Alternative Measures of Output

Treasury’s discussion today of current outlook mentions GDPPlus, which I had not recalled. Here is GDPPlus in addition to GDP, GDI, and GDO.

Figure 1: Real GDP (bold black), GDI (blue), GDO (red), and GDPPlus (pink). NBER defined peak-to-trough recession date shaded gray. Source: BEA, NBER, Philadelphia Fed, and NBER. 

GDP Plus q/q SAAR growth in Q1 was 2.7%, as compared to the -1.5% for expenditure side calculated GDP.

GDPPlus follows the methodology laid out in Aruoba et al. (J.Econometrics, 2016) [ungated version]. Jim H. discussed the GDPPlus approach in this 2015 post. GDO is discussed by Furman (2016).



57 thoughts on “Alternative Measures of Output

  1. Barkley Rosser


    Oh my, this ultimately derives from old Geweke stuff he did at UW-Madison. Did you overlap with him at all?

    This has some appeal for sure, although it looks to me that there are competing ways how to do it, which sort of undermines any particular estimate.

    1. Menzie Chinn Post author

      Barkley Rosser: Yes, definitely there are multiple ways of extracting signal from noise. Main idea of using expenditure and income side is same as GDO measure.

      Did not overlap with Geweke, but Geweke was my PhD adviser Dick Meese’s PhD adviser.

      1. Barkley Rosser


        Oh my, of course. You are Geweke’s academic “grandson,” How appropriate, :-).

      2. CoRev

        Menzie admits: “Barkley Rosser: Yes, definitely there are multiple ways of extracting signal from noise.” Also different methods in different fields, such as computing anomalies for temperature.

        1. Menzie Chinn Post author

          CoRev: Read…the…paper. For instance, Kalman filter typically used is from the engineering field originally. I have never seen you cite a procedure using the Kalman filter, nor have I ever seen you present your results based upon executing a procedure using the Kalman filter (personally, I am dubious that you are able to understand the approach, given your use of statistical analysis).

          1. CoRev

            Another grade school/liberal debating trick, change the subject then debate that changed subject. My comment referenced computing anomalies for temperature not Kalman filters. Its soften used in signal processing.

            Much as computing anomalies for temperature.

          2. pgl

            July 26, 2022 at 8:07 am
            Another grade school/liberal debating trick, change the subject then debate that changed subject.”

            No lying troll – this is what YOU did. Wait – you have adopted the line Macroduck routinely throws at you. The you’re rubber I’m glue stunt you are pulling here is the surest sign that we have nothing but a worthless troll.

            BTW Macroduck has copyright protection on that line and he has hired a good attorney. Maybe you should consult with one as he will take whatever pathetic estate you might have.

          3. CoRev

            Again, I’m ROFLMAO. When I quoted Menzie, I changed the subject? I did point out some hypocrisy though.

          4. Barkley Rosser


            You do not even know what you are talking about, not unusual. Temperature anomalies are a data set. Kalman filter is particular time-series method that can be used to study data, such as temperature anomalies, or as I did in a paper a long time ago with some coauthors, looking at time series of exchange rates in an effort to see if any of them exhibited so-called “rational bubbles.”

          5. CoRev

            Barkley, I’m laughing so loud. “Temperature anomalies are a data set. Kalman filter is particular time-series method that can be used to study data, such as temperature anomalies,…” Wow, what a grasp of the obvious you possess. What kind of signal could be buried in all that messy temperature data.

        2. Macroduck

          So, here you are, changing the subject, and don’t so in a completely dishonest way. When Menzie tries to make sense f your senseless change of subject, you accused him of changing the subject.

          Do you need attention, little man?

  2. Macroduck

    Poking around Philly Fed website which hosts GDPPlus data reveals the partisan conflict index:

    There is an obvious, persistent increase in partisanship after the Great Recession. The Tea Party was the U.S. version of grievance-based right-wing populism which grew out of rejection of neoliberalism during and after the Great Recession. Trumpism a cult-of-personality exploitation of that greivance-based right-wing populism.


      I don’t agree. The “tea party” was no populism. It was indeed supporting global neoliberalism. Without, the US is essentially dead as a economic force. Considering the weak dollar, it looked good by default. Then the end of 2014 happened………

  3. pgl

    “A sophisticated measure of growth, termed GDPplus, suggests even stronger growth in the first quarter of 2022. GDPplus was created by economists at the Federal Reserve Bank of Philadelphia to tease out measurement errors by attempting to extract the true underlying level of growth using both GDP and GDI as imperfect measures of growth and how measurement errors in each of these series are typically revised over time.”

