Answered step by step
Verified Expert Solution
Question
1 Approved Answer
V) Stock Market and Business Cycles Abel, Bernanke and Croushore, 10th edition, Chapter 8, Data Problems, No. 3. It has been argued that the stock
V) Stock Market and Business Cycles Abel, Bernanke and Croushore, 10th edition, Chapter 8, Data Problems, No. 3. It has been argued that the stock market predicts recessions. Using quarterly data since 1971, plot the real value of the stock market index (the Wilshire 500 index in the last month of the quarter divided by the GDP deflator). [Note that to convert daily FRED data into quarterly data, (1) go to the FRED page for Wilshire500 https://fred.stlouisfed.org/series/WILL5000PRFC; (2) click on Edit Graph on the right; (3) a dialogue box appears and you can select frequency (quarterly) and then can choose "aggregation method" (end of period); for the ratio of two series (1) go to customize data; (2) add GDP deflator as series b; (3) type in formula a/b and apply] Do you find the stock market to be a good economic forecaster
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started