lecture 1 slides - econometrics laboratory, uc berkeley
TRANSCRIPT
LECTURE 1Overview of U.S. Macroeconomic
History and Data
August 31, 2011
Economics 210c/236a Christina RomerFall 2011 David Romer
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15
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25
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1/18
90
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1898
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1906
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1914
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1922
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1930
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1938
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1946
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1954
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1962
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1970
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1978
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1986
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1994
1/1/
2002
Perc
ent
Inconsistent Unemployment Data
From Historical Statistics of the United States
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10
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14
1907
1915
1923
1931
1939
1947
1955
1963
1971
1979
1987
1995
2003
Perc
ent
Inconsistent Unemployment Data
From Historical Statistics of the United States
Lebergott’s Methodology
Unemployed = Labor Force – Employed
• Labor force is overestimated in recessions.
• Employment is underestimated.
• So unemployment is overestimated in recessions.
• Just the opposite in booms.
More Consistent Unemployment Data
From Christina Romer, ”Spurious Volatility in Historical Unemployment Data”
From Joseph Davis, “An Annual Index of Industrial Production, 1790-1915”
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1790
1798
1806
1814
1822
1830
1838
1846
1854
1862
1870
1878
1886
1894
1902
1910
Loga
rithm
s
Davis Index of Industrial Production
From Joseph Davis, “An Annual Index of Industrial Production, 1790-1915”
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-0.15
-0.1
-0.05
0
0.05
0.1
0.15
0.2
1791
1796
1801
1806
1811
1816
1821
1826
1831
1836
1841
1846
1851
1856
1861
1866
1871
1876
1881
1886
1891
1896
1901
1906
1911
Percentage Change in Industrial Production
-0.20
-0.15
-0.10
-0.05
0.00
0.05
0.10
0.15
0.20
1820
1825
1830
1835
1840
1845
1850
1855
1860
1865
1870
1875
1880
1885
1890
1895
1900
1905
1910
1915
Percentage Change in Industrial Production
Standard Deviation1820-1889 0.0601890-1915 0.089
Implications of Findings
• May affect view of impact of panics in the 19th c.
• Increasing frequency of cycles after 1890 may reflect changes in price flexibility.
• Changes in volatility may reflect the emergence of demand-driven recessions.
III. MARGARET MCCONNELL AND GABRIEL PEREZ-QUIROS, “OUTPUT FLUCTUATIONS IN THE UNITED
STATES: WHAT HAS CHANGED SINCE THE EARLY
1980’S?”
Has the Great Moderation Ended?
1953:Q2-1983:Q4 1984:Q1-1999:Q2 1984:Q1-2011:Q2
S.d. of quarterly GDP growth 1.14 0.53 0.65(percentage points)
S.d. of unemployment rate 1.70 1.00 1.46(percentage points)
From J. Bradford DeLong, “America’s Peacetime Inflation,” in Romer and Romer, eds., Reducing Inflation: Motivation and Strategy (1997)
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1866
1/1/
1869
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1872
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1875
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1878
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1881
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1884
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1887
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1890
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1893
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1896
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1899
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1902
1/1/
1905
Perc
ent
Hanes's Wage Inflation Series