Home » Posts tagged 'GDP' (Page 2)

Tag Archives: GDP

GDP Down? Take It With a Little Seasoning

Posted on by | 11 Comments

The first revision for Gross Domestic Product (GDP) for the first quarter (1Q15) came out negative. The economy is contracting! Is it time to panic?  The White House attributed the slowdown to weak exports, which are quite well known to be a problem.  But is that all?

As we have commented on at length before, the GDP numbers are full of fudge, so it may be hard to know just what to make of them. A cynic would say, and probably does say, that they the Bureau of Economic Analysis (BEA) is making the numbers up as they go to make everyone happy.

Perhaps you are a bit too diabetic to handle all the fudge, either, but this problem is a bit more savory than sweet. It’s all about the seasoning – or, rather, the “seasonal adjustment”.

Continue reading →

What is Software Worth?

Posted on by | 12 Comments

When is the value of something not its true value? When you’re adding up Gross Domestic Product (GDP) of course. That may sound ridiculous, given that the rise and occasional fall of GDP is the yardstick by which we measure how we’re doin’ as an economy. Isn’t it just the sum total of all the goods and services that we produce?

The short answer is “no”, but the long answer is “yes”. It depends a lot on what you mean by “goods” or “service” or “produce”. If that sounds like a huge amount of fudge for something so important, you may want to just enjoy the chocolate induced coma for a bit. Because some goods, like computers and software, have been falling in price but increasing in potential and quality dramatically for a while. Hardware is “hedonically adjusted” to take care of this, but software isn’t. And that difference might be extremely important.

Continue reading →

Smaller Government, Peaceful Government

Posted on by | 27 Comments

“Get government off our backs!” It’s a chant we’ve heard a lot of over the last few years, usually in the deep, gruff voice of those old enough to remember the heyday of our parents and grandparents. It’s a call to a simpler time when there was less government, less taxation, and more to go around. At least, that’s the story we are told.

But an analysis of the size of our Federal Government as a share of the economy shows that while it is a shade bigger than it used to be, it’s way below its maximum. There are peaks in Federal Government size which fit not to an increase in social benefits or productive spending, but the very expensive line item that has been pricey enough to bring down governments and cultures for centuries – war.

In short, it’s time for the progressive left to embrace “smaller government” of a kind and to show that world that peace is not idealistic but practical.

Continue reading →

New Measures for New Times

Posted on by | 4 Comments

When the first estimate for Gross Domestic Product (GDP) in the second quarter of this year (2Q14) came out, there was reason to cheer. A solid gain of 4.0% seemed to really shake off the fear cause by the figure for 1Q14, revised up to -2.1%. There wasn’t a new recession after all, and growth is back to being robust. Right?

It’s OK, we’re among friends. Your skepticism is justified. The main reason for the fall in 1Q14 was a big drop in health care expenditures, partly due to a revised way of calculating them. The problem is the way we gather this magic figure called GDP, a supposed measure of the total size of the economy. Just before the figure for 2Q14 came out a new measure of the economy, Gross Output (GO), was introduced by the Bureau of Economic Analysis (BEA). It illustrates the problems with GDP, especially as we all focus on jobs as the real sign of economic health.

Continue reading →

Revisions

Posted on by | 7 Comments

This was supposed to be the year that the economy turned the corner, building on the foundation laid in 2013. It isn’t happening. The final revision to first quarter Gross Domestic Product (GDP) growth came in at a stunning -2.9%. Is it time to panic?

Nearly everyone agrees that it’s a statistical aberration, so the answer appears to be no. But we’re certainly not enjoying the economic growth that was expected this year. The economy is giving mixed signals at best, leading everyone to wonder if maybe we’re really just treading water after all.

Continue reading →