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Forecasting Profit Trends in the Economy
Robert T. Koehler
Vol. 6, No. 4 (September 1971), pp. 33-35
Published by: Palgrave Macmillan Journals
Stable URL: http://www.jstor.org/stable/23480608
Page Count: 3
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A regression model for forecasting general profit trends in the economy utilizes a "lead indicator" approach and thus eliminates the necessity of making various "assumptions" concerning the forecast period. By using as the independent variables changes in money supply, bond yields, inventories, unemployment, and consumer prices, this regression shows an R² of 54% in estimating the change in profits two quarters out.
Business Economics © 1971 Palgrave Macmillan Journals