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A business cycle downturn implies that the level of activity of the
aggregate economy has fallen. In discussing economic fluctuations, fine
details are properly glossed over and abstracted away. Such minutiae are
trivial in relation to the fluctuations in a five-trillion dollar
economy. But where should the line between detail and relevance be
drawn? In Discussion Paper No. 1236, Research Fellow Danny Quah
examines how a single picture of aggregate GNP fluctuations can help to
understand the diversity in disaggregated, but large and significant
sectors of the economy. He develops a simple model and econometric tools
for analysing the joint behaviour of aggregate and disaggregate
fluctuations. |
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