A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.



Greenspan: The Man Behind Money

Another of Greenspan's teachers during his undergrad days at NYU was Geoffrey Moore. ...Unlike some of Greenspan's other NYU professors, ...he was incredibly knowledgeable about the subject matter. Moore went on in 1995 to win the American Economic Association's Distinguished Fellow Award - an honor second only to the Nobel Prize - for his work on leading economic indicators. Moore's future inflation gauge (FIG) would prove to be one of Greenspan's favorite indicators as Fed chairman.

Moore taught statistics during his NYU stint. One of the textbooks he employed was Measuring Business Cycles, published by Arthur Burns and Wesley Mitchell in 1946. Like Keynes's General Theory, this was a landmark work. Mitchell was one of the founders of the NBER, and Burns, an eminent professor at Columbia. In reading Measuring Business Cycles, Greenspan and the other students got a taste of the NBER's rigorous approach to collecting economic data and generating statistics.

...The next step for Greenspan was graduate school at Columbia University. In the late 1940s, Columbia offered on of the best economics programs in the country, neck-in-neck with Harvard and Princeton. Exposure during Geoffrey Moore's course to the NBER statistical methods helped push Greenspan toward the school, an acknowledged seat of the empirical approach to economics. Wesley Mitchell and Arthur Burns - coauthors of the textbook used by Moore - were in large part responsible for the high profile enjoyed by the university's economics department.

...Arthur Burns was Mitchell's student at Columbia. After earning his Ph.D., he landed a teaching post at Rutgers University in New Jersey, where he in turn taught such future eminences as Geoffrey Moore and Milton Friedman. ...Burns - student of the great Wesley Mitchell, teacher of Friedman and Moore - would become Greenspan's teacher as well.