ABSTRACT

It is a cliché to note that the economy is dynamic and that interrelationships critical in one cyclical crisis may vary both in their impact and in their importance in other crises. What is seldom realized is that statistical techniques optimally effective in exposing these changing critical relationships may themselves need to be varied or changed altogether over time. The most obvious example, perhaps, would be seasonal adjustments, the use of which was recognized but which were made only sporadically a generation ago. They were arguably less critical in earlier times, when inflation rates were less significant in their day in, day out impact on the functioning of the economy. Today, there are relatively few time series used in cyclical analysis which are not initially and routinely adjusted for seasonal variation. But there are many other examples and this chapter will concern itself with some selected from Geoffrey Moore’s work.