4 ms·

Recessions are defined by NBER, a consortium of academic economists. Using the 2 quarters rule (something that has no official bearing) means that 2 of the las

by RC_ITR 4y ago

Recessions are defined by NBER, a consortium of academic economists. Using the 2 quarters rule (something that has no official bearing) means that 2 of the last 3 recessions (2000 and 2020) weren't recessions.

permo-w 4y ago
covid did not result in 2 consecutive quarters of negative growth? that seems improbable
- shagie 4y ago
  https://apps.bea.gov/iTable/index_nipa.cfm https://apps.bea.gov/iTable/index_nipa.cfm Begin using the data > Section 1 Domestic Product and Income > Table 1.1.5 Gross Domestic Product > Modify > First year 2016 (refresh table)
- rory 4y ago
  It did: https://fred.stlouisfed.org/graph/?g=UtHh https://fred.stlouisfed.org/graph/?g=UtHh Only two though-- Q2 was so sharp that everything after that was recovery.
  - mywittyname 4y ago
    Which points to why the whole "two consecutive quarters" rule is not, and should not be, definitive. The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition. It wouldn't be unusual for a major economic calamity to occur within a single quarter. Both Covid lock downs and the collapse of AIG/LB happened within a matter of weeks.
    - OJFord 4y ago
      > The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition. But that's not receding, that's has receded. If your implied definition is slipping below the growth trend, then any '50% collapse' is going to ensure 'recession' (by this definition) for probably (or even hopefully) a long time.
      - mywittyname 4y ago
        > But that's not receding, that's has receded. A recession is past tense. One can speculate that we are in a recession, but it's not feasible to collect all the information necessary to make that determination in real time. The best one can do is say, "a recession started six months ago, and I think the situation is better/the same/worse."
        OJFord 4y ago
        Yes but 'has receded' is present perfect. My point was that the situation described was that of a time after a recession that had ended.
  - RC_ITR 4y ago
    The reason the government defines the recession as 4 months is because we did not see two quarters of GDP decline as much as we saw 4 months of it. Shift the quarter to begin in Feb and you'd only have 1Q of decline. That is why the 2 quarters rule is stupid and why 2020 doesn't fit the rule.
    - rory 4y ago
      It clearly does fit the rule because the year doesn't start in February. There's no need to change reality so you were right. It's just a rule of thumb, not some profound maxim of economics.
      - OJFord 4y ago
        The point is that if all the bad happened in half the quarter, that can make quite a difference, and the quarter start/end date is entirely arbitrary. That said, you can apply the same to GP's suggestion of months, if the timescales are even shorter.
        rory 4y ago
        Yeah, the cutoff points for any rule of thumb are going to be fairly arbitrary. I don't understand why people are treating this like a profound observation.
refurb 4y ago
The other alternative is we wait until a year from now for NBER to decide which amazingly would be after the Nov election. How convenient!
autokad 4y ago
Q1 and Q2 of 2020 had negative real GDP, so yes, 2020 was a recession. When they say back to back quarters of negative GDP does not mean a recession, what they really mean is not having back to back quarters of GDP does not mean its not a recession. as in 2001 when GDP shrank in Q1 and Q3 but not Q2. Almost every situation in history of 1 0 1 is considered a recession but 2011, but that one wasn't considered one because Obama was president. however, every time that I know of, back to back shrinking quarters has always been a recession, as far as I know. And it matches up, we all know its a recession now (except those who want to deny its one because of their political view). its a recession, you only look more wrong trying to deny the obvious.

by RC_ITR 4y ago

permo-w 4y ago

covid did not result in 2 consecutive quarters of negative growth? that seems improbable

shagie 4y ago
https://apps.bea.gov/iTable/index_nipa.cfm https://apps.bea.gov/iTable/index_nipa.cfm Begin using the data > Section 1 Domestic Product and Income > Table 1.1.5 Gross Domestic Product > Modify > First year 2016 (refresh table)
rory 4y ago
It did: https://fred.stlouisfed.org/graph/?g=UtHh https://fred.stlouisfed.org/graph/?g=UtHh Only two though-- Q2 was so sharp that everything after that was recovery.
- mywittyname 4y ago
  Which points to why the whole "two consecutive quarters" rule is not, and should not be, definitive. The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition. It wouldn't be unusual for a major economic calamity to occur within a single quarter. Both Covid lock downs and the collapse of AIG/LB happened within a matter of weeks.
  - OJFord 4y ago
    > The country could see a 50% collapse in a single quarter and see 2-3% growth each quarter for years, and not be in a recession by that definition. But that's not receding, that's has receded. If your implied definition is slipping below the growth trend, then any '50% collapse' is going to ensure 'recession' (by this definition) for probably (or even hopefully) a long time.
    - mywittyname 4y ago
      > But that's not receding, that's has receded. A recession is past tense. One can speculate that we are in a recession, but it's not feasible to collect all the information necessary to make that determination in real time. The best one can do is say, "a recession started six months ago, and I think the situation is better/the same/worse."
      - OJFord 4y ago
        Yes but 'has receded' is present perfect. My point was that the situation described was that of a time after a recession that had ended.
- RC_ITR 4y ago
  The reason the government defines the recession as 4 months is because we did not see two quarters of GDP decline as much as we saw 4 months of it. Shift the quarter to begin in Feb and you'd only have 1Q of decline. That is why the 2 quarters rule is stupid and why 2020 doesn't fit the rule.
  - rory 4y ago
    It clearly does fit the rule because the year doesn't start in February. There's no need to change reality so you were right. It's just a rule of thumb, not some profound maxim of economics.
    - OJFord 4y ago
      The point is that if all the bad happened in half the quarter, that can make quite a difference, and the quarter start/end date is entirely arbitrary. That said, you can apply the same to GP's suggestion of months, if the timescales are even shorter.
      - rory 4y ago
        Yeah, the cutoff points for any rule of thumb are going to be fairly arbitrary. I don't understand why people are treating this like a profound observation.

refurb 4y ago

The other alternative is we wait until a year from now for NBER to decide which amazingly would be after the Nov election. How convenient!

autokad 4y ago

Q1 and Q2 of 2020 had negative real GDP, so yes, 2020 was a recession. When they say back to back quarters of negative GDP does not mean a recession, what they really mean is not having back to back quarters of GDP does not mean its not a recession. as in 2001 when GDP shrank in Q1 and Q3 but not Q2. Almost every situation in history of 1 0 1 is considered a recession but 2011, but that one wasn't considered one because Obama was president. however, every time that I know of, back to back shrinking quarters has always been a recession, as far as I know. And it matches up, we all know its a recession now (except those who want to deny its one because of their political view). its a recession, you only look more wrong trying to deny the obvious.