RE: [OPE] Jim Devine's model of the recent economic collapse.

Date: Fri Oct 16 2009 - 08:57:35 EDT

> To arrive at a rule-of-thumb medium term forecast "approximately double the
> unemployment and half the GDP growth rate" for the US, Europe and perhaps
> Japan I just looked at the economic stats, the proportions, how they are
> related, and compared this to what I know from past experience grappling
> with a lot of time series data and the theories I am familiar with. Then I
> looked at what forecasters are extrapolating using past data, and tried to
> sort out the valid insight from the silly dogma. And I conclude that the
> unemployment rate of the labour force is going to be durably higher,
> approximately twice as high, as it was before. As the economy recovers from
> recession, unemployment will decline to about that level, so if on average
> you had about 4% unemployment you're going to have about an 8% unemployment
> level in the future. It's just going to make things tougher for the youth
> and for people who are for one reason or another in a fairly marginal
> position in the labour market.

Hi Jurriaan:
Well, that's quite vague: for instance, others don't know which stats,
over what time period, what time series data in what countries, which
theories, etc. Putting that aside for the moment, are you asserting
a logical connection between the forecast re unemployment and that
concerning GDP such that they have a relatively precise (able to be
quantified ex ante) relation to each other? Obviously, if GDP declines
substantially then the unemployment rate will grow and vice versa,
but what - if anything - can we say beyond that about the proportional
relation between the two statistics?
In solidarity, Jerry
ope mailing list
Received on Fri Oct 16 09:01:52 2009

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