ECON 2400 Lecture Notes - Lecture 25: Scatter Plot, Time Series, Macroeconomics
20 Apr 2017
School
Department
Course
Professor
Document Summary
While real gdp fluctuates in irregular patterns, macroeconomic variables fluctuate together in patterns that exhibit strong regularities. We refer to these patterns in fluctuations as comovement. Robert lucas once remarked that with respect to qualitative behavior of comovements among. [economic time] series, business cycles are all alike. Macroeconomic variables are measured as time series; for example, real gdp is measured in a series of quarterly observations over time. When we examine comovements in macroeconomic time series, typically we look at these time series two at a time, and a good starting point is to plot the data. Suppose, for example, that we have two macroeconomic time series and we would like to study their comovement. We first transform these two time series by removing trends, and we let x and y denote the percentage deviations from trend in the two time series.
