Economics of Money, Banking and Financial Markets, The, Business School Edition (5th Edition) (What's New in Economics)
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Chapter 12, Problem 1DAP
To determine

  1. The average growth rates for the four series of the data available over the most recent four quarters and as house prices, net wealth of households, stock prices, and consumption related to your results, also comment on their relationships among themselves.
  2. For the four quarters of 2005 and for the period from 2008:Q3 to 2009:Q2, repeat part (a) again and again and then comment on the relationships, before and during the crisis among house prices, net wealth of households, stock prices, and consumption as your results relate to them.
  3. How the data from the period prior to the financial crisis and during the crisis is compared to the current household data? What you think, whether the current data is indicative of a bubble or not?

Concept Introduction:

Growth Rate: When a variable experience a percentage change occurring in a specific time period and context than that phenomena is called as growth rate and it can be referred as compounded annual rate.

Bubble: The rapid escalation of asset prices followed by a contraction is characterized as a bubble which is an economic cycle.

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