4 ms·

How so? Are there historical examples?

by jacobmoe 9y ago

seanmcdirmid 9y ago
That’s easy: Japan.
- jacobmoe 9y ago
  The statement was: "Usually a good contra-indicator for economic health". It's a surprising and counter-intuitive claim. Requires more than a single example. It at least requires more examples than you can find to show the opposite of the claim.
  - seanmcdirmid 9y ago
    Japan is the most apt example. Excess is usually an indicator that a crisis is on its way. The housing bubble pre 2008 in the USA, the roaring 20s before the Great Depression. This isn’t a controversial observation that steep rises are typically followed by even steeper falls, which is why the balloon analogy is so apt. But ATM, china’s situation most resembles Japan.
igravious 9y ago
They're talking about the so-called skyscraper index, "a whimsical concept put forward by Andrew Lawrence," but which posits that a spate of skyscraper building precedes an economic downturn but it is a conjecture that hasn't been verified†. “A study by Barr, Mizrach and Mundra (2015) […] They find that there is virtually no relationship between the timing of record-breaking buildings and the business cycle. […] In other words, the study finds that extreme height is driven by rapid economic growth, but that height cannot be used as an indicator of recessions.” † https://en.wikipedia.org/wiki/Skyscraper_Index#Empirical_test_of_the_Skyscraper_Index_hypothesis https://en.wikipedia.org/wiki/Skyscraper_Index#Empirical_tes...
Fricken 9y ago
I live in Edmonton, Alberta. Our skyline went virtually unchanged for 30 years until about 2013, when a sky scraper building frenzy took off, the culmination of a sustained oil boom. Over 40 towers were planned or under construction in 2014 when the price of oil bottomed out. A bunch of those projects were cancelled or put on hold, but enough of them went up. So early 2014, if you stood in the right place you could spot 14 construction towers. Being familiar with the theory, I remember looking at all those cranes and thinking 'Oil is going to tank'. It did.

How so? Are there historical examples?

seanmcdirmid 9y ago

That’s easy: Japan.

jacobmoe 9y ago
The statement was: "Usually a good contra-indicator for economic health". It's a surprising and counter-intuitive claim. Requires more than a single example. It at least requires more examples than you can find to show the opposite of the claim.
- seanmcdirmid 9y ago
  Japan is the most apt example. Excess is usually an indicator that a crisis is on its way. The housing bubble pre 2008 in the USA, the roaring 20s before the Great Depression. This isn’t a controversial observation that steep rises are typically followed by even steeper falls, which is why the balloon analogy is so apt. But ATM, china’s situation most resembles Japan.

igravious 9y ago

They're talking about the so-called skyscraper index, "a whimsical concept put forward by Andrew Lawrence," but which posits that a spate of skyscraper building precedes an economic downturn but it is a conjecture that hasn't been verified†. “A study by Barr, Mizrach and Mundra (2015) […] They find that there is virtually no relationship between the timing of record-breaking buildings and the business cycle. […] In other words, the study finds that extreme height is driven by rapid economic growth, but that height cannot be used as an indicator of recessions.” † https://en.wikipedia.org/wiki/Skyscraper_Index#Empirical_test_of_the_Skyscraper_Index_hypothesis https://en.wikipedia.org/wiki/Skyscraper_Index#Empirical_tes...

Fricken 9y ago

I live in Edmonton, Alberta. Our skyline went virtually unchanged for 30 years until about 2013, when a sky scraper building frenzy took off, the culmination of a sustained oil boom. Over 40 towers were planned or under construction in 2014 when the price of oil bottomed out. A bunch of those projects were cancelled or put on hold, but enough of them went up. So early 2014, if you stood in the right place you could spot 14 construction towers. Being familiar with the theory, I remember looking at all those cranes and thinking 'Oil is going to tank'. It did.