Comments on: Recessions Past & Present http://www.ritholtz.com/blog/2009/04/recessions-past-present/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Sat, 21 Nov 2009 12:06:57 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: ronanlyons http://www.ritholtz.com/blog/2009/04/recessions-past-present/comment-page-1/#comment-163981 ronanlyons Wed, 22 Apr 2009 15:51:54 +0000 http://www.ritholtz.com/blog/?p=24116#comment-163981 Kevin makes a good point - median is better than mean when outliers are the way they are. There is also the issue of severity. 2001-2006 was quite a mild "recession" by the metric of employment - see for example the Pelosi "scare graph" (http://short.ie/recess1 or http://short.ie/recess2). Incidentally, the 1870s episode is well worth investigating in more detail (cursory overview here, http://en.wikipedia.org/wiki/Long_Depression). That recession practically lasted 20 years. Hopefully, if we learnt the importance of domestic fiscal response between 1870 and 1930, we have now learnt the importance of the monetary response and the importance of keeping global trade channels open since the 1930s. Kevin makes a good point – median is better than mean when outliers are the way they are.

There is also the issue of severity. 2001-2006 was quite a mild “recession” by the metric of employment – see for example the Pelosi “scare graph” (http://short.ie/recess1 or http://short.ie/recess2).

Incidentally, the 1870s episode is well worth investigating in more detail (cursory overview here, http://en.wikipedia.org/wiki/Long_Depression). That recession practically lasted 20 years. Hopefully, if we learnt the importance of domestic fiscal response between 1870 and 1930, we have now learnt the importance of the monetary response and the importance of keeping global trade channels open since the 1930s.

]]> By: kevinbenglish http://www.ritholtz.com/blog/2009/04/recessions-past-present/comment-page-1/#comment-163769 kevinbenglish Wed, 22 Apr 2009 01:26:12 +0000 http://www.ritholtz.com/blog/?p=24116#comment-163769 I would argue that "average" is the wrong statisitical measurement to apply to this data set -- the average is being significantly skewed by the recessions lasting 1977 and 1308 days. A better statistical measurement to apply to this data set would be median. Some results: median 397 (for entire set of data) Also, post-1933 the average recession was 330 days (not pre-1933 as indicated on the graph). I would argue that “average” is the wrong statisitical measurement to apply to this data set — the average is being significantly skewed by the recessions lasting 1977 and 1308 days. A better statistical measurement to apply to this data set would be median.

Some results:
median 397 (for entire set of data)

Also, post-1933 the average recession was 330 days (not pre-1933 as indicated on the graph).

]]> By: matt http://www.ritholtz.com/blog/2009/04/recessions-past-present/comment-page-1/#comment-163767 matt Wed, 22 Apr 2009 01:14:57 +0000 http://www.ritholtz.com/blog/?p=24116#comment-163767 Any ideas why recessions last longer (on average) since 1933? The ability of fiat currencies to allow imbalances to persist longer? Reluctance of policy makers to make tough choices (seizing/nationalizing insolvent TBTF/TBTS institutions)? The general direction of economics (trickle down, supply side...), post war era? Any ideas why recessions last longer (on average) since 1933? The ability of fiat currencies to allow imbalances to persist longer? Reluctance of policy makers to make tough choices (seizing/nationalizing insolvent TBTF/TBTS institutions)? The general direction of economics (trickle down, supply side…), post war era?

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