Three Simple Techniques to Analyze a Complex Economic Phenomenon: The Case of Profits

John Silvia and Azhar Iqbal

Business Economics, 2010, vol. 45, issue 2, 116-125

Abstract: This paper seeks to characterize the behavior of profits over the business cycle as a model for analyzing any economic series by a practicing business economist. It addresses three fundamental questions about profits that are common and critical to identifying the behavior of any macroeconomic series—mean-reversion, volatility, and trend. First, does profit growth over time exhibit mean-reverting behavior? Second, how volatile are profits, and does this volatility obscure the message of average profit growth? Third, how can we estimate a long-run trend growth component for profits and thereby separate profit cycles from its long-run trend growth component?

Date: 2010
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.palgrave-journals.com/be/journal/v45/n2/pdf/be20107a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/be/journal/v45/n2/full/be20107a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:buseco:v:45:y:2010:i:2:p:116-125

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/11369

Access Statistics for this article

Business Economics is currently edited by Charles Steindel

More articles in Business Economics from Palgrave Macmillan, National Association for Business Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().