Thread View: pnw.general
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Started by Dave Van Horn
Sat, 26 Dec 1992 08:48
Re: The Recession
Author: Dave Van Horn
Date: Sat, 26 Dec 1992 08:48
Date: Sat, 26 Dec 1992 08:48
19 lines
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1382 bytes
>>The Center for Business Cycle (?), the official arbiter of economic >>trends, has declared that the latest US recession ended in March 1991, >>and we have been in a recovery ever since. Rick Wojick responds: >For their next trick, they will show how people can be resurrected from the >dead by defining life in just the right way. That's not really fair. This is really a reflection of the fact that the official definition of "recession" has never been what the public thinks it is. The definition is concerned with the _slope_ of a graph of GNP; a recession begins when the graph falls (negative slope) for two consecutive quarters and ends when the graph resumes climbing again, no matter how much height was lost in the meantime. The public's perception is more closely tied to the _height_ of the graph; times are not perceived to be better until GNP has returned to roughly the level it had before the recession began, the lost ground made up. That necessarily always occurs after the official end of the recession. In a slow recovery, like this one, quite a while after.
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