ECON 307 reading 2

ECON 307 reading 2 - independent method of calculating...

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Hall’s writing was on how the secular moving trend can be used to better predict econometrics better than the fixed trend of mx+b=y. Hall goes further by suggesting that there is no such data in economics that is in a straight line going positive or negative as a economic trend. By eliminating the fixed line and using the secular trend is more desirable when using data that can be separated into its secular, seasonal, and cyclical components. Some errors can be found bu are usually not large enough to distort any relative cyclical fluctuations, and it is desirable to have an
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Unformatted text preview: independent method of calculating current cycles so that movements on the moving trend can be verified. Alos when using the moving trend instead of the fixed line trend you tend to get more accurate results because you are using original data, and each ordinate of moving trend is based on corresponding item of original data that precede it and not those that follow. This also means that there is no relation between residuals from the fixed trend and those from the moving trend....
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