L1.2R - Econ 102 Fall 2006 Lecture 1.2 Measuring economic...

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1 1 Econ 102 Fall 2006 Lecture 1.2 Measuring economic data 2 Things to learn in the lecture z Facts about data Output and hours Labor productivity and wages z Mathematical concepts How to separate a time series into a trend and a cycle How to measure the co-movements in time series using the correlation coefficient 3 We will look at facts about z Hours and GDP z The real wage and productivity z We will ask how these variables are related to each other at “high and low frequency” z First we must learn how to separate the trend (low frequency) from the cycle (high frequency)
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2 4 This is the raw data on hours per person and GDP per person z Hours per person increased from 11 to 19 z (This period was very unusual historically due to the entry of women into the labor force) z GDP per person went up by a factor of roughly four 10000 20000 30000 40000 10 20 50 55 60 65 70 75 80 85 90 95 00 GDP per person Hours per person 1 996 d olars Hours per week pe r U.S. resident 5 Detrending z Time series may be separated into two different components, trend and cycle Raw data = Trend + Cycle
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L1.2R - Econ 102 Fall 2006 Lecture 1.2 Measuring economic...

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