3 7 17 - Lecture notes 8 PDF

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A brief summary of the 8th lecture covering Real GDP, business cycle and more....

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The business cycle - Alternating periods of economic growth and contraction, which can be measured by changes in GDP. Real GDP = Nominal GDP / GDP deflator > adjusting for inflation Recession: A downturn in the business cycle Trough: The phase of the business cycle which real GDP is at its lowest, before recovery. Recovery: An upturn in the business cycle during which real GDP rise Peak: The phase in the business cycle in which real GDP reaches its maximum before a recession Indicators of Business Cycle Changes - Average work week (in hours) - Stock prices - Delayed Deliveries - New orders for plant and equipment - Money supply (cash in economy) - Material prices - Unemployment claims Lagging indicator - Unemployment rate - Unemployment duration - Inventory to Sales ratio - Outstanding commercial loans Coincident Indicators - Personal income - Industrial production - Manufacturing and trade sales - Non-agricultural payrolls...