An Overview of Economic Data Su, Chapter 2, section I.
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Transcript of An Overview of Economic Data Su, Chapter 2, section I.
![Page 1: An Overview of Economic Data Su, Chapter 2, section I.](https://reader030.fdocuments.us/reader030/viewer/2022032612/56649ed35503460f94be2a53/html5/thumbnails/1.jpg)
An Overview of Economic Data
Su, Chapter 2, section I
![Page 2: An Overview of Economic Data Su, Chapter 2, section I.](https://reader030.fdocuments.us/reader030/viewer/2022032612/56649ed35503460f94be2a53/html5/thumbnails/2.jpg)
Classifications of Economic Data
• Many ways to classify economic data
• Most depend on some observable feature
• Classification helps to put the data in context
![Page 3: An Overview of Economic Data Su, Chapter 2, section I.](https://reader030.fdocuments.us/reader030/viewer/2022032612/56649ed35503460f94be2a53/html5/thumbnails/3.jpg)
Primary vs. Secondary Data
• Primary: First Hand. Generated by researcher in experiments. Common in physical sciences. Can be replicated
• Secondary: Collected by another party, typically the government. – Non-experimental– Observational– Needs careful treatment
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Time Series vs. Cross Sectional
• Time Series - “Dynamic”– Generated sequentially through time
– A measurement of the same economic agent (individual, firm, etc.)
– Dynamic
• Cross Sectional - “Static”– Generated across different agents
– At same point in time
– Static
![Page 5: An Overview of Economic Data Su, Chapter 2, section I.](https://reader030.fdocuments.us/reader030/viewer/2022032612/56649ed35503460f94be2a53/html5/thumbnails/5.jpg)
Panel Data
• Combination of cross-sections over time
• Combines features of both types
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Macroeconomic vs. Microeconomic
• Depends on level of aggregation
• Macro– Measures activity of entire economy– Reflects many agents behavior
• Micro– Measures activity of individuals
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High-Frequency vs. Low Frequency
• Time Series and Panel distinction only
• Most series are “discrete”
• Categories– Real Time– High Frequency– Low Frequency
• Hourly, Daily, Weekly, Monthly, Annual
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Frequency Considerations
• Little high frequency economic data exist
• Must use care when mixing frequencies
• Low frequency data can be treated as high frequency data aggregated over time
• Information is lost as high frequency data are aggregated
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Stocks vs. Flows
• Stock data: Measures data at a point in time– Capital stock, end of month checking balance
• Flow data: Occurs over a period of time– Investment, monthly earnings and spending
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Units of Measurement
• Data in levels: Absolute size of these variables convey sense of magnitude– Billions of Dollars
– Millions of persons
• Data in changes: Sense of dynamics. Ratios.– Growth rates
– Differences
• Economic data are typically expressed in dollar terms
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Real vs. Nominal
• Data measured in dollars must be corrected for changes in prices
• Ruler of variable length
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Indexes
• Relative comparison of values• Commonly used
– Price Indexes
– Dow Jones Index
– Industrial Production
• Laspeyers: t = (PtxQo)/(PoxQo)x100– Base Weighted
• Paasche: t = (PtxQt)/(PoxQt)x100– Current weighted
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Ratios
• Growth Rate of • GDP = (GDPt - GDPt-1)/GDPt-1x100
• Inflation = (Pt - Pt-1)/Pt-1x100
• Interest = (Dt - Dt-1)/Dt-1x100 D: Deposits
• Unemployment Rate = (LF-EMP)/LFx100• LF: Labor Force
• EMP: Level of employment
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Historical Movements
• Use Plots to depict movements– “Time Shape” or “Time Path”
• Generate characteristics or “summary statistics”
• Conveys much information
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Quarterly GDP 1947 - 1967
1000
1500
2000
2500
3000
35001947
1948
1950
1952
1954
1955
1957
1959
1961
1962
1964
1966
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30 Year Mortgage Rates 1971-1991
0
5
10
15
20
1971
1972
1974
1975
1977
1978
1980
1981
1983
1984
1986
1987
1989
1990
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Monthly Unemployment Rate
024681012
1970
1971
1973
1974
1976
1977
1979
1981
1982
1984
1985
1987
1989
1990
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First-Order Difference
• Or “First Difference”
Yt = Yt - Yt-1 for all t
• Change in Y
• If negative, Y fell
• If positive, Y rose
• Like Growth RateGR(Yt) = (Yt - Yt-1)/Yt-1 = Yt/Yt-1
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First Difference of Quarterly GDP
-100
-50
0
50
100
150
1947
1948
1950
1951
1953
1954
1956
1957
1959
1960
1962
1963
1965
1966
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Growth in Quarterly GDP
-20
-10
0
10
20
301947
1948
1950
1951
1953
1954
1956
1957
1959
1960
1962
1963
1965
1966
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First Difference of Mortgage Rate
-3
-2
-1
0
1
2
3
1971
1972
1974
1975
1976
1978
1979
1980
1982
1983
1984
1986
1987
1988
1990
1991
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Second-Order Difference
• Or “Second Difference”
Yt = Yt - Yt-1 = Yt - 2Yt-1 + Yt-2
• Change in Y
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Second Difference of Quarterly GDP
-75
-25
25
75
125
1947
1949
1950
1952
1953
1955
1956
1958
1959
1961
1962
1964
1965
1967