Corrections takes each series, normalizes it, HP filters it, multiplies it by -1 if it correlates negatively with the average of all series together (so variables that are high when conditions are bad flip sign), and finally sorts the series vertically based on the value in July 2009. We then graph the series in a heat map: red when the normalized, filtered, and signed variable is "high" and blue when it is "cold."
The result is blind economics (click to enlarge), without theory, seeing if these variables are telling us anything related to one another, suggesting they're measuring something.
No comments:
Post a Comment