Lecture 3 Slides Long - L ECTURE 3 Postwar Fluctuations...

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Unformatted text preview: L ECTURE 3 Postwar Fluctuations January 24, 2012 Economics 134 Christina Romer Spring 2012 David Romer I. P OSTWAR F LUCTUATIONS IN E CONOMIC A CTIVITY GDP does not grow smoothly. Unemployment varies significantly, and sometimes rises sharply. What Is a Recession? Recessions are identified judgmentally by the National Bureau of Economic Research. The NBERs definition: A recession [is] a significant decline in economic activity [that] spreads across the economy and can last from a few months to more than a year (emphasis added). Postwar recessions vary in frequency, duration, and size. Okuns Law A shortfall of GDP growth from normal of 2 percentage points is usually associated with a rise in the unemployment rate of about 1 percentage point. In recessions, the work week and output per hour usually fall. (And labor force participation usually falls as well.) Short-run fluctuations in output are distributed very unevenly over the components of output. over the components of output....
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This note was uploaded on 02/28/2012 for the course ECON 134 taught by Professor Davidromer during the Spring '12 term at University of California, Berkeley.

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Lecture 3 Slides Long - L ECTURE 3 Postwar Fluctuations...

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