Graph.” Modify the units of potential GDP to “Percent Change from Year Ago.”

Suggested by Christian Zimmermann

View on FRED, series used in this post: GDPPOT, NROU, NROUST

The Taylor Rule

This graph shows in blue the Taylor Rule, which is a simple formula that John Taylor devised to guide policymakers. It calculates what the federal funds rate should be, as a function of the output gap and current inflation. Here, we measure the output gap as the difference between potential output (published by the Congressional Budget Office) and real GDP. Inflation is measured by changes in the CPI, and we use a target inflation rate of 2%. We also assume a steady-state real interest rate of 2%. These are a lot of assumptions, and you are welcome to change them on the graph by playing around with the formula to see how the Taylor Rule matches up with the effective federal funds rate. To read up on the Taylor Rule, see the original article or an article by former St. Louis Fed president William Poole.

How this graph was created: To create a new series from several series, first add the series by modifying the existing series in the “Graph” tab. Once you have assembled them all, expand the series section in the same tab and “create your own transformation.” Finally, as the axis legend has become unwieldy, remove it by checking off the mark in the graph tab.

Suggested by: Christian Zimmermann

Update: A previous version did not multiply the output gap by 100.

View on FRED, series used in this post: FEDFUNDS, GDPC1, GDPDEF, GDPPOT

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