Eco 214: Intermediate Macroeconomics
Assignment:  Are Leading Economic Indicators 'leading'?

Assignment needs to be typed and the graph should be turned in.
Once you have generated the graph, answer the questions at the end


Choose one of the leading economic indicators, listed in ch. 10, and use the Fred website to plot the leading indicator along with (in the same graph) economic growth.

Make sure Fred has data on the indicator you have chosen.  Once you have found the chosen indicator, have Fred plot it for you. 
To add another variable to your graph, chose 'Edit Graph' --> 'Add Line' and have Fred search for 'gdp'. 
Once you have selected the variable you want to add to the graph, chose 'Add data series'.

To get a two-scale graph (left axis for one variable, the right axis for the other), chose 'Format' and chose for either variable 'Right' for the 'Y-Axis position'. 

Experiment with the formatting (changing a monthly series to quarterly ; change both to semiannual etc).

1. Is your indicator a 'leading one', meaning does it fall prior to recessions and does it increase prior to recessions ending?
2. Any false indicators of recessions (i.e. does your leading indicator fall substantially but is not followed by a recession?)