%
%    Economics 303:
%    Graphs for Lecture 1
%
%    George J Hall
%    Brandeis University
%    August 2006
%
close all
clear
%
%  First, graph industrial production
%
load INDPRO.DAT

year = INDPRO(:,1);
mth  = INDPRO(:,2);
day  = INDPRO(:,3);
IP   = INDPRO(:,4);

date = year + (mth-1)/12;

figure(1)
plot(date,log(IP))
xlabel('date (year)');
ylabel('logarithm of Industrial Production');
title('INDUSTRIAL PRODUCTION');

hold on
disp('i am pausing, hit the enter key to continue');
pause

%
%  compute and plot a linear trend
%  regress IP on a constant term and time dummy
%

T = length(IP);
X = [ ones(T,1) (1:T)' ];
Y = log(IP);
beta = inv(X'*X)*X'*Y;
annual_gr = 12*beta(2,1);

disp('annual growth rate of IP');
disp([100*annual_gr]);

trend = X*beta;
plot(date,trend,'r');
hold off
disp('i am pausing, hit the enter key to continue');
pause

%
%  Second, graph real gross domestic product
%

load GDPC1.DAT

year = GDPC1(:,1);
mth  = GDPC1(:,2);
day  = GDPC1(:,3);
RGDP = GDPC1(:,4);

date = year + (mth-1)/12;

figure(2)
plot(date,log(RGDP))
xlabel('date (year)');
ylabel('logarithm of real GDP');
title('GROSS DOMESTIC PRODUCT');

hold on
disp('i am pausing, hit the enter key to continue');
pause

%
%  compute and plot linear trend
%  regress GDP on a constant term and time dummy
%

T = length(RGDP);
X = [ ones(T,1) (1:T)' ];
Y = log(RGDP);
beta = inv(X'*X)*X'*Y;
annual_gr = 4*beta(2,1);

disp('annual growth rate of RGDP');
disp([100*annual_gr]);

trend = X*beta;
plot(date,trend,'r');
hold off
disp('i am pausing, hit the enter key to continue');
pause

%
%  compute and plot deviations of RGDP from its linear trend
%
deviations = 100*(log(RGDP) - trend);

figure(3)
plot(date,deviations,date,zeros(T,1),'r');
xlabel('date (year)');
ylabel('GDP deviations (in percent)');
title('LINEARLY DETRENDED GDP');

disp('i am pausing, hit the enter key to continue');
pause

%
%  A more flexible trend, the Hodrick-Prescott trend.  For now, you can
%  treat this as a black box
%

[hp_tr,hp_dev] = hptrend(log(RGDP),1600);

figure(4)
plot(date,log(RGDP),date,trend,'r',date,hp_tr,'g');
xlabel('date (year)');
ylabel('log(GDP)');
title('LOG GDP AND TWO TRENDS');

disp('i am pausing, hit the enter key to continue');
pause

figure(5)
plot(date(1:floor(T/3)),log(RGDP(1:floor(T/3))),date(1:floor(T/3)),trend(1:floor(T/3)),'r',date(1:floor(T/3)),hp_tr(1:floor(T/3)),'g');
xlabel('date (year)');
ylabel('log(GDP)');
title('LOG GDP AND TWO TRENDS');

disp('i am pausing, hit the enter key to continue');
pause

figure(6)
plot(date,hp_dev,date,zeros(T,1),'r');
xlabel('date (year)');
ylabel('log deviations from trend');
title('DEVIATIONS FROM FLEXIBLE TREND');

disp('i am pausing, hit the enter key to continue');
pause


figure(7)
plot(date(1:T-1),(log(RGDP(2:T))-log(RGDP(1:T-1))),date(1:T-1),zeros(T-1,1),'r');
xlabel('date(year)');
ylabel('first differences (in logs)');
title('LOG FIRST DIFFERENCES IN GDP');

disp('i am pausing, hit the enter key to continue');
pause