Monday, April 30, 2007

When is the economy in recession?

Here's an excellent post by James Hamilton demonstrating the difficulties in determining whether the economy is in recession or not (

Even if GDP falls from one quarter to the next, there's a strong chance that the economy is not in recession as usually defined. Hamilton constructs his own "probability of recession" index for the US, based on many macroeconomic indicators, complete with its own emoticon (

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