by Tyler Cowen
on December 3, 2012 at 9:39 am
So, you have a graph from just before the depth of the recession (2009) and show that the economy hasn’t been tightening FURTHER. So, you’re arguing stimulus worked? Or are you arguing that if you pick 2009 as the starting point, everything looks good. And, by the way, how does this compare to the economies potential?
Hmmm. Wonder why the graph did not go out to the left a little further, like 2001 forward.
In a nonlinear multiple variable economy it’s hard to say what influences what–aka butterfly effect. It’s like trying to predict exchange rates–it’s a zero sum game and there are so many variables it’s nearly impossible to forecast. Was reading what Don McCloskey wrote back in the 1980s on this topic of forecasting: it’s quite good and essentially argues if forecasting was easy, people would be rich doing it. It is not and they aren’t. That said, the math economist Didier Sornette has a (patented) math model that shows a ‘singularity’ (i.e., something bad) is going to happen around 2050, based on chaos theory. Mark your (Mayan) calendar.
as a member of the graph police
whats with the poor quality reproduction ?
I can barely read it
Whats with the different y axis scales (10% vs 3.5%)
Whats with plotting a rate, or yearly change, vs a ratio which includes the rate….
there has got to be a better, clearer, simpler more honest way to express this idea
One of the things that is bad about the internet in general and blogs in particular is that it pulls so many armchair economists into the game of carrying out bivariate ocular regressions. A chart like this is so riddled with issues and problems one doesn’t know where to start.
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