    They provide a link to the underlying paper, which everyone should read. Of course, I fully expect the usual nitpicking for Fox and Friends chief economist Princeton Steve even though he has not read the Philly FED paper. After all his political bosses insist we are in a RECESSION.

  4. pgl

    Off topic but important if one is a voter in Ohio:

    Vance, the Trump-backed Republican nominee to replace retiring GOP Senator Rob Portman of Ohio, is facing fierce backlash following the surfacing of comments he made that reportedly urge women to stay in “violent” marriages … Vance responded to a Vice inquiry about whether he believed “it would be better for children if their parents stayed in violent marriages than if they divorced” by accusing the outlet of asking him a “bogus question,” saying that he believed “modern society’s war on families has made our domestic violence situation much worse” and that the “trick” he referenced was the notion “that domestic violence would somehow go down if progressives got what they want.”

    Seriously? So kids are better off when daddy beats up mommy and she just accepts it? Your modern Republican Party.

  5. pgl

    Different topic but I think we are all interested in how this invasion of Ukraine and how NATO is sanctioning Putin is impacting natural gas prices in the EU. FRED shows that the EU price of natural gas has shot up to $30 per Million BTU but the Henry Hub price is just over $8 per Million BTU:

    Transportation costs are a big issue but maybe the US suppliers should see this as an opportunity.

    I was working on a presentation of an Italian litigation over the transfer pricing for its local distribution affiliate of Gazprom. The years were 2003 to 2005 and the court decision told us little except Gazprom was selling 300 million Euros of natural gas back then to an Italian energy company. I was curious what was happening to natural gas prices back then. The Henry Hub prices rose rather dramatically and the EU price was doing basically the same thing. In other words markets have always been volatile.

    Now the transfer pricing issue was rather boring beyond the fact that neither the tax authority or the multinational had a real clue but that never stopped their lawyers from arguing BS. Sort of like listening to CoRev and Princeton Steve.

  6. JohnH

    Canary in the coal mine?

    “ Walmart Rings More Alarm Bells for the US Economy …Walmart said in February that its customer base looked a lot like the US population. If that is the case, then its profit warning is a red flag not only for retail and hospitality companies, but for the engine of the US economy.”

    Recession? What recession?

    1. pgl

      Wow – you have joined Bruce Hall and Princeton Steve as the new Three Stooges all praying for a recession. You know there was this dude named JohnH who used to complain that WalMart had too much market power. Now if Walmart’s customers are leaving them for distributors who do not rip them off as much that JohnH would see that as a good thing. But not THIS JohnH – oh no. Gee Johnny boy — did Walmart give you a job as a greeter?

      1. JohnH

        Praying for recession? Or countering wishful thinking?

        Has pgl forgotten how badly economists missed the boat in 2008?

          1. Barkley Rosser


            Actually I called it more accurately than did Roubini, although with much less attention. He and Dean Baker goofed by saying it would start sooner than it did. They claimed it would start at the beginning of 2007 because they accurately saw the collapsing housing bubble, which started to go down in 2006, would lead to declining housing construction, which did indeed start to decline in 2007. I agreed with them the collapse of the housing bubble would bring recession, but what I noticed and they did not was that the dollar was low in 2007, which I said would help keep the economy propped up for somewhat longer, despite declining housing construction. I was right, and Dean has publicly agreed since I was right.

            I made most of those arguments on Maxspeak, now not publicly available, but I also made some of them on this blog, which at the time had some people still arguing that housing was not a bubble, notably Jim Hamilton, not to embarrass him too much by dragging up that memory. BTW, that I called what was going down pretty accurately actually got mentioned in the NY Times at one point, but I am not going to go digging around to provide all the darned references.

            But then, JohnH, although you derided me as a “mainstream economist,” I noted to you that has not how I have generally been viewed, at least by people who know anything.

    2. bafflng

      actually, what the article shows is that walmart made a series of incorrect purchasing decisions a while back, and is now trying to push blame on something other than poor management decisions. walmart is also trimming back on its e-commerce business. why? it jumped the gun and expected that to be a bigger long term part of its business, and invested too much. it was a mistake. is this a canary in the coal mine? or management trying to control the narrative and avoid blame for poor stock performance?
      recession? same store sales are expected to increase by 6%. this is an increase over previous guidance of 4%-5%.
      Johnh, it looks as though you have been duped.

      1. pgl

        “what the article shows is that walmart made a series of incorrect purchasing decisions”

        What? Walmart promoted JohnH from a mere greeter to someone who runs their purchasing division? If they do not fire JohnH today – short sell the stock.

