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12 - Calculation and Elimination of Seasonal Fluctuations [Berechnung und Ausschaltung von Saisonschwankungen] (Julius Springer, Vienna, 1936, chap. 1)

Published online by Cambridge University Press:  05 June 2012

David F. Hendry
Affiliation:
University of Oxford
Mary S. Morgan
Affiliation:
London School of Economics and Political Science
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Summary

General Remarks on the Analysis of Time Series

The current assumption made in business cycle research is that a time series is composed from four component motions, which are defined in the following manner:

  1. a) the trend: the general tendency of development over long time periods which reproduces the main course of the time series;

  2. b) the cyclical fluctuations: these are wave-shaped movements that are superimposed on the trend:

  3. c) the seasonal fluctuations: these are regular movements recurring yearly at the same time points:

  4. d) the irregular fluctuations: these are composed chiefly of smaller fluctuations often appearing to have a chance character.

The decomposition of the time series into the above four components corresponds to the notion that the time series is to be considered as the effect of four groups of causes. The trend depends on secular causes, such as population increase, industrial and cultural development, improvement in the means of transport, and so on. The cyclical fluctuations originate in changes in economic activity and conditions of profitability. The seasonal fluctuations are brought about through the influence of the weather, or by social institutions, that, calendar like, fixed and yearly, regularly bring about similar fluctuations. Finally the irregular fluctuations arise according to causes which fall under none of the other three named groups.

The task of the analysis is the quantitative determination of the separate components corresponding to the above groups of causes.

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Publisher: Cambridge University Press
Print publication year: 1995

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