Business Cycles- Macro Topic 2.7

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In this video I show you the business cycle and talk about how economists predict recessions. It turns out that they aren’t even that good at it. Remember, if someone tells you that they know for sure that there is going to be a recession in a few years, they are probably selling you something.
Speaking of selling you something, you should check out my Ultimate Review Packet. It will totally help you rock your econ exams.
www.acdcecon.com/review-packet
Teachers! Are you interested in worksheets for you class. Take a look at my new Economics Case Studies worksheets: www.acdcecon.com/econ-cs-work...
In this video I also cover the four phases of the business cycle, consumer confidence, unemployment, and the Sahm rule. By the way, that study I mention that says that IMF economists only predicted 4 out of 469 recessions focuses on spotting recessions longer that a year in advance. The article is right here: www.bloomberg.com/news/articl...
Please don’t take this the wrong way. Hard working economists are all over the world, trying to make our lives better off. It’s a tough job and I tip my hat to them.
Thanks for watching my videos.

Опубликовано:

19 фев 2020

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Комментарии : 109

@garageman2236 3 года назад

“We’ll have to wait for the next recession” -February 2020

@leos8292 3 года назад

Pretty dark considering whats lies just a few weeks ahead.

@gravity7208 2 года назад

actually nope

@blackopal3138 2 года назад

I know, right... I saw that, my first thought was, 'oook, so this is how high quality Deep State propaganda productions are getting.', lmao. ... my next thought was, 'Obviously, Sahm figured something out, so they needed to crush her.'. "Every recession back to 1970! Wow, that's great, good for you." ... heh heh heh, bet your little formula didn't predict this one, did it, slave?! AH Ha ha ha ha" lol Peace

@TamzidKompass 3 года назад

1. C. Pea, Recession, Through, Recovery 2. A. Cyclical Unemployment 3. C. Unemployment and stimulus spending

@dynamisarian6576 3 года назад

Thank u for the answers.Can you pls explain the 2nd one? How did you understand?

@cristinakoga 3 года назад

@@dynamisarian6576 If the current output is less than the potential output, it means that if we were to draw it on a PPC, it would be inside the curve. This signifies unemployment. Since the potential output is anything along the line of the PPC, if we produced along that line, it would mean that all of our resources are fully employed, and we are being efficient. (Remember that full employment counts frictional and structural unemployment since they always exist, but it does NOT include cyclical unemployment.) Because of this, we know that if we are producing inside the PPC curve, there must be cyclical unemployment (which could be due to a recession). You can also see this in the business cycle graph since if the current output is less than the potential output, it means that we are producing where there is a negative output gap, which means that resources aren't being fully employed, which can be due to a recession, or if you are recovering from a recession. So the answer must be cyclical unemployment since it happens during a recession! Hope this makes sense :)

@hass1300 3 года назад

@Creed Assassin L

@Xaxoc 3 года назад

@@cristinakoga can you help to explain why each of the other answers for Q2 is wrong?

@cristinakoga 3 года назад

@@Xaxoc The last time I studied this was over a month ago so I apologize if any of this is wrong, but here: When current output is less than potential output, it means that we must be in a recession. (B) is wrong because if we’re producing at less than potential output, it means that the LRAS is located to the right of equilibrium, showing a recessionary and NOT inflationary gap. A change in inflationary expectations (C) can of course cause SRAS to shift, causing a recessionary gap but you don’t NEED to have a change in inflationary expectations to have a recessionary gap. The same applies to (D), an increase in wages would decrease SRAS causing a recessionary gap but there doesn’t need to be an increase in wages for the gap to occur. But we for sure know that there must be Cyclical unemployment (A) because it always exists during a recessionary gap. Remember that during a recession, all 3 types of unemployment exist: structural, frictional, and cyclical. (D) is unrelated to the topic and is just incorrect. Hope it helps!

@JacobAClifford 4 года назад

The answers to the practice multiple-choice questions are below. Just click on "Read more". 1. C 2. A 3. C How to get the Ultimate Review Packet Step 1: Go to: acdcecon.thinkific.com Step 2: Create a free account Step 3: Enroll in the free version of the MACROeconomics packet Note Teachers- Do not print any of the packet and give it to your students. This is NOT for in-class use. If you are interested in getting worksheets for your class, please go to my website: www.acdcecon.com/bulk-discount

@AnnetteLam 4 года назад

Hey Mr. Clifford! I just wanted to say that you have helped me so much with Micro and Macro! Even though I currently don’t take any economics courses I still enjoy watching your videos because they’re fun to watch. Keep doing what you’re doing😊👍

@maudesimard-cournoyer8439 3 года назад

Your videos are fantastic and also hilarious. Fun way to learn!. I am currently studying macroeconomics and I seriously watch your videos instead of reading my manual to understand better. Awesome job.

