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The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure w

The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure were we in a recession in 2020.

deleted 4y ago
[deleted]
bumby 4y ago
Not saying this with snark, but are you claiming that "bank account balance" is a good metric for measuring whether a recession exists or not? I'm not saying the definition shouldn't measure what directly impacts people. However, a recession is a metric of a broad economy; this breaks down when applying at the individual level. As the cliché goes, "A recession is when my neighbor loses his job. A depression is when I lose mine."
- jaywalk 4y ago
  No, I'm not claiming that bank account balance itself is an indicator of anything. But when there are a bunch of other indicators, and I see my bank account balance going down (and I know I'm not alone on that) I'm not particularly interested in hearing why it's actually not a recession.
  - bumby 4y ago
    Honestly, that's likely a cognitive bias about weighting of the indicators in your assessment. Naturally, your personal bank account will be over-weighted (just like in the cliche above). And there'll likely be an availability bias regarding the shrinkage of GDP. For one, it's easy for media to glom onto and two, it's a really easy metric for people to understand. However, what you're probably not doing is factoring in all the other metrics that matter. Unemployment rate, the relative contraction in comparison to previous recessions, GDP in constant dollars, GDP in present dollars, business sales, industrial production, hours of non-farm employment, wage growth, etc. are all factors that the NBER uses to assess whether conditions meet the actual definition of a recession. Point being, the simplified models we use as laypeople (e.g., GDP growth + bank account) create much more uncertainty. Our level of confidence should be inversely related to that uncertainty. It doesn't mean they're wrong, but that our conclusions should be loosely held.

The economy may not have been "in good shape" in 2020 (and I would agree that it was not) but we're talking specifically about a recession here. By no measure were we in a recession in 2020.

deleted 4y ago

[deleted]

bumby 4y ago

Not saying this with snark, but are you claiming that "bank account balance" is a good metric for measuring whether a recession exists or not? I'm not saying the definition shouldn't measure what directly impacts people. However, a recession is a metric of a broad economy; this breaks down when applying at the individual level. As the cliché goes, "A recession is when my neighbor loses his job. A depression is when I lose mine."

jaywalk 4y ago
No, I'm not claiming that bank account balance itself is an indicator of anything. But when there are a bunch of other indicators, and I see my bank account balance going down (and I know I'm not alone on that) I'm not particularly interested in hearing why it's actually not a recession.
- bumby 4y ago
  Honestly, that's likely a cognitive bias about weighting of the indicators in your assessment. Naturally, your personal bank account will be over-weighted (just like in the cliche above). And there'll likely be an availability bias regarding the shrinkage of GDP. For one, it's easy for media to glom onto and two, it's a really easy metric for people to understand. However, what you're probably not doing is factoring in all the other metrics that matter. Unemployment rate, the relative contraction in comparison to previous recessions, GDP in constant dollars, GDP in present dollars, business sales, industrial production, hours of non-farm employment, wage growth, etc. are all factors that the NBER uses to assess whether conditions meet the actual definition of a recession. Point being, the simplified models we use as laypeople (e.g., GDP growth + bank account) create much more uncertainty. Our level of confidence should be inversely related to that uncertainty. It doesn't mean they're wrong, but that our conclusions should be loosely held.