      2. pgl

        You motivated me to get past the NYTimes firewall:

        Let’s see what JohnH’s link really said:

        Walmart isn’t losing customers. In fact, its low-price mantra is attracting them. The company said earlier this year that during periods of inflation all customers — low-, middle- and higher-income families — become more price-conscious. That is encouraging them to shop at Walmart. It now expects second-quarter US same-store sales, excluding fuel, to increase by about 6%, slightly ahead of its previous guidance of a 4%-5% expansion. The trouble is, as consumers are becoming more thrifty, they are changing their shopping habits in ways that are far less helpful for the retailer. With US inflation at a 40-year high, and food-price inflation running at a double-digit percentage, Americans are spending more on the things they need, such as food and consumer goods, rather than on things they simply want, such as clothing and home furnishings. This is weighing on earnings, because general merchandise is more profitable than food, whose margin is as slim as a slice of wafer-thin ham. Meanwhile, more markdowns are needed to shift the pile-up of products that cash-strapped shoppers aren’t buying. The situation hasn’t been helped by the fact that Walmart built up stocks amid the supply-chain snarl-ups of late last year.

        What baffling said. Just the opposite of the picture JohnH tried to portray.

        Yep another example of how JohnH has completely misrepresented his own link. But you know – he does this a LOT.

        1. Baffling

          Your article states that real retail is essentially flat. Since that has occurred over the same period the fed is rais rates, not surprising.

          At any rate, walmart increasing customers is simply a change in preferences. People have not stopped buying, just changing where they buy. Costco stores are still full.

          I fully expect a slowdown from last year. But recessions should feel bad. We are not anywhere near that, yet. Maybe in the future? Just does not feel that way today.

    3. pgl

      Quoting one line from your link and hope people like baffling fail to read the entire link again?

      Look – we all get you lie a lot but this episode was dumb even for you.

    1. CoRev

      Now that’s the ticket. Make the taxpayers responsible for paying for EV charging. BTW, how much will it cost to add inductive charging to EVs? How much electric grid efficiency loss is there due to inductive charging. Who pays for the needed grid expansion?

      1. baffling

        it is a proof of concept. these things have to be done because we have vocal doubters like corev, who are negative even though they know nothing about the topic. first they say it can’t be done, so we get a proof of concept that shows it can be done. then they say it is too expensive. but economy of scale shows it can be cost effective. a few decades ago, people claimed solar cells could not be made. and here they are. then they were too costly. and yet economies of scale drove down the prices. corev, you are simply a barrier one must overcome on the way to progress.

        by the way, how do you charge your smartphone today? are you one of the fools still plugging in? or do you charge wirelessly like everybody else?

        1. pgl

          “how do you charge your smartphone today?”

          CoRev the mad dog has a unique means of charging his phone – carry it with him as he charges his own tail. Rather crude but it works. m

        2. Ivan

          Some look to the future with joy and anticipation others with fear. Some have rational skepticism others have irrational skepticism. Regardless, the future keeps coming as problems emerge, solutions are dreamt up and tested, then implemented. People like CoRev get steamrolled by reality again and again – but don’t seem to learn from that.

          I for one looks forward to the day we give up the irrational idea that before the suns energy can be used; it has to be converted to organic matter, then incubated deep in the crust of earth for 100 million years, be recovered as ugly dark stuff and burnt in a destructive polluting process. Why not just harvest the suns energy when it gets to earth, instead of that old fashioned insanely long and complicated supply chain?

          1. CoRev

            After much gibberish conjecture Ivan asks: ” Why not just harvest the suns energy when it gets to earth, instead of that old fashioned insanely long and complicated supply chain?” It is a good idea if it replaces that ole “burnt in a destructive polluting process” electricity, but it doesn’t. That ole “burnt in a destructive polluting process” electricity, is still NEEDED to fulfill the demand when the sun’s energy is not available or too little to fulfill demand.

            Furthermore, adding sun generated electricity to a grid only adds cost, lowers efficiency and reliability to the grid. Once sun generated electricity is added to a grid, the solutions needed to cover its weaknesses add even more costs to that grid.

            There’s a whole raft of environmental problems associated with sun generated location, dangerous and rare component resources, reclamation, etc.

            So the question is why? Unless it improves the grid, and lowers costs why include sun generated electricity?

          2. Baffling

            Just like the internal combustion engine is a dying technology, so to is the operation of the old electric grid. The future world does not need to continue to operate within the confines of an old energy extraction process. Corev, you are simply against change. If you were to rebuild the world today, it most definitely would not include ICE and fossil fuels. Why continue to delay that change?

          3. CoRev

            Baffled, do you ever stop and think? You asked: “If you were to rebuild the world today, it most definitely would not include ICE and fossil fuels. Why continue to delay that change?”

