31 sats \ 7 replies \ @supertestnet 30 Aug \ parent \ on: Inflation is down and a recession is unlikely. What went right? econ
The line "you know it when I see it" is a reference to a famous (among lawyers) Supreme Court case about pornography: https://en.wikipedia.org/wiki/I_know_it_when_I_see_it
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The easiest definition is 2 straight quarters of negative GDP growth, i.e. GDP shrinks for 2 straight quarters (annualized).
There is also unemployment and consumer confidence.
The definition doesn't have to be sentient and subjective
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unemployment numbers can be artificially raised by excluding unemployed people who haven't filed for unemployment, and further gamed by making it difficult to file for unemployment
GDP can be gamed through inflation -- e.g. hyperinflationary countries have massive GDP growth when GDP is measured in their domestic currency
I don't know how you would game consumer confidence numbers -- maybe through selection bias, e.g. only poll people at the mall
I remember being called by a voter polling organization once and their first question was what tv show I watched during prime time. I told them none and they said they have no further questions. I think that was an example of selection bias -- perhaps they didn't want to poll people who break the mold of what American consumerism is supposed to look like
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If you don’t watch TV prime time then you probably don’t watch TV news or vote?
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you probably don’t watch TV news
Correct
or vote
Incorrect in my case. I just got information about candidates from sources other than the tv. E.g. I used the "on the issues" website which lists an assortment of political topics with quotations from candidates about those topics. But I think the pollsters didn't want to poll people like me -- they only wanted to poll normies. Which seems like selection bias. The polls almost become a mirror of "do you watch Fox or CNN/NBC/MSNBC?" which rarely offer nuanced analysis. So you end up polling only low information voters and presenting that as "this is a snapshot of the nation's political stance" when it's only a snapshot of what the non-thinkers think.
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Polls have always had selection bias.
Most voters don’t think. Politics is more emotion than reason.
Most voters are single issue: climate change or petroleum or tax policy and regulation or cuts in spending
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Real GDP takes inflation into account vs nominal GDP
My point is that there are quantitative metrics for defining a recession and those same metrics are imperfect because they can be gamed.
Lastly, government can redefine a recession to mean X straight quarters of negative GDP growth where X is normally 2 but can be changed to 3 or 4
Consumer confidence is subjective because it's a survey or poll but still a useful measure for comparison purposes.
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