Heritage Foundation EJ Antoni channels ShadowStats:
“Government economic figures hide the truth about the economy…” Thang [sic] you,
@mises , for highlighting a recent paper @profstonge and I wrote that explains how inflation has been greatly underestimated – read the article by @RonPaul here:
https://t.co/cVroe5QwCT
I have written a paper on the Antoni-St. Onge thesis that using the “right” deflators means GDP in 2024Q2 is below 2019Q2 levels, but here I want to highlight one fact – what their alternative GDP deflator entails.
Source: Antoni and St. Onge (2024).
Notice the big orange area in the above graph, which Antoni and St. Onge attribute to their improved treatment of housing costs. I try to follow their argument, using the product of house prices (Case Shiller national house price index) and 30 year mortgage rates in place of the BEA’s component. I adjust real consumption accordingly (the authors do not mention adjustment to investment or government spending), and recalculate GDP (as shown in the paper). Updating the calculations with the most recent house price and NIPA data, I obtain the following picture of the implied deflators.
Figure 1: GDP deflator from BEA (orange), implied deflator replacing BEA housing costs with product of house prices and mortgage rate, at 15% weight in consumption (light blue), and at 30% weight (purple), and Antoni-St.Onge implied GDP deflator (red square), all relative to 2019Q1. NBER defined peak-to-trough recession dates shaded gray. Source: BEA, NBER, author’s calculations.
In other words, I cannot figure out how Antoni and St. Onge calculated their alternative GDP, nor their alternative deflator.
Off topic – Chinese economic policy:
https://www.foreignaffairs.com/china/why-china-wont-give-failing-economic-model?utm_medium=social
The author makes two broad points. First is that China’ stimulus effort relies mostly on asset prices – the wealth channel – rather than direct stimulus to spending. She compares this to U.S. quantitative easing policy, and is not a fan.
Her description of China’s recent policy efforts is the clearest I’ve read, worth the effort for that alone.
Liu’s second point is the reason that China is sticking to using financial levers rather than demand stimulus, and it’s not a big surprise. She argues that Xi is unwilling to hand resources to households, because household choices might not support his policy agenda; Liu sees something like autarchy as Xi’s ultimate goal.
For what it’s worth, Zongyuan Zoe Liu is a CFR fellow, formerly at “Foreign Affairs”, sheepskin from SAIS.
Amazing how the truth is only hidden and faked during democratic Presidencies – whereas under GOP presidents it’s all good.
” I cannot figure out how Antoni and St. Onge calculated their alternative GDP, nor their alternative deflator”
But Professor, it’s quite simple. They decide what number they want it to be – then apply a Fudge factor to “make it so”. Deliciously simple. Don’t complicate science with facts. Just make it up and cash your paycheck.
Ivan is onto something.
The deep state manipulates figures when Democrats are President but doesn’t when republicans are in. The enemy within are obviously in the commerce department.
cleanse the lot.
clearly their rubbish is merely to maintain the rage of the MAGA types!