@huntermielke12 4 года назад

You helped me so much in AP Econ. Cant believe I'm almost a year out of High school

@michaelpisciarino5348 4 года назад

1:24 Peak, Recession, Trough, Recovery repeat 2:23 Recessions/Depressions are Depressing 2:48 A Recession is 2 successive quarters of falling GDP 3:17 The Sahm Rule - When National unemployment rises 25% or more relative to the low in the previous 12 months 3:46 Prevent Recession Pain Give people money 💵 4:17 Groundhog 4:54

@MusicalInquisit 4 года назад

The Sahm rule is when the national unemployment rate rise 0.5% or more relative to the low in the previous 12 months.

@josiahwillemse3514 3 года назад

Giving people money is not a good idea. Firstly, the stimulus package has to pass through congress. Secondly, it would probably increase the money supply, increasing the inflation rate. Thirdly, tax cuts are better. They are instant and don't increase the money supply

@fantasyplayer6634 Год назад

@@josiahwillemse3514 Stimulus is when the government collects money via taxation and then returns it to the population. A tax cut results in exactly the same thing, it just doesn't involve the government as a middle-man. Just pretend that the government never collected the tax in the first place and they're equivalent. So both would increase the "money supply" and could increase inflation. Perhaps you have confused stimulus with quantitive-easing? The main difference is that stimulus can be targeted to the people/businesses who most need it whereas tax cuts are an incredibly blunt tool which gives more money to the wealthiest people/most successful businesses. Think of it like this: if some companies are going broke, then they are the ones who need financial support - otherwise, they will go bust, unemployment will rises and the economy will stall. Conversely, if you're a business who is paying a lot in taxes, then you're most likely not struggling and are less likely to go broke. A tax cut would help precisely the wrong businesses. The same is true for the general population.

@ibethdiaztapia1033 Год назад

Thank u ! approved my exam! all the best man.! I understood a full semester in a week with your videos! :D

@kxz57 4 года назад

I dont know why am i still walking your videos after uni, i guess i just likes your vid a lot. thanks for making them!

@zachl2581 3 года назад

that’s weird

@beachwave5705 3 года назад

Dude why

@justriley6489 4 года назад

who’s watching while we’re in a recession 😘✌️

@omkarchakraborty1739 4 года назад

@aidenchavez3623 3 года назад

@collenlarson2497 3 года назад

still rocking the recession into 2021

@jt6170 3 года назад

@stringboson560 Год назад

@CoCaptain Год назад

You were born on THE best day of the year... Anyways, your videos are amazing. Thank you for the work you do.

@vincenttanudjaya7397 4 года назад

nice explanation, i didnt have enought time to keep up with my mba degree, but your video keep me educated

@r.s.j.studios 4 года назад

Happy birthday Mr. Clifford! You help so much with Econ!

@blackparadoxx9656 4 года назад

What about the inversion of the yield curve as a predictor of a recession?

@tushabeshevan2805 3 года назад

You make me want to teach♥️...you make it seem so easy

@nthperson 3 года назад

The key to forecasting economic cycles is to look at underlying land markets, which going back nearly two hundred years follow cycles of boom and bust every 18-21 years on average. Why are land markets such a powerful influence? The answer is because land is an asset with an inelastic supply. Because of generally low effective rates of taxation on the annual rental values of locations, land is subject to hoarding and speculation. Thus, the price mechanism relief upon by economists does to apply to land. Rising prices attract speculators who acquire land to hold it in anticipation of still higher prices. Under certain conditions the supply curve for land can actually lean to the left. Add cheap credit to the situation and the upward pull on land prices is even stronger. Then, as the cycle reaches the 18 year point, the stresses of land prices imposed on consumers looking for purchase a residence or move into an apartment become too great to be absorbed. This same problem occurs with regard to commercial property markets. So, the last crash occurred in 2008. Eighteen years will be here in 2026.

@SanjeetKumar-dn9qn 4 года назад

1st View 1st like Loves your ways of teaching sir #India

@anuragpandey8996 4 года назад

liar lol

@oyaoya11 4 года назад

does sahm rule work this time?

@kareemkassar9295 Год назад

Hey Mr. Clifford! Happy Birthday!

@masonkoller8962 2 года назад

Happy early birthday, bro!

@oiausdlkasuldhflaksjdhoiausydo 4 года назад

Isn’t this unpredictability of complex systems a feature? If an economist makes a prediction that prediction affects the economy so, a complete prediction about the system cannot be made from inside the system.

@user-zo3yz5lk1j 3 года назад

Happy Birthday Jacob!!!!!

@cmo1917 3 года назад

when there was a recession 23 days after this video was published

@elahez5811 3 года назад

Can u help me to apply to master of economic?

@MrMineHeads. 4 года назад

4:08 Top 10 moments before disaster

@bromine4570 4 года назад

the economists were kinda right about the 2020-2021 recession

@varunpathak9677 3 года назад

Just not for the right reasons. Here it was damn PANDEMIC 😳

@tasneem6427 2 года назад

Thanks!!! 💕

@brettdobson3122 4 месяца назад

Did the Sahm rule work for the pandemic recession? I would guess not, since it was an unusual situation.

