Comments on: When will incomes return to their 2006 level? http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/ A slice of lime in the soda Wed, 22 May 2013 18:16:36 +0000 hourly 1 http://wordpress.org/?v=3.4.2 By: tuckerm http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/comment-page-1/#comment-27497 tuckerm Thu, 09 Jun 2011 20:55:33 +0000 http://blogs.reuters.com/felix-salmon/?p=8611#comment-27497 If you go to BEA.gov they have all of the gdp, income and corporate profits numbers. The Brookings paper is explaining why earlier estimates of GDP calculated from income data ended up being a better predictor of actual GDP than the early estimates of GDP based on expenditures. So basically it's better at producing a more accurate delta in the short term, less accurate in overall sizing with more time and data to get expenditure data. And one of the main data points they have is that trend growth of GDP (i) was more accurate in the late 1990s when early GDP (e) numbers were underestimating growth. Still just because this trend was true in the past doesn't mean it will continue to be true in the future, in this case hopefully the GDP (i) numbers have been underestimating growth and overestimated the decline. If you go to BEA.gov they have all of the gdp, income and corporate profits numbers. The Brookings paper is explaining why earlier estimates of GDP calculated from income data ended up being a better predictor of actual GDP than the early estimates of GDP based on expenditures. So basically it’s better at producing a more accurate delta in the short term, less accurate in overall sizing with more time and data to get expenditure data. And one of the main data points they have is that trend growth of GDP (i) was more accurate in the late 1990s when early GDP (e) numbers were underestimating growth. Still just because this trend was true in the past doesn’t mean it will continue to be true in the future, in this case hopefully the GDP (i) numbers have been underestimating growth and overestimated the decline.

]]> By: loudnotes http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/comment-page-1/#comment-27495 loudnotes Thu, 09 Jun 2011 19:03:53 +0000 http://blogs.reuters.com/felix-salmon/?p=8611#comment-27495 If I remember back to econ 101, the income method is supposed to be less accurate than the expenditure method, in large part because it misses a lot of unreported income and non-market activity. So it's not really surprising that the measure would be lower overall. If I remember back to econ 101, the income method is supposed to be less accurate than the expenditure method, in large part because it misses a lot of unreported income and non-market activity. So it’s not really surprising that the measure would be lower overall.

]]> By: jussibjorling http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/comment-page-1/#comment-27489 jussibjorling Thu, 09 Jun 2011 17:41:05 +0000 http://blogs.reuters.com/felix-salmon/?p=8611#comment-27489 I haven't read the Brookings work and am not completely familiar with US GDP data, but I don't think the BEA produces real GDP on an income basis. If this is true, then someone had to produce it, meaning they had to figure out what deflators to use to how to deflate the nominal values of income. That seems like a difficult task for some of the component of income-based GDP. Does anyone know how this was done? I haven’t read the Brookings work and am not completely familiar with US GDP data, but I don’t think the BEA produces real GDP on an income basis. If this is true, then someone had to produce it, meaning they had to figure out what deflators to use to how to deflate the nominal values of income. That seems like a difficult task for some of the component of income-based GDP. Does anyone know how this was done?

]]> By: davew http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/comment-page-1/#comment-27488 davew Thu, 09 Jun 2011 17:34:06 +0000 http://blogs.reuters.com/felix-salmon/?p=8611#comment-27488 Changes in the Gini are not necessary for improved economic conditions. If nobody talked about 'income inequality statistics', would anyone pay attention to income inequality? Changes in the Gini are not necessary for improved economic conditions.

If nobody talked about ‘income inequality statistics’, would anyone pay attention to income inequality?

]]> By: Foppe http://blogs.reuters.com/felix-salmon/2011/06/09/when-will-incomes-return-to-their-2006-level/comment-page-1/#comment-27487 Foppe Thu, 09 Jun 2011 17:16:35 +0000 http://blogs.reuters.com/felix-salmon/?p=8611#comment-27487 What is it with these silly measures economists use? The only three that are even remotely relevant to the question what the country's standard of living is like are median income, modal income, and gini. The rest is just used for obfuscation. And the exact same thing applies to GDP and stock market index values as (proxy) measures of economic health. What is it with these silly measures economists use? The only three that are even remotely relevant to the question what the country’s standard of living is like are median income, modal income, and gini. The rest is just used for obfuscation. And the exact same thing applies to GDP and stock market index values as (proxy) measures of economic health.

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