tag:blogger.com,1999:blog-8702840202604739302.post3622751215533697244..comments2024-03-28T03:38:53.734-07:00Comments on MacroMania: U.S. postwar growth and the pop in epopDavid Andolfattohttp://www.blogger.com/profile/12138572028306561024noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-8702840202604739302.post-37554198300654583232016-11-14T18:33:33.903-08:002016-11-14T18:33:33.903-08:00David,
You probably won't believe this, but t...David,<br /><br />You probably won't believe this, but this cyclical pattern is visible in the log chart of the Dow Jones going back to the late 1890s.<br /><br />If you look at the second chart where you show the break points in the growth rate and endeavour to note the time of the break as accurately as possible you might see the following:<br /><br />High growth 1948 - 1965 -> 17 years<br /><br />Low growth 1966 - 1983 -> 17 years<br /><br />High growth 1984 - 2000 -> 16 years<br /><br />Low growth 2001 - ?<br /><br /><br />If you believe this pattern then the period of low growth is due to end 2017-18. This same 17 year cycle is evident in the DJ and coincident with the growth rate cycle.<br /><br />I will assert that this cycle is related to the cycle of technological development. I will also assert that the Great Moderation had nothing to do (much anyway) with the US Fed getting it right. It was all about the next burst of growth owing to the then latest technological innovations (and it doesn't take much thinking to rattle them off). And the low growth hiatus since 2000 is due the saturation of prior technological innovation. The next burst of growth will come as the next batch of technological innovations begin to take effect (and I'm sure you could rattle of a few of those.) If you believe all this, we will expect to see the next high growth phase to begin in a couple of years.<br /><br />Henry<br /><br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-7296084863377099512016-11-14T11:35:29.067-08:002016-11-14T11:35:29.067-08:00I like the arithmetic, David, the adjustment for a...I like the arithmetic, David, the adjustment for a constant EPOP. I never saw that before. Interesting. Good post.<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-26675202710252839632016-11-12T07:25:22.876-08:002016-11-12T07:25:22.876-08:00It seems like there is a problem of endogeneity in...It seems like there is a problem of endogeneity in this explanation. During periods of strong growth there will be strong demand in the labour market, increasing the employment to population ratio.<br /><br />Since improvements in health have caused not just higher life expectancy but also a greater ability to do work in relatively old age, I think this FRED graph (employment rate aged 15-64) is more relevant than the one provided by Michael Solyom.<br /><br />https://fred.stlouisfed.org/series/LREM64TTUSA156N<br /><br />As you say, growth can't rely on an ever increasing employment to population ratio but in a healthy economy one would at least expect a non-decreasing employment to population ratio for the working age population.Anonymoushttps://www.blogger.com/profile/07730077084140053327noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-10115123708860957252016-11-11T21:11:29.943-08:002016-11-11T21:11:29.943-08:00Sure, but that only strengthens the case against r...Sure, but that only strengthens the case against rapid future growth (can't expect much added boost from epop growth). David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-78755088831442662982016-11-11T19:41:17.156-08:002016-11-11T19:41:17.156-08:00But if you look at epop of 25-54yo it certainly lo...But if you look at epop of 25-54yo it certainly looks like it has recovered, no?<br /><br />https://fred.stlouisfed.org/graph/?g=aJkSAnonymoushttps://www.blogger.com/profile/04454564303567326864noreply@blogger.com