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Unformatted text preview: MACROENOMICS---- Week 1 On July 17, 2003, The National Bureau of Economic Research (NBER) announced that the recession that began with a business cycle peak in March 2001 ended with a business cycle trough in November 2001. This announcement has generated some degree of criticism based upon the fact that unemployment continued to rise somewhat after November 2001. Discuss: (1) How does the NBER determine the dates of business cycle peaks and troughs? (2) Should critics expect unemployment to be declining rapidly at the time of, or immediately following, a business cycle trough? Why or why not? (3) How could you use the indicator approach of the Conference Board to forecast sales revenue in your organization? If this topic doesnt apply to your organization, choose another one for which the topic seems to apply. For example, how could you use the economic indicator approach to forecast the sales revenue of Walmart? Your primary response to my posting (in 300+ words) is due on or before June 26, 2010 while your responses to classmates postings (in 100+ words) are due on or before June 28, 2010. Responding earlier to me, responding to more than one classmate, and replying to my feedback and that of your classmates will typically lead to higher grades. NBER is a private organization that by tradition determines the dates of business cycle peaks and troughs in the United States. The press release announcing the end of the 2001 recession is at http://www.nber.org/cycles/july2003.html . The NBER had previously announced the beginning of the 2001 recession at http://www.nber.org/cycles/november2001/ . See http://www.conference- board.org/economics/bci for the latest Conference Board U.S. Leading Indicator Release. 1- How does the NBER determine the dates of business cycle peaks and troughs? According to the NBERs Recession Dating Procedure article, published on October 21, 2003, the NBER committee follows standard procedures to assure continuity in the chronology. Since there are many variables in a recession that influences the economy and is not confined to one sector, the committee emphasizes economy-wide measures of economic activity. The committee views real GDP as the single best measure of aggregate economic activity. In determining whether a recession has occurred and in identifying the approximate dates of the peak and the trough, the committee therefore places considerable weight on the estimates of real GDP issued by the Bureau of Economic Analysis of the U.S....
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This note was uploaded on 07/14/2011 for the course ACCT 518 taught by Professor Neilsmith during the Spring '11 term at National-Louis.
- Spring '11