1. Lectures in Macroeconomics- Charles W. Upton Describing Business Cycles

2. Wesley Mitchell Founder of modern business cycle data

3. Describing Business Cycles Sunspots Peaks occur, on average, every 12 years. If peak (say) 3 years ago, negligible chances of a peak.

4. Describing Business Cycles Sunspots Peaks occur, on average, every 12 years. If peak (say) 3 years ago, negligible chances of a peak. If 12 years since a peak, chances of a peak are high. If 13 years, chances are even higher

5. Describing Business Cycles Sunspots Peaks occur, on average, every 12 years. If peak (say) 3 years ago, negligible chances of a peak. If 12 years since a peak, chances of a peak are high. If 13 years, chances are even higher Can we predict business cycles?

6. Describing Business Cycles Business Cycles Economic Indicators –Coincident –Lagging –Leading

7. Describing Business Cycles Business Cycles Economic Indicators –Coincident

8. Describing Business Cycles Business Cycles Economic Indicators –Coincident –Lagging

9. Describing Business Cycles Business Cycles Economic Indicators –Coincident –Lagging –Leading

10. Describing Business Cycles Business Cycles Economic Indicators –Coincident –Lagging –Leading The general idea: use leading indicators to forecast business cycles

11. Describing Business Cycles Are Business Cycles Predictable? Some Economists follow the Index of Leading Economic Indicators. I don’t.

12. Describing Business Cycles Are Business Cycles Predictable? Some Economists follow the Index of Leading Economic Indicators. I don’t. Unreliable predictions. E.g, the stock market.

13. Describing Business Cycles Are Business Cycles Predictable? Some Economists follow the Index of Leading Economic Indicators. I don’t. Unreliable predictions. E.g, the stock market. Predict sunspots. Not business cycles.

14. Describing Business Cycles Counter Cyclical and Pro Cyclical Indicators Pro Cyclical Indicator: –When the economy is growing, this indicator is growing (and vice versa) –Perhaps coincident, or leading, or lagging.

15. Describing Business Cycles Counter Cyclical and Pro Cyclical Indicators Pro Cyclical Indicator: Counter Cyclical Indicator: –When the economy is growing, this indicator is declining (and vice versa) –Perhaps coincident, or leading, or lagging

16. Describing Business Cycles Amplitude and Frequency

17. Describing Business Cycles Amplitude and Frequency Some Economists conclude the Amplitude and Frequency is declining

18. Describing Business Cycles Are Business Cycles Less Severe

19. Describing Business Cycles Some Are These were small

20. Describing Business Cycles Others are Bad These were small This one was not

21. Describing Business Cycles Frequency

22. Describing Business Cycles Our Objective Here Begin our discussion of cycles. Warning: This is not a complete discussion.

23. Describing Business Cycles End ©2004 Charles W. Upton. All rights reserved