tag:blogger.com,1999:blog-8764541874043694159.post3793188744758589679..comments2024-03-28T12:23:39.665+00:00Comments on Coppola Comment: Lehman's AftershocksFrances Coppolahttp://www.blogger.com/profile/09399390283774592713noreply@blogger.comBlogger19125tag:blogger.com,1999:blog-8764541874043694159.post-13582339207371050302017-10-20T15:07:48.080+01:002017-10-20T15:07:48.080+01:00OK I'll do so on the other post. It was a diff...OK I'll do so on the other post. It was a different post yes but you linked to it at the conclusion of this one, and you and Miguel were referring to that aspect in these comments. DA.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-62819421713524515462017-10-19T18:33:43.760+01:002017-10-19T18:33:43.760+01:00Anonymous, I did in fact explain why I deleted you...Anonymous, I did in fact explain why I deleted your comment. Please see my comment below. Your comment was not relevant to this post. It was a rebuttal of a different post from 6 months ago. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-50773572034732249622017-10-19T13:12:08.871+01:002017-10-19T13:12:08.871+01:00PS I'm not a Trump supporter!PS I'm not a Trump supporter!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-15967326941314485892017-10-19T10:30:27.127+01:002017-10-19T10:30:27.127+01:00It's a shame you deleted my comment here witho...It's a shame you deleted my comment here without saying why it shouldn't appear or rebutting it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-91653975792625359262017-10-19T06:58:54.226+01:002017-10-19T06:58:54.226+01:00Anonymous, your comment has been deleted because i...Anonymous, your comment has been deleted because it is off topic for this post. In fact it seems not to have been intended for this post at all. I invite you to repost your comment on the post for which it was intended. Please be aware that comments are moderated on older posts, so your comment may take a while to appear. Also, please sign your post. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-49415507708372476552017-10-14T19:17:01.299+01:002017-10-14T19:17:01.299+01:00Yes I understand. I feel like you. I'm affraid...Yes I understand. I feel like you. I'm affraid you are right. You have suggest me a comment on the Catalonia problem in this context. http://www.miguelnavascues.com/2017/10/une-drole-de-guerre.htmlwww.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-47923414652891285632017-10-14T08:52:21.270+01:002017-10-14T08:52:21.270+01:00Actually if you extrapolate a straight line onward...Actually if you extrapolate a straight line onwards from the slope 1992 to 2008 for the USA it does in fact seem to intersect with the chart line at 2017.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-46890204385139079532017-10-13T22:24:30.032+01:002017-10-13T22:24:30.032+01:00The previous deflections are not followed by a r...<br />The previous deflections are not followed by a recovery to a level that follows from the previous trend. As your blog post does not use '''Trend Growth"" in the conventional sense, If you are interested in this particular dialog you would have to define what you are yourself referring to as ''Trend growth" .<br /><br />Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2366719813273927662017-10-13T20:34:48.449+01:002017-10-13T20:34:48.449+01:00Dinero, there may be a deflection, but it is minor...Dinero, there may be a deflection, but it is minor compared to that in 2008. I distinguished in the post between minor deflections that over time return to trend and major deflections that don't. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11354453187521157322017-10-13T20:31:28.032+01:002017-10-13T20:31:28.032+01:00>Frances
To see it , place a ruler on the compu...>Frances<br />To see it , place a ruler on the computer screen , it is clear to see that it is not exceptional.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-36594946395287795862017-10-13T20:11:37.707+01:002017-10-13T20:11:37.707+01:00The 2008 deflection is exceptional in all three ca...The 2008 deflection is exceptional in all three cases. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-11640878747888536572017-10-13T20:10:43.257+01:002017-10-13T20:10:43.257+01:00So do I, Miguel. But that is why I keep saying thi...So do I, Miguel. But that is why I keep saying this. I want to be wrong. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-18513813585931179652017-10-13T18:20:04.871+01:002017-10-13T18:20:04.871+01:00Great post, really. However, I hope that the three...Great post, really. However, I hope that the three last words will be never true.www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-66038344164340645992017-10-13T16:39:25.112+01:002017-10-13T16:39:25.112+01:00It is not exceptional for a recession to cause GDP...It is not exceptional for a recession to cause GDP growth to be "nocked off its pre-crisis course" , if you look at the charts in the post, it is the case for the UK chart 2000 and the Euro Area chart 1996.Dinerohttps://www.blogger.com/profile/14632385731642361211noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-61516351411402368302017-10-13T14:14:01.627+01:002017-10-13T14:14:01.627+01:00The reason interest rates have to be lower is also...The reason interest rates have to be lower is also simple, the growth in money created, ie 10% of a billion as less effect than 10% of a trillion! its the power of the sum involved! but it just as important like you say that all money created on both sides demand and supply once they've been cancelled out can still cross to the other side of that equation otherwise you get asset bubbles , ie one form of inflation!paulhttps://www.blogger.com/profile/03431327179470830789noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-2295831776722398612017-10-13T10:32:26.389+01:002017-10-13T10:32:26.389+01:00Francis,