            If I were to rebuild the world today, it most definitely would not include SUBSIDIZED renewables, a “War on Fossil Fuels” a misplaced belief in a SINGLE Molecule as the control knob of climate. Why continue to add costs and unreliability to the grid?

            Have you ever read a cost benefit for ther immplementation?

      2. pgl

        Economists get that one should subsidize positive externalities such as this. Of course in your advanced modeling of public policy you cheer when governments subsidize negative externalities such as fossil fuels.

        Oh wait – I’m be so rude to you. Using economic terms you do not understand. My sincerest apologies!

        1. pgl

          To be fair – we pay for the road with gasoline taxes. Of course having an EV car lets one reduce the tax bite. It seems CoRev is so stupid he does not even get this chance of avoiding taxes.

      3. baffling

        “BTW, how much will it cost to add inductive charging to EVs?”
        well that really is not a concern of yours corev, since you will never buy an EV. let each individual owner determine whether they would like that feature. you are for free markets, right?
        “Who pays for the needed grid expansion?”
        just like you can have a transponder that charges you a toll, you can have one that tracks your energy charging. so the users of this feature would pay for the electricity and associated grid expansion. are you deliberately obtuse on the use of modern technology? the world is not stuck in the 1950’s, ghostbuster.

        1. CoRev

          Baffled, now you are internalizes costs to the actual users. Thereafter the free market can determine actual costs instead of part of the costs. Maybe you would consider the same approach for adding renewables to the grid. Y’ano without those subsidies and full cost recovery for their required backup.

          1. CoRev

            Baffled, oh you silly … I’ve pointing the silliness of ideas for decades. Not until Biden’s presidency has the silliness of liberal policies more clear.

            US voters thank you. European residents are paying in even more diverse energy poverty ways. All due to that ole War on Fossil Fuels. Putin thanks you and them.

    2. pgl

      “The equipment (the phone, pan, or vehicle) need not be directly aligned with the charger. There must, however, be a transmitter (charger, stove) and a receiver (phone, pan, vehicle) made of specific metal components or there is no power flow. This is why a person may touch a wireless phone charger or an induction stovetop and not be burned or shocked.”

      This technology is amazing. And this write-up was quite intuitive and easy to follow. Of course, Village Idiots like CoRev still cannot comprehend the story even with such a clearly written description.

    3. Ivan

      Inductive charging is the future of EV charging. There are already stationary systems for public parking spots and private homes. This is a great solution for those who live in apartments and don’t have a private garage.

      Also will be the perfect solution for self-driving cars used in public services such as Uber and Lyft. Those two companies are likely to be early adopter for both technologies since it would help them get rid of “employees”.

      Putting it in the roads as a practical solution for charging, is probably not going to be the future. More likely we will first see 5 min for 500miles corded charging systems.

      1. pgl

        The people who commented on this dumb CNN discussion were even dumber. One comment for example was

        We are already in a recession according to Yellen, Biden’s own economic adviser.

        That is the opposite of what Dr. Yellen said. But hey – it works for MAGA hat wearing morons!

      2. Bruce Hall

        Well, CNN is the authority for all things economic and political, right? No, I thought you’d find it interesting that even the left media questions seemingly odd efforts to avoid the R-word. Besides, I noted previously that economic activity in the US is not monolithic, but varies considerably by state and I recall you discussing revisions to economic data going out several quarters, so nothing seems to be set in stone.

        Personally, I don’t see a slight flagging in economic activity as necessarily a bad phenomenon given supply constraints and the boatload of money the government distributed the last two years. Inflation still remains the main issue (despite gasoline prices falling recently). Food costs have moved higher and for those who have to eat that might be a problem if their incomes were stretched before the rise. I just bought a set of tires that ran about $900 last year and now are $1200 (even EVs need tires). Property prices may be coming down (a good thing unless you are selling).

        Perhaps the administration can claim to be fighting inflation by clamping down on economic activity. I mean, why not? Some people are bound to see that as Joe Biden’s strong leadership.

        1. pgl

          “CNN is the authority for all things economic and political, right?”

          Ted Turner’s outdated boring cable news outfit? Seriously? Well if one has a single digit IQ like you do – then I can see why you would rely on these babbling fools. The rest of your comment was World Class Babbling.

    1. pgl

      CNN? Well at least it was not Fox and Friends with its chief economist Princeton Steve. Now MSNBC’s Morning Joe has “economist” Steve Rattner and his daily graphs. Yes leave to Joe and Mikka to claim all you need to become an economist is to draw a couple of graphs.

      Now if your point is that you are not the only dumb person on the planet – well yea there are a lot of really dumb people.

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