tag:blogger.com,1999:blog-7539577136486286096.post7756790587881642037..comments2024-03-28T02:46:41.090-05:00Comments on Supply and Demand (in that order): Media Trims GDP statsCasey B. Mulliganhttp://www.blogger.com/profile/03317454408275318282noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-7539577136486286096.post-7161085000155737602009-02-01T13:39:00.000-06:002009-02-01T13:39:00.000-06:00Anecdotally, inventory accumulation is usually uni...Anecdotally, inventory accumulation is usually unintentional. When I've played around with datasets in the past, I've found that about half of inventory accumulation is typically given up soon thereafter, though I never looked at as much data as Professor Nunes offers, and what I did could not be called rigorous in any sense. What I also found was that attributing the other half of inventory accumulation to consumption rather than investment seemed to reduce the variance of both series, suggesting to me the same thing as the anecdotes: they represent anticipated consumption that didn't turn up. (This also was done crudely.)<BR/><BR/>Actually, what I was playing with was the line from table 2 of the bea release, i.e. the contribution of the change in inventories to GDP. Since inventories are a stock and their accumulation is a flow, I believe what I was looking at was the second derivative of inventories, divided by GDP and annualized. In any case, that number from table 2 last quarter the worst since Q4 of 2005.<BR/><BR/>I wouldn't be the least bit surprised if about half of the deviation from forecasts that itemized such things was the inventory figure, but I have no data to back that up.<BR/><BR/>Finally, one should obviously be consistent. If we're excluding even half of inventory accumulation from the GDP figure, the negative quarter from 2007Q4 is slightly positive instead of slightly negative. I don't recall the Times drawing this to our attention (though I wasn't paying a whole lot of attention to the Times at the time).dWjhttps://www.blogger.com/profile/12072494989829344049noreply@blogger.com