The blog was right on US GDP

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In May 2008, the blog aligned itself with Harvard’s Prof Martin Feldstein, who declared that the Q1 2008 US GDP report was “grossly misleading“. Feldstein, after all, was in a position to know, as he was then chairman of the official body that decides whether the US is in recession.

15 months later, the US Commerce Department has finally admitted that Feldstein was right. It has revealed that “the first 12 months of the US recession saw the economy shrink more than twice as much as previously estimated”.

The blog learnt long ago that if something seems “too good to be true”, then it probably is. It awards itself a pat on the back for not falling into this trap on the US GDP numbers.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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One Response to The blog was right on US GDP

  1. Adal, MEED 5 August, 2009 at 12:26 pm #

    There’s an economists’ fable about this kind of speculation.

    An assistant economics professor, walking with a full professor, reaches down for a $100 bill he sees on the sidewalk.

    He is held back by his senior colleague,
    who points out that if the $100 bill were real, it would have been picked up already.

    Optimization by the participants
    in a market typically eliminates any opportunities for supranormal returns: big bills aren’t often dropped on the sidewalk, and if they are, they are picked up very
    quickly.

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