{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ch8notes

# ch8notes - Business Cycle Analysis What do we mean by...

This preview shows pages 1–7. Sign up to view the full content.

Business Cycle Analysis What do we mean by unusually high? What do we mean by unusually low? Consider the weather. 50 ° in January is considered warm. 50 ° in July is considered cold. Temperature relative to trend. Decomposition Analysis We can do the same with GDP, etc. Standard procedures for constructing trend.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Cyclical Quantity = Actual Quantity – Trend Quantity. Cyclical Q’s allow us to define cycles. High GDP: Cyclical GDP > 0. Low GDP: Cyclical GDP < 0. Same for C, I, r, w, N, etc. Procyclical Variables: Cyclical Q > 0 Cyclical GDP > 0 Countercyclical Variables: Cyclical Q < 0 Cyclical GDP > 0 B.C.’s are more alike than different Some Q’s are consistently procyclical. Some Q’s are consistently countercyclical.
Stylized Facts Employment (P) Productivity (P) Real Wage Rate (P) Consumption (P) Investment (Extremely P) Real Interest Rate (P or A) Prices/Inflation (?: C after WWII) Money Supply (P)

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Classical Theory and the 'Stylized Facts' Fluctuations in Y Require Labor Mkt. Shocks NS Shocks: NS Y , N , w , Y/N?
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern