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Their procedure is subjective, but there is still a standardized measure of convenience, no? Just like there is an "official kilogram". We can say, "That's an

by bumby 4y ago

Their procedure is subjective, but there is still a standardized measure of convenience, no? Just like there is an "official kilogram". We can say, "That's an objective measurement of weight on Earth" but it's not. It's the measurement of the standard kilogram in France. And that "objective" measure can change [1]. It doesn't mean there isn't a consensus on what a kilogram is. Yellen was on Meet the Press last week explaining there is a difference between the "official" measure of a recession and the "two quarters of negative growth" heuristic. That's not to say that politicians can't, or won't, play wordsmith games. [1]https://www.sciencedaily.com/releases/2007/09/070921110735.htm https://www.sciencedaily.com/releases/2007/09/070921110735.h...

jeffbee 4y ago
The kilogram is a quite poor analogy. The GDP is not an objective indicator of recession for the exact reasons you see around you right now. Contraction of economic activity caused by supply bottlenecks doesn’t fit the pattern of recession. The labor situation is still white hot, prices are going up etc.
- bumby 4y ago
  Are you saying there can't be a standardized definition of "recession"? What your alluding to seems to indicate that the definition of "two quarters of negative GDP growth" is incorrect (according to Yellen). It doesn't mean there can't be a more accurate definition. That's where the kg analogy fits. There was one definition that is now considered incorrect by consensus.
  - jeffbee 4y ago
    No, I’m saying there is not one, and defining it strictly as two quarters of gdp decline removes much of the utility of the business cycle dating process.
    - bumby 4y ago
      Yellen seems to disagree, although she said the two quarters definition is too blunt and the "official" definition, the one used by NBER, takes a much more broad picture of the economy. "There's an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong. I would be amazed if the NBER would declare this period to be a recession, even if it happens to have two quarters of negative growth."[1] I think maybe you're conflating "standardized fact" with "objective fact." A kilogram is a standardized fact, even though the objective weight of the object may change. We agree there isn't an objective definition of a recession; I'm saying that despite that, there is a standardized definition. And it isn't "two consecutive quarters of negative growth." [1] https://www.nbcnews.com/meet-the-press/meet-press-july-24-2022-n1297457 https://www.nbcnews.com/meet-the-press/meet-press-july-24-20...

by bumby 4y ago

jeffbee 4y ago

The kilogram is a quite poor analogy. The GDP is not an objective indicator of recession for the exact reasons you see around you right now. Contraction of economic activity caused by supply bottlenecks doesn’t fit the pattern of recession. The labor situation is still white hot, prices are going up etc.

bumby 4y ago
Are you saying there can't be a standardized definition of "recession"? What your alluding to seems to indicate that the definition of "two quarters of negative GDP growth" is incorrect (according to Yellen). It doesn't mean there can't be a more accurate definition. That's where the kg analogy fits. There was one definition that is now considered incorrect by consensus.
- jeffbee 4y ago
  No, I’m saying there is not one, and defining it strictly as two quarters of gdp decline removes much of the utility of the business cycle dating process.
  - bumby 4y ago
    Yellen seems to disagree, although she said the two quarters definition is too blunt and the "official" definition, the one used by NBER, takes a much more broad picture of the economy. "There's an organization called the National Bureau of Economic Research that looks at a broad range of data in deciding whether or not there is a recession. And most of the data that they look at right now continues to be strong. I would be amazed if the NBER would declare this period to be a recession, even if it happens to have two quarters of negative growth."[1] I think maybe you're conflating "standardized fact" with "objective fact." A kilogram is a standardized fact, even though the objective weight of the object may change. We agree there isn't an objective definition of a recession; I'm saying that despite that, there is a standardized definition. And it isn't "two consecutive quarters of negative growth." [1] https://www.nbcnews.com/meet-the-press/meet-press-july-24-2022-n1297457 https://www.nbcnews.com/meet-the-press/meet-press-july-24-20...