Lecture 20 -- Business cycle facts

Lecture 20 -- Business cycle facts - Eco320L Spring 2010,...

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Eco320L Spring 2010, Professor Beatrix Paal updated 10/11/2010 10:04 AM Lecture 20: Business Cycle Facts 1/8 Lecture 25 Business cycle facts Last time Finish discussion of money and the LM curve Today Business cycle facts ( Chapters 8.1, 8.2, and 8.3 ) Next time 1 What are business cycles? Recurrent fluctuations in aggregate activity Aggregate activity – More elements than just GDP (but usually measured as GDP) – Designated by the NBER Business Cycle Dating Committee http://www.nber.org/cycles.html Phases of the business cycle – Turning points: Peak/Trough – Expansion/Recession Co-movement between variables – Sectors of the economy (manufacturing, retail, etc.) – GDP components ( C, I, G, NX ) – Nominal and real variables ( M2, Y ) Recurrent but not periodic Recurrent means it repeats itself, but not at regular intervals – As opposed to the seasonal cycle, which is periodic Persistence – Turning points are “rare” – A decline is more likely to be followed by another decline than increase 2 PDF Created with deskPDF PDF Writer - Trial :: http://www.docudesk.com
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Eco320L Spring 2010, Professor Beatrix Paal updated 10/11/2010 10:04 AM Lecture 20: Business Cycle Facts 2/8 ABC Figure 8.1 Idealized business cycle 3 The US historical record with business cycles Traditional view: big difference between pre-war and post- war severity Severe recessions – were more frequent pre WW2 Depression of the 1870’s
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This note was uploaded on 10/25/2010 for the course ECO 320L taught by Professor Kendrick during the Fall '10 term at University of Texas.

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Lecture 20 -- Business cycle facts - Eco320L Spring 2010,...

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