Economics 2152A/B Chapter Notes - Chapter 3: Gross Domestic Product, Time Series, Business Cycle
Document Summary
Business cycles: fluctuations about trend in real gross domestic product. Peaks: a relatively large positive deviation from trend. Turning points: peaks and troughs in the deviations from trend in real gdp. Frequency: the number of peaks in real gdp that occur per year. Boom: a series of positive deviations from trend culminating in a peak. Recession: a series of negative deviations from trend culminating in a trough. Persistent: when real gdp is above trend it tends to stay above trend, and when it is below trend, it tends to stay below trend. Time series: typically we look at these time series two at a time, and a good starting point is to plot the date. Macroeconomic variables are measured by time series. Real gdp is measured in a series of quarterly observations over time. Comovement: macroeconomic variables fluctuate together in patterns that exhibit strong regularities.