Privatization Pep Rally

[Enrique Diaz-Alvarez]

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	
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