Economics ECON S - 1920 Lecture Notes - Lecture 1: Consumption Smoothing, Business Cycle, Demand Curve
Document Summary
Economics chapter 26: short-run fluctuations: economic fluctuations & business cycles. Economic fluctuations / business cycles: short-run changes in growth of gdp. Trend line: represents level of real gdp that economy would attain if year-to-year fluctuations could be smoothed out. Percent deviation of real gdp from trend line = 100 * (real gdp / trend) / trend: fluctuations in annual growth rate of gdp: 1) positive growth expansions/booms 2) negative growth. Recessions: periods, lasting at least two quarters, in which real gdp falls. Economic expansions: periods between recessions, begins at end of one recession and lasts till start of next recession. Peak: high point of real gdp, just before recession begins. Trough: low point of real gdp during recession, which corresponds to end of recession. 1. 1 patterns of economic fluctuations: patterns of economic fluctuations have 3 key properties: 1) co-movement of aggregate macroeconomic variables 2) limited predictability of fluctuations 3) persistence in rate of growth.