@dynamisarian6576 3 года назад

Where is the correct ans that mr clifford gives in the comment?

@Tiberius_Gracchus 4 года назад

I'm very concerned about that gallon of milk in the background 🤣

@TamzidKompass 3 года назад

haha

@TySteve539 4 года назад

The Australian dollar just hit pre GFC lows 😬

@aaronquinn8241 Год назад

Under Sahm, if stimulus packages were delivered to households it would cause more inflation?

@navreetsingh5707 Год назад

Yes but if they were not then people would have money to spend, decreased spending will decrease business profits leading to closure. More people will become jobless because of closed businesses and spending will decrease again and this will lead to a deflationary cycle. This is why it is said that deflation is more dangerous than inflation. Hope it makes sense.

@Rumblingtummy17 4 года назад

belated happy birthday!!!!!!

@Lee-gm6cz 4 года назад

@questofgeet 2 года назад

Where’s the key for pop quiz..

@lukeebers1110 2 года назад

i guess we'll just have to wait and find out guys

@publius9207 3 года назад

4:05 You will find out very soon

@LuxEidolons 2 года назад

haha the milk bottle in the background

@newsjunkie3000 4 года назад

You shouldn't try to prevent a recession. A recession is a necessary part of the business cycle which clears out the inefficiencies and corrects the misallocations of capital.

@alexli7092 2 года назад

I think it's better to not have any recessions at all

@astridhasmin5468 4 года назад

I think we are in a new recession and the stimulus checks are happening. Interesting...

@Milton_Friedmanite 11 месяцев назад

Those economists are getting better though, those predictions at the beginning of the video obviously turned out to be true.

@split0915 3 года назад

The recession this time, was from government policy in response to the pandemic

@leopard6554 5 месяцев назад

I wish I new this in 2021...!!!😑😔😪😣😓

@sterlingweston Год назад

Sahm's time has arrived! I don't, however, think increased spending will cure it... We shall see.

@PixT Год назад

ACDC Econ

@pigwartisubscribeback8198 4 года назад

did sahm rule predict thislol

@stevenHolbrook-ng4fe Год назад

Is that milk in the background?

@juandiegomoreno9803 Год назад

The ending to this video ended up being really ironic

@Nooburd 4 года назад

winter is coming

@yvansspace5637 4 года назад

ewan wu 😭😭I was just thinking about this when he mentioned depression and suicide rates

@robertbarth3476 4 года назад

Seems like a awful system for society's to have a solid future. Unless you have plenty to lose of don't live paycheck to paycheck.

@notscarce9112 3 года назад

More unemployment , depression, divorce, suicide, etc

@ms.watakamis947 9 месяцев назад

105

@mahonishizumi6276 3 года назад

Wouldn't sending stimulus payments to households be like just tell everyone that a recession is going to happen? Wouldn't that trigger the recession earlier? The south sea bubble popped when the shares give a 30% dividend and everyone immediately know something was wrong.

@HadiKhan-vp6he Год назад

Q1. c)Peak, recession trough, recovery - (also in that order) Q.2 a)cyclical unemployment Q.3 c)unemployment and stimulus spending Not gonna lie in Q.2 I took a little help from google. sorry.

@calebjenkins3215 3 года назад

Welp, he didn't have to wait long...

@ethanbrahmawar7008 Год назад

where da milk at

@anuragpandey8996 4 года назад

1(c), 2(e), 3(c). m i right guys?

@shirlz7571 4 года назад

I think so!

@anuragpandey8996 4 года назад

@@shirlz7571 ok tenks for replying

@seanking883 4 года назад

@@anuragpandey8996 The answer to question 2 is A

@Ryan-tz2rg 3 года назад

Well this video didn't age well

@yaleetreyes2004 3 года назад

This didn't age well

@EpicGammingCrew 4 года назад

_like all complex problems, the answer is socialism_

@SourceCodeDeleted 4 года назад

This isn't necessarily socialism . Socialism dictated the seizure of the means of production and abolish profit and privatization .

@harrychristofi6725 4 года назад

+Mikey Meatball Scandinavian Socialism (Social Democracy) is the answer

@SourceCodeDeleted 4 года назад

@@harrychristofi6725 I don't think so. Many of them are super complex and convoluted . They fail to solve the problems that were created for. They are full of taxes and cycles of poverty. I would prefer a more open market of the American system.

@harrychristofi6725 4 года назад

+Mikey Meatball I agree, which is better than what the U.S has lol

@harrychristofi6725 4 года назад

+Source Code Deleted That’s bullshit 😂 Every study proves that they have a better standard of living than the U.S and they are the happiest countries on earth due to financial security since their government works for them and not rich people like the U.S