Home » Posts tagged 'negative growth'

Tag Archives: negative growth

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Post Archives by Category

Strong GDP Data and Individuals’ Wellbeing

September 26, 2018

STRONG GDP DATA AND INDIVIDUALS’ WELLBEING

In the New York Times September 14 2018 in an article – We’re Measuring The Economy All Wrong, the writer of the article David Leonhardt complains that despite strong gross domestic product data (GDP) most people don’t feel it. The writer of the article argues that,

The trouble is that a handful of statistics dominate the public conversation about the economy despite the fact that they provide a misleading portrait of people’s lives. Even worse, the statistics have become more misleading over time.

According to the accepted rules of thumb, recessions are about at least two quarters of negative growth in real gross domestic product (GDP). Recessions, according to this way of thinking, are seen as something associated with the so-called strength of the economy. The stronger an economy is the less likely it is to fall into a recession. The major cause of recessions is seen as various shocks, such as a sharp increase in the price of oil or some disruptive political events, or natural disasters or a sudden fall in consumer outlays on goods and services. Obviously then, if an economy is strong enough to cope with these shocks then recessions can be prevented, or at least made less painful. For instance, a well-managed company with a well-managed inventory is likely to withstand the effects of various shocks versus a poorly managed company.

Severity of a recession and the strength of the economy

We suggest that recessions are not about two quarters of negative growth in real GDP, or declines in various economic indicators as such. They are also not about successful inventory management. We would suggest that recessions are not about how resilient an economy is to various external and internal shocks.

…click on the above link to read the rest of the article…

There Will Be No 25-Year Depression

May 7, 2015

There Will Be No 25-Year Depression

Good and Bad News

Today, we have bad news and good news. The good news is that there will be no 25-year recession. Nor will there be a depression that will last the rest of our lifetimes.

The bad news: It will be much worse than that. On Monday, the Dow rose another 43 points. Gold seems to be working its way back to the $1,200 level, where it feels most comfortable.

“A long depression” has been much discussed in the financial press. Several economists are predicting many years of sluggish or negative growth. It is the obvious consequence of several overlapping trends and existing conditions.

 

Brooklyn Daily Eagle Front PageNewspaper from October 24 1929, a.k.a. “Black Thursday” – at this point, the panic had just begun with the market losing 11% in one day. On the next two trading days (Friday and Saturday – at the time, the market was open on Saturdays) the market rebounded slightly, then came “Black Monday” and “Black Tuesday”, which erased all doubt about the seriousness of the situation

Old People Are Dead Wood

First, people are getting older. Especially in Europe and Japan, but also in China, Russia and the US. As we’ve described many times, as people get older, they change. They stop producing and begin consuming.

They are no longer the dynamic innovators and eager early adopters of their youth; they become the old dogs who won’t learn new tricks.

Nor are they the green and growing timber of a healthy economy; instead, they become dead wood. There’s nothing wrong with growing old.

There’s nothing wrong with dying either, at least from a philosophical point of view. But it’s not going to increase auto sales or boost incomes – except for the undertakers.

 

…click on the above link to read the rest of the article…

A Field Guide to Negative Progress

April 23, 2015

A Field Guide to Negative Progress

I’ve commented before in these posts that writing is always partly a social activity. What Mortimer Adler used to call the Great Conversation, the dance of ideas down the corridors of the centuries, shapes every word in a writer’s toolkit; you can hardly write a page in English without drawing on a shade of meaning that Geoffrey Chaucer, say, or William Shakespeare, or Jane Austen first put into the language. That said, there’s also a more immediate sense in which any writer who interacts with his or her readers is part of a social activity, and one of the benefits came my way just after last week’s post.

That post began with a discussion of the increasingly surreal quality of America’s collective life these days, and one of my readers—tip of the archdruidical hat to Anton Mett—had a fine example to offer. He’d listened to an economic report on the media, and the talking heads were going on and on about the US economy’s current condition of, ahem, “negative growth.” Negative growth? Why yes, that’s the opposite of growth, and it’s apparently quite a common bit of jargon in economics just now.

Of course the English language, as used by the authors named earlier among many others, has no shortage of perfectly clear words for the opposite of growth. “Decline” comes to mind; so does “decrease,” and so does “contraction.” Would it have been so very hard for the talking heads in that program, or their many equivalents in our economic life generally, to draw in a deep breath and actually come right out and say “The US economy has contracted,” or “GDP has decreased,” or even “we’re currently in a state of economic decline”? Come on, economists, you can do it!

…click on the above link to read the rest of the article…

 

 

Olduvai IV: Courage
Click on image to read excerpts

Olduvai II: Exodus
Click on image to purchase

Click on image to purchase @ FriesenPress