Comments on: How macroeconomic statistics failed the US http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: DavidMerkel http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31327 Wed, 28 Sep 2011 16:05:03 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31327 The same thing applies to gross domestic purchases, which I have written about a few times. It has been closer to the pulse of how the American economy feels.

http://alephblog.com/2011/03/27/things-a re-not-as-good-as-they-look/

I’ll have another post on this soon.

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By: mfw13 http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31325 Wed, 28 Sep 2011 08:24:08 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31325 One of the problems may be the speed with which the data is supposed to be analyzed and forecasts made. Given that many businesses do not make payments to and/or receive payments from vendors for up to 90 days, it seems to be that it would be pretty difficult to make an accurrate forceast only 30 days after a fiscal quarter ends.

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By: STaylor http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31319 Wed, 28 Sep 2011 02:23:28 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31319 Felix, what skill set do you believe that economists at the BEA should have? Would you add anyone in particular to the BEA Advisory Committee?

http://www.bea.gov/about/advisory.htm

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By: JamieStephens http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31318 Wed, 28 Sep 2011 01:45:01 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31318 Of course the statistical challenges aren’t confined to 2008:Q4. We looked at dozens of quarters of estimates. See

http://blog.morphism.com/2011/08/gdp-unc ertainty.html

for 2008.

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By: Auros http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31309 Tue, 27 Sep 2011 22:01:38 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31309 There was supposed to be a link in that last:
http://krugman.blogs.nytimes.com/2011/09  /27/stimulus-tales/

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By: Auros http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31308 Tue, 27 Sep 2011 22:01:04 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31308 We’re seeing the exact same problem across the spectrum in important gov’t jobs, from public school teachers, to federal regulatory agencies. The GOP has spent the last four decades in a concerted effort to strip away the salaries, benefits, and even the social respect that we used to accord to public servants. Not only are folks now underpaid and overworked (downsizing in the Clinton years did not reduce the amount of work that gov’t workers needed to deal with), they’re regarded by many of their neighbors as parasites.

These are the people who are supposed to teach our children, keep our streets safe, put out fires that threaten our lives and property, haul our garbage away so it doesn’t fester in the streets, keep greedy factory owners from poisoning our food and toys, and on, and on, and on. But Republicans cheer the criminal Rick Scott for laying them off by the thousands.

Still, in telling this story, you should not write out of history the folks who warned us that the stimulus was weak tea.

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By: Some-Guy http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31306 Tue, 27 Sep 2011 21:09:55 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31306 I fall on the misguided side of this particular debate.

GDP is an aggregate of a bunch of measurements with sizeable error bars. Govt, trade balance, consumption, business investment. Of course it’s going to be pretty wrong pretty often.

Imagine that you were predicting the number of home runs hit by the Yankees for a given season based on prior years’ numbers. Your method is to estimate what each individual player would do and then add them all together to get the team total. Most likely, assuming you don’t have some systematic bias in your guesses that skew your results, your individual predictions would be worse than your team wide numbers. You might overestimate Alex Rodriguez by 20 HRs, but underestimate Granderson by 20.

Now imagine if you made these prediction before finding out that the Yankees moved to a new stadium with the fences all 400+ feet from home plate. Regression to the mean and the use of the past to predict the future, which normally make your predictions work well, no longer are doing you any favors. At that point, your estimates are systematically WAY off on everything. GDP numbers for this recession were like if the Yankees moved to a cavernous new ballpark.

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By: FifthDecade http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31303 Tue, 27 Sep 2011 20:33:44 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31303 Unfortunately Mike you’re missing the politics in all this. We’ve seen again this week that the Republicans are quite happy to hold their country to ransom just to get their way, putting the successful passage of a bill to provide disaster relief in jeopardy just to enforce their opinion. Standard & Poors were clearly not wrong to downgrade US debt.

I’m not saying the figures were massaged to hide the economic damage of the Bush Presidency, but if the figures had come out earlier it wouldn’t have improved their poll ratings which were already at record lows. All that is necessary for news not to get out is to underfund the agency responsible for producing it so that it comes out more slowly. Delay delivery long enough and you can then blame the next guy for your mistakes.

We’ve also seen recently that austerity alone does not fix debt ratios; in Greece the economy is shrinking faster than the debt because austerity reduces GDP. Insist on too much austerity and the economy collapses, so even though Greek is spending less and repaying more, the debt ratio is actually climbing. The result is an even more damaged economy, less able to repay debt or provide for its citizens.

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By: MikeKimel http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31301 Tue, 27 Sep 2011 19:40:44 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31301 Not to blogwhore, but given what people, ahem, learn from macro data (http://www.angrybearblog.com/2011/09/ba sic-macroeconomics.html), it almost doesn’t matter. After all, if the policy response is going to be inappropriate regardless of the size of the data error, having data that makes the problem look smaller only means less of a policy failure in response.

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By: djiddish98 http://blogs.reuters.com/felix-salmon/2011/09/27/how-macroeconomic-statistics-failed-the-us/comment-page-1/#comment-31300 Tue, 27 Sep 2011 19:25:54 +0000 http://blogs.reuters.com/felix-salmon/?p=10210#comment-31300 How can my credit card purchase data be used as a macro statistic and how can I benefit from this data?

It seems like I’m generating all this useful data naturally and it just sits in a vault. I’d be plenty happy to give up my privacy for the right price!

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