4 ms·

Yes, using the correct definitions of words is very silly, especially when it is politically inconvenient. Very, very silly.

bumby 4y ago
What is the correct definition?
- kspacewalk2 4y ago
  The correct technical definition in the UK an Canada (and possibly other countries) is two consecutive quarters of negative GDP growth. By that definition, the US is in a recession, case closed. But this definition is not widely used in the US. So its "correctness" is geographically dependent.
  - bumby 4y ago
    >By that definition, the US is in a recession, case closed. That's like saying "Your physical health is defined by your BMI, case closed." NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects. [1] https://www.nber.org/books-and-chapters/business-cycles-inflation-and-forecasting-2nd-edition/what-recession https://www.nber.org/books-and-chapters/business-cycles-infl...
    - mikhailt 4y ago
      The fact the BMI is determined by a "simple" formula doesn't change the merit of the original statement. If an insurance company uses BMI to determine your physical health, then yes, it is case closed. It doesn't matter how unrealistic it is, it doesn't matter what any research has shown. It is based on a strict definition set by the insurance company that defined how it is calculated. If a different company wants to use a different approach, then they're free to do so, no one is forced to use BMI to calculate their health. However, if we want to determine if a country is in recession by comparing to a specific country's definition of recession, which is what the OP just did, then the case is closed (by that definition). > Just like your physical health, economic health should really be measured holistically across different aspects. Unfortunately, the world and people that live in it doesn't work like this. A lot of people like simple calculations even if it is wrong, outdated or not realistic. It's easier for people to say recession is determined by two quarters of two consecutive quarters of negative GDP growth. A few countries use this as mentioned by the OP. It is case closed by this specific _strict definition_ of what a recession is.
      - bumby 4y ago
        >It doesn't matter how unrealistic it is From a rules-lawyering perspective, this is true. But I believe the true intent of determining if a country is in a recession or not is not about semantic gamesmanship, but about how accurately we can represent reality because the fidelity of that representation is what drives policy. That fidelity is what matters in terms of "correctness". If I say the official definition changes to whether or not a groundhog sees his shadow on a particular day, that's probably not the best way to represent economic health as a means of crafting policy even if it's "official" by fiat. Let's not miss the forest for the trees. Policy is what matters because it's what ultimately impacts peoples lives.
    - kspacewalk2 4y ago
      >That's like saying "Your physical health is defined by your BMI, case closed." No, it's like saying "Your BMI is defined by the following formula, case closed". This is treated as a technical term by economists, with an actual definition. But it also has a more ambiguous colloquial use. Personally, I think the media should use a more quaint, wishy-washy term like "slowdown" and leave "recession" to the economists to define as two consecutive quarters of negative GDP growth. >NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects. Or yeah sure, call it "economic health". Even better, throw a "holistic" in there and it will forever remain in the realm of the squishy soft sciences.
      - bumby 4y ago
        >Or yeah sure, call it "economic health". Economic health was my term to point out where people get wrapped around the semantic axle and miss what's actually important. >This is treated as a technical term by economists, with an actual definition. To your point, NBER has their definition of "recession" that uses a myriad of metrics beyond just "GDP-growth-over-two-successive-quarters". From my perspective, that "holistic" measure is likely more accurate. Like it or not, economics is more social science than hard science. If recession isn't indicative of economic health, why do we bother to measure it in the first place? Put differently, if it's not a measure of economic health, why does the definition even matter?
  - deleted 4y ago
    [deleted]

bumby 4y ago

What is the correct definition?

kspacewalk2 4y ago
The correct technical definition in the UK an Canada (and possibly other countries) is two consecutive quarters of negative GDP growth. By that definition, the US is in a recession, case closed. But this definition is not widely used in the US. So its "correctness" is geographically dependent.
- bumby 4y ago
  >By that definition, the US is in a recession, case closed. That's like saying "Your physical health is defined by your BMI, case closed." NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects. [1] https://www.nber.org/books-and-chapters/business-cycles-inflation-and-forecasting-2nd-edition/what-recession https://www.nber.org/books-and-chapters/business-cycles-infl...
  - mikhailt 4y ago
    The fact the BMI is determined by a "simple" formula doesn't change the merit of the original statement. If an insurance company uses BMI to determine your physical health, then yes, it is case closed. It doesn't matter how unrealistic it is, it doesn't matter what any research has shown. It is based on a strict definition set by the insurance company that defined how it is calculated. If a different company wants to use a different approach, then they're free to do so, no one is forced to use BMI to calculate their health. However, if we want to determine if a country is in recession by comparing to a specific country's definition of recession, which is what the OP just did, then the case is closed (by that definition). > Just like your physical health, economic health should really be measured holistically across different aspects. Unfortunately, the world and people that live in it doesn't work like this. A lot of people like simple calculations even if it is wrong, outdated or not realistic. It's easier for people to say recession is determined by two quarters of two consecutive quarters of negative GDP growth. A few countries use this as mentioned by the OP. It is case closed by this specific _strict definition_ of what a recession is.
    - bumby 4y ago
      >It doesn't matter how unrealistic it is From a rules-lawyering perspective, this is true. But I believe the true intent of determining if a country is in a recession or not is not about semantic gamesmanship, but about how accurately we can represent reality because the fidelity of that representation is what drives policy. That fidelity is what matters in terms of "correctness". If I say the official definition changes to whether or not a groundhog sees his shadow on a particular day, that's probably not the best way to represent economic health as a means of crafting policy even if it's "official" by fiat. Let's not miss the forest for the trees. Policy is what matters because it's what ultimately impacts peoples lives.
  - kspacewalk2 4y ago
    >That's like saying "Your physical health is defined by your BMI, case closed." No, it's like saying "Your BMI is defined by the following formula, case closed". This is treated as a technical term by economists, with an actual definition. But it also has a more ambiguous colloquial use. Personally, I think the media should use a more quaint, wishy-washy term like "slowdown" and leave "recession" to the economists to define as two consecutive quarters of negative GDP growth. >NBER has published work going back 40 years that demonstrates why a simplistic measurement of contraction duration is flawed.[1] Just like your physical health, economic health should really be measured holistically across different aspects. Or yeah sure, call it "economic health". Even better, throw a "holistic" in there and it will forever remain in the realm of the squishy soft sciences.
    - bumby 4y ago
      >Or yeah sure, call it "economic health". Economic health was my term to point out where people get wrapped around the semantic axle and miss what's actually important. >This is treated as a technical term by economists, with an actual definition. To your point, NBER has their definition of "recession" that uses a myriad of metrics beyond just "GDP-growth-over-two-successive-quarters". From my perspective, that "holistic" measure is likely more accurate. Like it or not, economics is more social science than hard science. If recession isn't indicative of economic health, why do we bother to measure it in the first place? Put differently, if it's not a measure of economic health, why does the definition even matter?
- deleted 4y ago
  [deleted]