What are the methods statisticians use to avoid fluctuations of data specially dueto seasonal&cyclical changes

Question

want to know the differences and effectiveness of those methods.

Answer 1

Good question. Econometricians use dummy variables to test for variations in data due to seasonal and cyclical changes.

Consider a regression model:

Yi = a + bXi + ei

where Yi is the dependent variable, Xi is the Explanatory variable, ei is the residual term, a is the constant and b is the coefficient of Xi.

Now, we simply add three more dummy variables, D1i, D2i and D3i.

Where D1i = 1 if Season is Spring, D2i = 1 if Season is Summer, D3i = 1 if Season is Autumn. This implies, when all three variables are 0, it'll be Winter.

The new model becomes:

Yi = a + bXi + cD1i + dD2i + fD3i + ei

Now, the model is seasonally adjusted and you can run regression to obtain whatever statitistics required :)