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If you average 6.9% and -1.4% (which is close to being a valid procedure, since the numbers are fairly small), you get 2.75%, not 5.5%.
by radford-neal 4y ago
If you average 6.9% and -1.4% (which is close to being a valid procedure, since the numbers are fairly small), you get 2.75%, not 5.5%.
- deleted 4y ago[deleted]
- JumpCrisscross 4y agoFor those who are wondering, the correct calculation is (1 + 6.9% / 4) × (1 - 1.4% / 4), or ~1.37%. Economy started with 100. It grew at 6.9%, or 1.725% in the quarter, to 101.725. It then shrunk 1.4% annualised, or 0.35%, to 101.37. (Edited to account for annualisation.)
- radford-neal 4y agoNo. These are annual rates. The actual change in the fourth quarter was approximately 6.9/4 = 1.725% and the actual change in the first quarter was approximately -1.4/4 = -0.35%, for a total change of approximately 1.725-0.35=1.375% in the two quarters. That's an annual rate of approximately 1.375*2 = 2.75%. (All calculations approximate, but close given that the percentages are all fairly small.)
- JumpCrisscross 4y agoYup, I realised my error after commenting and inadvertently ninja edited from under you.
- throwaway4good 4y agoYou are right - those numbers should be averaged together; 2.75% is still high though.