Lecture1(2) - Assessment More details to be on Blackboard 1...

Info icon This preview shows pages 1–11. Sign up to view the full content.

View Full Document Right Arrow Icon
1 Assessment More details to be on Blackboard.
Image of page 1

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

View Full Document Right Arrow Icon
2 Text and Key References  No single textbook but many references. No need to purchase any. Fisher Closed Reserve. Key references See
Image of page 2
3 Course Contents In this Course, We will study Ø Various models of the business cycle Ø Models of asset pricing Ø Frameworks for analysing interactions between the Business Cycle and Asset markets Ø How empirical methods are used for analysing the business cycle and asset markets Ø How to interpret data and econometric studies Ø The implications and roles of government policy.
Image of page 3

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

View Full Document Right Arrow Icon
4 Assumed Knowledge § Micro: Utility theory (indifference curve), budget constraints, production function, marginal products, neoclassical equilibrium etc. § Macro: ECON1002, ECOS2002 § Math/Stat/Ecmt: § simple calculus (differentiation), functions and equations § basic regression analysis (OLS, t-ratios, R squared) § Using Excel or a simple statistical software
Image of page 4
5 Lecture 1: Introduction to Business Cycles Concepts and Measurements What is the business cycle? v Fluctuations in aggregate economic activities. v Focus on short-run to medium-run changes. v Recurrent but not ‘periodic’. v Some predictable while others more random. v No unique definition. v We will take a broad perspective, to link theory to data.
Image of page 5

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

View Full Document Right Arrow Icon
6 Concepts and Measurements: Fluctuations in Australia’s GDP 50,000 100,000 150,000 200,000 250,000 300,000 350,000 60 65 70 75 80 85 90 95 00 05 Real GDP Long term trend Millions of Dollars
Image of page 6
7 Concepts and Measurements: Recessions in Australia 10.4 10.8 11.2 11.6 12.0 12.4 60:1 65:1 70:1 75:1 80:1 85:1 90:1 95:1 00:1 05:1 Note the log scale. Why use log of GDP? Use: yt = ln Yt Measures approximate percentage change in Yt
Image of page 7

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

View Full Document Right Arrow Icon
8 GDP Time Business Cycles:  Basic terminologies
Image of page 8
9 Business Cycles:   Concepts and Measurements Classical Business Cycles Burns and Mitchell (1946), researchers at the NBER in the US, defined business cycles as follows. Business cycles are a type of fluctuations found in the aggregate economic activity of nations that organize their work mainly in business enterprises: a cycle consists of expansions occurring at about the same time in many economic activities, followed by similarly general recessions, contractions , and revivals which merge into the expansion phase of the next cycle; in duration business cycles vary from more than one year to ten or twelve years…..
Image of page 9

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

View Full Document Right Arrow Icon
10 Business Cycles:   Concepts and Measurements According to Burns and Mitchell, ü Business cycles are not defined as fluctuations in real GDP but as fluctuations in an undefined measure of “aggregate economic activity” ü Led to the concept of a “ reference cycle ” – measured on the
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    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.

    Student Picture

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

  • Left Quote Icon

    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.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    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.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern