Re: Edward Prescott, Idiot
royls_at_telus.net
Date: 10/29/04
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Date: Fri, 29 Oct 2004 21:58:50 GMT
On 28 Oct 2004 10:58:22 GMT, aft627@aol.com (Andy F) wrote:
>Igor wrote:
>
>>Oh no I have to hang my head in shame now. The statement is correct.
>>REAL GPD Growth per capita is mean reverting. It averages 1% - 2% a
>>year. REAL GDP GROWTH IS MEAN REVERTING. Most time series methods used
>>shows a linear trend. I say most because some older methods can not
>>reject the unit root hypothesis. It is well known that GDP for the US is
>>trend stationary with a break. THE CONFUSION IS THAT TIME SERIES
>>ANALYSIS ALWAYS ANALYZES GDP IN LOGS. THAT MEANS THE TREND IS LINEAR.
>>The statement is correct.
>>
>>Again you are being deceptive and dishonest because you know this is the
>>case. Any economist reading that statement knows it too.
>>
>So when you said
>
>"There is a limit interest compounds exponentially while GDP grows in a linear
>fashion."
>
>what you really meant was
>
>"interest compounds exponentially while GDP grows in a linear fashion on a
>logarithmic scale"
>
>If you put the compounding interest on a log scale, wouldn't that also be
>linear?
Don't look at the man behind the curtain!
-- Roy L
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