Are official GDP growth statistics wrong?
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  Are official GDP growth statistics wrong?
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Author Topic: Are official GDP growth statistics wrong?  (Read 2942 times)
Beet
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« Reply #25 on: December 02, 2008, 12:12:32 PM »


You don't understand. NBER uses its own methodology, not the two quarters of recession methodology. Quarterly growth is still listed as +1.9% for Q2 2008.
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opebo
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« Reply #26 on: December 02, 2008, 12:55:11 PM »

Because all cars in 10 years will magically be run off of hydrogen-coal bunny fuel!!

I would tend to doubt I, for one, will be driving any different cars in ten years than the ones I drive now (when I'm in the US).  My cars are only currently 24 and 16 years old respectively.
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muon2
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« Reply #27 on: December 03, 2008, 02:45:49 PM »


You don't understand. NBER uses its own methodology, not the two quarters of recession methodology. Quarterly growth is still listed as +1.9% for Q2 2008.

Thank you. I tried to explain that in August earlier in the thread.

The Bureau of Economic Analysis within the Department of Commerce updates the real GDP of previous quarters with each release of new numbers. The most recent release last week showed a significant downward revision of 2007 Q4 from +0.6% to -0.2%. This now shows one quarter of decline in real GDP. A future downward revision for 2008 Q1 from +0.9% could easily set up the two consecutive quarter contraction benchmark for a recession.

In any case contraction in real GDP is not the official measure of a recession. The actual determination is made by the independent National Bureau of Economic Research. They consider a number of factors in addition to real GDP to make a determination that a recession has occurred. Usually they reach that determination on a time scale of about 12 months after the event, so the media focuses on real GDP as a benchmark that can be judged more quickly.


I also note that I had half my prediction right about the start of the recession. Unfortunately I didn't foresee the depth of the second wave meltdown in September, so it looks like it will be hard to keep this recession to within the 6 to 16 month window of post-Depression recessions.
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