We embed a news shock, a noisy indicator of the future state, in a two-state Markovswitching growth model. Our …

only actual data but also forecast data. The estimation results show new empirical evidence that anticipated future …

I compare unemployment expectations from the Michigan Survey of Consumers to VAR forecastable movements in unemployment … falling at the end of a recession even though the VAR predicts the fall in unemployment. Second, more people expect … recession even though the VAR predicts these changes. Finally, the lag change in unemployment is almost as important as the VAR …