Who wants inflation with moribund wages, ...Francis,<br />Who wants inflation with moribund wages, zero hour contracts etc?<br />Banks use inflation to keep the credit binge going and then speculate on food ,energy etc to profit from boom to bust just keep prices moving!<br />Chrislongshttps://www.blogger.com/profile/08252889875324409569noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-38482418268549167362017-10-13T00:23:21.773+01:002017-10-13T00:23:21.773+01:00I completely agree that the previous path was infl...I completely agree that the previous path was inflated. We should not be fooled by the time series: the economy works in four dimensions, not three. The raised edge of the asteroid hit is in the past as well as the future - i.e. the pre-crisis path is steeper than it should be. In earthquake-speak, this represents the unsustainable buildup of pressure that eventually causes a sudden shift along the fault. I suspect that much of the distorted GDP dynamics around Lehman is to do with oil, not only in the UK but globally. There is some evidence to support this - a very obvious oil price buildup during the pre-crisis years, followed by a sudden spike and crash just before Lehman. I will look at this more closely at some point. <br /><br />However, the point I am making in this post is that whether or not the previous GDP path was real (I think it is self-evident that it was not), Very Important People think it was real and are still desperately trying to restore it. The same applies to productivity. The world can't move forward while politicians and economists are still hankering after past drivers of growth. Frances Coppolahttps://www.blogger.com/profile/09399390283774592713noreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-74056529234245124102017-10-13T00:06:27.677+01:002017-10-13T00:06:27.677+01:00«These charts, for example, show that trend GDP fo...«<i>These charts, for example, show that trend GDP for the US, the UK and the Eurozone has been knocked off its pre-crisis course and is now proceeding from a lower base</i>»<br /><br />I like many of the arguments in path dependency, but I really dislike this argument, because the "real" GDP index in 1996-2008 was unsustainable and unreal, in part because a lot of fictitious, or more properly, redistributive, GDI from the finance sector was counted as GDP (40% of all business profits from finance!).<br />This point is argued very convincingly by a retired Fed economist here:<br /><br />noisefromamerika.org/articolo/why-the-fed-s-zero-interest-rate-policy-failed<br />«The relevant question is this: Is the historical increase in real GDP from the mid-1990s up to the financial crisis due to an abnormal increase in potential output because of a sharp rise and subsequent sharp fall in labor productivity for reasons unknown, or is it due to the confluence of several events, some of which are well known? This is difficult to answer.<br />But whatever the answer, the period of high growth looks like an anomaly.<br />Figure 5 shows real GDP, the CBO’s estimate of potential output, and a trend line estimated from quarterly real GDP over the period 1949Q1 through 1994Q4, just before the sharp rise in output growth. The trend line and CBO’s estimate of potential are nearly identical up to the mid-1990s. Moreover, real GDP before the mid-1990s and after mid-2009 (the end of the recession) fall nicely along the trend-line estimate of “potential.” Hence, relative to the trend line, the behavior of real GDP during the 1995-to-mid-2009 period is an anomaly.»<br /><br />As to shocks, a 1770-2016 10-year "labour productivity" chart in this blog post by C Dillow:<br /><br />http://stumblingandmumbling.typepad.com/.a/6a00d83451cbef69e201bb09cbddc8970d-pi<br />http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2017/10/centrists-become-marxists.html<br /><br />shows increasing "productivity" growth 1810-1870, and a sharp deceleration, to 1890, and increasing "productivity" growth 1910-1970, and a sharp deceleration since then.<br />The two periods of accelerating "productivity" growth may well coincide with the periods in which coal and oil based technologies diffused through productive processes with increased consumption of those fuels.<br />Because in post-JB Clark Economics the concept of fertility of land has been expunged, and thus fertility of land shows up largely as labour "productivity",. as also demonstrated in the previous post in this same blog:<br /><br />http://www.coppolacomment.com/2016/07/the-untold-story-of-uks-productivity.htmlBlissexnoreply@blogger.comtag:blogger.com,1999:blog-8764541874043694159.post-70461580927052621582017-10-12T20:28:32.434+01:002017-10-12T20:28:32.434+01:00This comment has been removed by the author.www.MiguelNavascues.comhttps://www.blogger.com/profile/00880006105532291958noreply@blogger.com