Forecasting business conditions . on Measure of Variability Our statistical series, now that long range growth and sea-sonal variations have been eliminated from them, exhibit withincreased accuracy changes due to the business cycle. This,for forecasting, represents an important gain. Though they all measure cyclical changes, certain seriesexpress their measure of these changes in tons—as pig ironproduction, for instance—others in dollars, others in per cents,and others in bushels or barrels. Different units such asthese cannot be averaged, nor without more or less difficultycan they be compar
Forecasting business conditions . on Measure of Variability Our statistical series, now that long range growth and sea-sonal variations have been eliminated from them, exhibit withincreased accuracy changes due to the business cycle. This,for forecasting, represents an important gain. Though they all measure cyclical changes, certain seriesexpress their measure of these changes in tons—as pig ironproduction, for instance—others in dollars, others in per cents,and others in bushels or barrels. Different units such asthese cannot be averaged, nor without more or less difficultycan they be compared. Moreover, these series differ markedly in the extent withwhich each fluctuates. See Figure 6, for instance, in which theprice of 22 stocks are compared with 22 bonds. Stocks fluctu-ate much more widely than bonds. Were such unlike fluctua-tions averaged, or compared, items varying widely would tendto obscure the smaller, but perhaps none the less significant,fluctuations of other series. 24 FORECASTING BUSINESS CONDITIONS. Figure 6: Stock and Bond Prices Stock prices, represented by the averages of 22 leading speculative issues, fluctuate muchmore widely than bond prices, based upon 22 industrial issues. Fluctuations in both casesare measured in dollars. Bond market changes here have been more or less covered up.
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Keywords: ., bookcentury1900, bookdecade1920, booksubjectbusines, bookyear1922
