Assignment:
Data Exercise 1:
Go to the website for the Bureau of Economic Analysis (www.bea.gov). Click on "Gross Domestic Product" next to the subject heading "National". Take a look at both the "current dollar and "real" GDP" chart and the "percent change from previous period" chart. (When looking at the former, make sure to study the quarterly, chained 2009 dollars column. Chained dollars means that the numbers are adjusted for inflation. Without this adjustment, we wouldn't be able to tell whether GDP truly increased or prices just rose). Please only consider quarterly data.
Next, visit the National Bureau of Economic Research's business cycles website (https://www.nber.org/cycles.html). The period from peak to tough is a recession, while trough to peak is expansion.
Please write a 2 page, double-spaced analysis of the data you see. Be sure to answer the following questions:
What is the economic definition of a recession? Does the business cycle chart agree with the GDP percent chart as to when the most recent recession began? When did the US economy experience the longest contraction? When did the US economy experience the longest expansion? What has been the trend for US GDP for the past year? What happened with US GDP for the most recent quarter reported?
Finally, does the published GDP information match your view as to how the economy is performing? Do you believe we are in a recession or expansion period?
Note* Here is how to read the NBER chart: If you look at the line that starts April 1865(I), the first date is the peak. The second date (December 1867(I)) is the trough. The distance between these is the next number, 32 months. This is the length of a contraction (when the economy moves from the high point (peak) to the low point (trough). A contraction is the same as a recession. The next number on the same line shows the length from the trough on the previous line (June 1861 (III)) to the peak on this line (April 1865(I))- 46 months. The is the length of an expansion. Essentially, the length of a contraction is between the two dates on the same line while the length of an expansion is between the second date on one line and the first date on the next.