Timing and Comovement and U.S. Data - Lecture Slides | ECON 3020, Study notes of Macroeconomics

Download Timing and Comovement and U.S. Data - Lecture Slides | ECON 3020 and more Study notes Macroeconomics in PDF only on Docsity! 1 Outline of Chapter 3 A. Timing and Comovement B. U.S. Data 2 • Business Cycles: 3 Facts – Deviations from trend tend to be persistent – No regularity in amplitude of fluctuations – No regularity in the frequency of fluctuations (time between peaks and troughs varies) Implications: – Persistence implies forecastability – Depth of a recession is hard to predict – Turning points hard to predict • Comovement: all sectors of the economy move together to some degree (both inputs and outputs) – Procyclical: a macroeconomic variable whose deviations from trend are positively correlated with deviations from trend in real GDP – Countercyclical: deviations from trend are negatively correlated with deviations from trend in real GDP – Acyclical: neither pro nor counter cyclical 5 Percentage Deviations from Trend in Real GDP from 1947--2003 6 Percentage Deviations from Trend in Real Consumption (black line) and Real GDP (colored line) 7 Percentage Deviations from Trend in Real Investment (black line)and Real GDP (colored line) 10 Percentage Deviations from Trend in Average Labor Productivity (black line) and Real GDP (colored line) 11 Percentage Deviations from Trend in the Money Supply (black line) and Real GDP (colored line) 12 Correlation Coefficients and Variability of Percentage Deviations from Trend