Add a lecture on business cycle empirics

[jstac]

Illustrate business cycle dynamics in a range of countries

• US
• Latin America, etc.

Show fluctuations in unemployment and GDP.

Compare with an AR(1) process with trend --- what differences do we see?

What are the stylized facts?

[HumphreyYang]

Hi @jstac,

This sounds really interesting. Could I take this issue if no one else is working on this?

Could you let me know if it is a good idea also to add consumer credit to show the contraction and expansion of consumer confidence and consumption pattern around business cycles?

Many thanks in advance.

[jstac]

@HumphreyYang: Absolutely, please do take it.

Showing consumer credit sounds interesting.

I guess the first thing we want to do is look at

1. GDP growth rates and
2. unemployment

and see how they fluctuate over time across several different countries, starting with the US.

What can we say about the dynamics --- do we see actual cycles? Or do we just see "fluctuation"?

Then we want to start to think about how other macroeconomic variables co-move with either 1 or 2, depending on which we think is more important.

@thomassargent30 will probably have more ideas about the things that we should document.

[jstac]

@HumphreyYang If you google "business cycle stylized facts" you might get some more ideas of features of the data that we could try to replicate.

[jstac]

@HumphreyYang let's merge the simple version of the lecture that you have into main. Then we will collaborate to finish it. It would be great if you could put a PR together before tomorrow morning.

(@mmcky please feel free to merge it.)

[HumphreyYang]

Many thanks for pinning me @jstac.

I can definitely put up a PR by tomorrow morning.

I was going to discuss this paper with you tomorrow: https://researchdatabase.minneapolisfed.org/concern/publications/b2773v855, which is cited by many studies researching business cycles. I can get some of the indicators (or similar) from this paper to structure this lecture. Do you think this is a good one to follow?

Many thanks.