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FIE403 BUSINESS CYCLE ANALYSIS
«DEN STORE KONJUNKTUR-
ANALYSEKONKURRANSEN»
DSKAKPedagogisk Time – 20. May 2014
Business Cycle Analysis -- Teaching Aims
• Good knowledge of business cycle concept, impulses and
propagation mechanism
• Do quantitive analysis of business cycle fluctuations,
decompose macroeconomic series in trend, cycle and seasonal
component and trend projction.
• Good empirical knowledge over business cycle indicators and
predictions
• Overview over macroeconomic schools of thought within modern
business cycle theories
• Overview over central theories of monetary policy and interest rate
management
• Ability to evaluate current business cycle conditions and
prospects ahead
Business Cycle Analysis -- Course Overview
• 15 lectures (G. Doppelhofer, Birger Vikøren)
• Guest lectures- Svein Gjedrem (Fin. Dep.)-Kjersti Haugland (DnB)-H.M. Andreassen (First Securities)
• A «big» practical methodological exercise
(Ole-Petter Moe Hansen)
• Participation in DSKAK
DSKAK- «Den Store KonjunkturanAlyseKonkurransen»
• Students in groups up to 5, submit predictions for 10
macroeconomic indicators that are published during
next month
• Submission by change of month February, March
and April
• «Godfathers» …
- Jan Tore Klovland
- Øystein Thøgersen
3
5
DSKAK Indicators
1. USA: Purchasing
managers index (PMI)
for manufacturing
2. USA: Leading indicator
(composite)
3. USA: Unemployment
rate
4. USA: Employment
5. USA: Housing prices
6. Norway: PMI
7. Norway: Consumer
price index (KPI-JAE)
8. Norway: Housing prices
9. Petroleumfund (NBIM):
end of month value
10. OSBEX index
11. a. end of month value
b. 10% lower bound
c. 10% upper bound
3
6
DSKAK Example – Norwegian PMI
• Total Norwegian PMI (orders received, production,
employment, delivery time, inventories over
purchsed goods) level (percent – diffusion index)
DSKAK - Example
Gruppenavn Eksempelgruppe Gruppens deltagere
Navn Studentnr Student 1 s123 Student 2 s456 Student 3 s789 Prognoser Februar Mars April
1.USA: Innkjøpssjefenes indeks for industri 57,2 2.USA: Sammensatt ledende indikator 0,8 3.USA: Arbeidsledighetsrate 6,7 4.USA: Sysselsetting 74 5.USA: Boligpriser 13,6 6.Norge: Innkjøpssjefindeks PMI 51,6 7.Norge: Konsumpriser (KPI-JAE) 2,1 8.Norge: Boligpriser -0,6 9.Petroleumsfond ved månedsslutt 5312
10aOSEBX Sluttkurs 575 10bOSEBX Nedre grense (10%) 585 10cOSEBX Øvre grense (10%) 560
Leveres på It's Learning
DSKAK Example: Inflation in Norway
• How will consumer prices change next month?!
DSKAK: and the winner is…
• Group with best predictions wins (measured in
terms of absolute deviations, extra points for «spot
on», penalties for late submissions)
• Winner receives diploma signed by Doppelhofer,
Gjedrem og Vikøren.
• Very enthusiastic participation
• Very good feedback about course in student
evaluations
Example from 2013: Skill vs. Luck
• Skill implies , pure luck
0 5 10 15 20 25 30 35 400
5
10
15
20
25
30
35
40
Rank Februar vs Rank Mars
Rank F vs Rank M
Linear (Rank F vs Rank M)
