AS.180.101 Lecture Notes - Lecture 6: Seasonal Adjustment, Inventory Investment, Business Cycle
Document Summary
Lecture #5: gdp measuring output and income part ii. Gdp: real world approximations: bea determines annual and quarterly estimates. Sales in december tend to be much higher than in january. Sales decline from december to january declines by around 18% - so we must seasonally adjust. They take a 5 year average of sales in december. A small change in your estimate of what the seasonally adjusted factor is could really change the seasonal adjusted value. Seasonal adjustment: separating signal from noise: when we seasonally adjust, we notice a much much tamer trajectory, if we don"t, the business cycle fluctuations look violent! One way to use raw data: compare comparable months or quarters, growth rate form december to december (now we compare season to season) European statistics: we have to be careful because in europe, they do not annualize growth rates, could be misleading, cannot compare directly to us annual growth rates.
