Privatization Pep Rally

Enrique Diaz-Alvarez enrique at anise.ee.cornell.edu
Thu Jul 30 11:20:28 PDT 1998


Max Sawicky wrote:
>
> Doug helpfully provided these figures:
>
> > GDP yearly
> > 1992$ growth
> >1929 790.9 +6.3%
> >1930 719.7 -9.0%
> >1931 674.0 -6.3%
> >1932 584.3 -13.3%
> >1933 577.3 -1.2%
> >1934 641.1 +11.1%
> >1935 698.4 +8.9%
> >1936 790.0 +13.1%
> >1937 831.5 +5.3%
>
> >And here are the decade figures, which will no doubt scandalize the
> non-bohemian Cde Sawicky:
> >
> >US REAL GDP GROWTH
> >annual average by decade
> >
> >. . .
> >1930-40 2.72%
>
> Here is the URL for the NBER biz cycle dating.
>
> http://www.nber.org/cycles.html
>
> The depression-era cycle begins in August of 1929,
> as Doug said, and ends in May of 1937 (peak to peak).
> The next peak is 1945, which we can probably agree
> stretches "the thirties" too much.
>
> If we simply average Doug's figures above for these
> years we get about 1.65, which is quite a bit less
> than the 2.72 average for the decade.

Hellooo! You can't just average rates of growth, can you? Particularly when they are rather large as is the case here. You've got to multiply them and then take the nth-root. So

1.063x0.91x0.937x0.867x0.988x1.111x1.089x1.131x1.053= 1.1187 over the cycle

1.1187^(1/9) = 1.0125

So, the average yearly growth rate was 1.25%.

Sort of like when a stock goes up 50% then down 50%. You've actually lost 25% of your money.

No?


>
> MBS

-- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 758 8962 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique



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