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Seasonal variations and secular trends

How do seasonal variations and secular trends make difficult measurement of the business cycle?

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Usually there is a pre-Christmas spurt in construction and sales and a January slackening. This usual seasonal variation does not signal boom or recession. From decade to decade, the long-term trend (the secular trend) of the Canadian economy has been rising. A period of no GDP growth therefore does not mean that all is normal however that the economy is operating below its trend growth of output.

 

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