ABSTRACT
Any economic theory must be tested for its ability to match up with actual economic data. One way to assess the predictions of aggregate economic models requires that we first measure the time series behavior of macroeconomic data over the business cycle, then compare those time series patterns with the time series characteristics predicted by an aggregate economic model. In this chapter, we describe the key time series characteristics of macroeconomic data over the course of the business cycle. We later use those characteristics to assess the predictive ability of aggregate economic models.
