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The paper introduces “system priors”, their use in Bayesian analysis of econometric time series, and provides a simple and illustrative application. System priors were devised by Andrle and Benes (2013) as a tool to incorporate prior knowledge into an economic model. Unlike priors about individual parameters, system priors offer a simple and efficient way of formulating well-defined and economically-meaningful priors about high-level model properties. The generality of system priors are illustrated using an AR(2) process with a prior that most of its dynamics comes from business-cycle frequencies.

Econometrics. --- Economics, Mathematical --- Statistics --- Macroeconomics --- Bayesian Analysis: General --- Model Construction and Estimation --- Methodological Issues: General --- Time-Series Models --- Dynamic Quantile Regressions --- Dynamic Treatment Effect Models --- Diffusion Processes --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Economic growth --- Business cycles

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China is on the eve of a demographic shift that will have profound consequences on its economic and social landscape. Within a few years the working age population will reach a historical peak, and then begin a precipitous decline. This fact, along with anecdotes of rapidly rising migrant wages and episodic labor shortages, has raised questions about whether China is poised to cross the Lewis Turning Point, a point at which it would move from a vast supply of low-cost workers to a labor shortage economy. Crossing this threshold will have far-reaching implications for both China and the rest of the world. This paper empirically assesses when the transition to a labor shortage economy is likely to occur. Our central result is that on current trends, the Lewis Turning Point will emerge between 2020 and 2025. Alternative scenarios—with higher fertility, greater labor participation rates, financial reform or higher productivity—may peripherally delay or accelerate the onset of the turning point, but demographics will be the dominant force driving the depletion of surplus labor.

Demography --- Economic development --- Historical demography --- Social sciences --- Population --- Vital statistics --- Labor supply --- Population aging --- Aging of population --- Aging population --- Aging society --- Demographic aging --- Graying (Demography) --- Greying (Demography) --- Age distribution (Demography) --- China --- Population. --- E-books --- Labor --- Macroeconomics --- Production and Operations Management --- Methodological Issues: General --- Demographic Trends, Macroeconomic Effects, and Forecasts --- Geographic Labor Mobility --- Immigrant Workers --- Formal and Informal Sectors --- Shadow Economy --- Institutional Arrangements --- Demand and Supply of Labor: General --- Wages, Compensation, and Labor Costs: General --- Labor Demand --- Labor Economics: General --- Production --- Cost --- Capital and Total Factor Productivity --- Capacity --- Labour --- income economics --- Labor markets --- Wages --- Labor demand --- Total factor productivity --- Labor market --- Labor economics --- Industrial productivity --- China, People's Republic of

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Following the global financial crisis, significant uncertainty has existed around the U.S. economy’s steady state equilibrium. This paper uses a factor model to provide a new approach to estimating “the stars” (i.e. the neutral interest rate, maximum employment, and the level and growth rate of potential output) that are most consistent with a medium-term equilibrium where inflation converges to the FOMC’s two percent target. It is applicable to any country with an inflation targeting central bank. It also explicitly incorporates estimates of the extensive margin of slack in the labor market, which has proven to be an important factor in describing the post-financial crisis landscape.

Inflation --- Macroeconomics --- Money and Monetary Policy --- Production and Operations Management --- Price Level --- Deflation --- Business Fluctuations --- Cycles --- Prices, Business Fluctuations, and Cycles: Forecasting and Simulation --- Interest Rates: Determination, Term Structure, and Effects --- Wages, Compensation, and Labor Costs: General --- Econometric and Statistical Methods: General --- Methodological Issues: General --- Classification Methods --- Cluster Analysis --- Principal Components --- Factor Models --- Econometric Modeling: General --- Economywide Country Studies: U.S. --- Canada --- Macroeconomics: Production --- Monetary Policy --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Monetary economics --- Economic growth --- Output gap --- Inflation targeting --- Productivity --- Business cycles --- Production --- Economic theory --- Prices --- Monetary policy --- Industrial productivity

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This paper uses a set of routinely collected high-frequency data in low-income countries (LICs) to construct an aggregate and a comprehensive index of economic activity which could serve (i) as a measure of the direction of economic activity; and (ii) as a useful input in analyzing contemporaneous real sector performance in LICs in the absence of high-frequency, and often outdated, GDP data. It could also serve as a useful tool for policymakers to gauge short-term dynamics of economic activity and shape appropriate and timely policy responses.

Economic indicators --- Business cycles --- Gross domestic product --- Econometric models. --- Africa, Sub-Saharan --- Economic conditions. --- Domestic product, Gross --- GDP --- Gross national product --- Economic cycles --- Economic fluctuations --- Cycles --- Business indicators --- Indicators, Business --- Indicators, Economic --- Leading indicators --- Economic history --- Quality of life --- Economic forecasting --- Index numbers (Economics) --- Social indicators --- Exports and Imports --- Investments: General --- Money and Monetary Policy --- International Investment --- Long-term Capital Movements --- Current Account Adjustment --- Short-term Capital Movements --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- Trade: General --- Investment --- Capital --- Intangible Capital --- Capacity --- International economics --- Monetary economics --- Macroeconomics --- Capital inflows --- Domestic credit --- Exports --- Return on investment --- Export performance --- Balance of payments --- Money --- International trade --- National accounts --- Capital movements --- Credit --- Saving and investment --- Inflation --- Taxation --- Mathematical Methods --- Methodological Issues: General --- Computational Techniques --- Measurement and Data on National Income and Product Accounts and Wealth --- Environmental Accounts --- Business Fluctuations --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Business Taxes and Subsidies --- Labor Economics: General --- Price Level --- Deflation --- Economic growth --- Public finance & taxation --- Labour --- income economics --- Cyclical indicators --- Value-added tax --- Labor --- Taxes --- Prices --- Spendings tax --- Labor economics --- United States --- Botswana