The Two Big Errors

There are two big errors in traditional economic analysis. The first mistake is regarding recession as the main indication of an economic slowdown. Recession is identified by GDP, but by the time the decline has hit GDP and it reflects the slowdown, significant portions of the economy are already damaged.


The second mistake is the practice of tracking economic data from quarter to quarter and month to month. This causes a lot of noise, and there are lots of adjustments that have to be made to the data. Year-to-year tracking is better.

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