tag:blogger.com,1999:blog-6245381193993153721.post2445174937146205118..comments2024-03-17T00:23:24.896-07:00Comments on Social Democracy for the 21st Century: A Realist Alternative to the Modern Left: US Real GNP Estimates 1869–1879Lord Keyneshttp://www.blogger.com/profile/06556863604205200159noreply@blogger.comBlogger23125tag:blogger.com,1999:blog-6245381193993153721.post-67019898305135037232011-12-05T09:51:39.600-08:002011-12-05T09:51:39.600-08:00"Using their GNP figures, the contraction of ...<i>"Using their GNP figures, the contraction of the 1890s is much less than previously thought. As said in my earlier post, it flatly contradicts the unemployment data of Romer/Lebergott. A 1-3% contraction from 1892-1894 coinciding with an unemployment rate that ranged from 8 to 18%?"</i><br /><br />There is no necessary contradiction at all, old chap:<br /><br />http://socialdemocracy21stcentury.blogspot.com/2011/12/us-recessions-of-1890s-in-balke-and.htmlLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-76643817949865140962011-12-05T08:55:18.317-08:002011-12-05T08:55:18.317-08:00^I know Lord Keynes, I said in my first post I kno...^I know Lord Keynes, I said in my first post I know you wrote an article on this. But:<br /><br />"<br />Using their GNP figures, the contraction of the 1890s is much less than previously thought. As said in my earlier post, it flatly contradicts the unemployment data of Romer/Lebergott. A 1-3% contraction from 1892-1894 coinciding with an unemployment rate that ranged from 8 to 18%? As your fellow Englishmen would say (I assume you are from there judging by time zones and when you post replies, and your language :)).....Bollocks! "Patchnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-84278666727272018002011-12-05T08:34:43.380-08:002011-12-05T08:34:43.380-08:00Regarding the 1890s, I have already covered that h...Regarding the 1890s, I have already covered that here:<br /><br />http://socialdemocracy21stcentury.blogspot.com/2011/01/us-gnp-estimates-in-recession-of-1890s.htmlLord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-41503551697552128542011-12-05T08:11:12.776-08:002011-12-05T08:11:12.776-08:002/2
which swamps out the golden age of capitalism...2/2<br /><br /><i>which swamps out the golden age of capitalism's growth rates of 6.8% during the 1870s, is just not credible and consistent analysis.</i><br /><br /><i>The growth rate of 6.8 is garbage: it is based on just two estimates by Kuznets in 1869 and 1879.</i><br /><br /><i>In Friedman and Schwartz, Monetary trends in the United States and the United Kingdom: their relation (1982), pp. 99-100, we have confirmation that were now aware of Gallman's (1966) revisions of Kuznets's 1869 figure.</i><br /><br />You are a sophist and a liar. <br /><br />Gallman's conclusion was that Kuznets' estimates for 1869 and for 1979, and the suspected low estimate for 1869 which was suspected of driving a bias upward in growth rates, nevertheless "had insignificant effects on the aggregates."<br /><br />Some of Gallman's notable conclusions are:<br /><br />"Kuznets believes that the 1869 benchmark figure is short because of deficiencies of the Census. For this reason, his 1869 GNP estimate is too low, but probably less than 10 per cent too low. The effect of this, in turn, is to make the decade average GNP estimate for 1869-78 short by something under 5 per cent and to give the rate of change of the series a slight upward bias."<br /><br />OK, so a 6.8% estimate revised downward by 5% is 6.46%.<br /><br />Still higher than post-WW2.<br /><br />"There are several reasons for believing that Kuznets overestimated the effect of deficiencies of the 1869 Census on his series. He gave some weight to Census Commissioner Walker's estimate that returns were short by 13 per cent; but Walker attributed the shortage to poor returns of the hand trades, especially the construction hand trades. Shaw and Kuznets made no use of these data."<br /><br />"Kuznets also took into account Shaw's estimate that the 1869 returns were low by about 5 per cent, chiefly because several minor industries were omitted from the canvass. Study of Shaw's tables shows that the industries covered in 1879 but apparently left out in 1869 accounted for only about 2.7 per cent of final product in 1879. Almost half of the total is due to the mixed textiles industry, unenumerated in 1869, according to Shaw. It is likely that the product of this industry was counted in 1869, but was included with the product of the cotton and woolen industries. Apparently this is what happened in 1879."<br /><br />Source: "Gross National Product in the United States, 1834—1909," Robert Gallman, 1966<br /><br />In other words, Gallman believed that Kuznets himself overestimated the effects of his own deficiencies, which means Gallman, if anything, holds Kuznets' estimates as being too conservative even to Gallman.<br /><br />And your pathetic claim that Kuznets' estimates are so bad as to be rejected, on the basis of Gallman's revisions, makes it clear that you're not interested in honest debate.Davidnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-6057086019804943202011-12-05T07:45:46.634-08:002011-12-05T07:45:46.634-08:00"And Romer shows a moderate recession in 1870..."And Romer shows a moderate recession in 1870 7.387 (-4.62% contraction), and a mild recesison in 1874-1875 (-0.31 and -0.94), and agin in 1878 (-0.26%). "<br /><br />However, even if you use Romer, you still would have to concede then that the 1890s were in fact a prosperous decade when you analyze her GNP calculations. Furthermore, it seems that since Balke and Gordon have revised on her work, and as far as I'm aware Romer has not disputed them (if anyone knows, it would be you), Balke and Gordon have the most up to date/accurate calculations of GNP for the second half of the 1800s. <br /><br />I have read both of the papers a while ago, and looking at my notes, both of them enhanced the work of Kuznet-Kendritch. Romer noticed that the KK series uses Frickey's index as a measure of output, which is a famous output series used prior to actual GNP data collection. The problem is Frickey's Index has a much smaller quantity and scope (mostly raw materials, which are more volatile) compared to indexes used post war. From what I remember, Romer used a regression with a post war basket similar to Frickey's (i.e, less accurate), then used these differences to formulate numbers for GNP estimates.<br /><br />Balke and Gordon built off of this by including direct measures of output (components method) and prices actually paid by consumers instead of wholesale prices. They also included output in construction, transportation, and communications sectors instead of raw commodity output data (what Kuznet uses). Since I'm unaware as to whether their data has been challenged in the same way Romer's was challenged by theirs, it seem that they have the best representation of output data.<br /><br />And like I said before:<br /><br />"<br />Using their GNP figures, the contraction of the 1890s is much less than previously thought. As said in my earlier post, it flatly contradicts the unemployment data of Romer/Lebergott. A 1-3% contraction from 1892-1894 coinciding with an unemployment rate that ranged from 8 to 18%? As your fellow Englishmen would say (I assume you are from there judging by time zones and when you post replies, and your language :)).....Bollocks! "<br /><br />So with the Balke and Gordon output measures, the growth rates in the 1870s and 1890s were quite good. Particularly, this could prove a problem for proponents of the debt deflation hypothesis, especially since large bankruptcies, falling prices, and contracting money supplies (1876-1879) followed after these Panics.Patchnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-4153910928138396702011-12-05T02:03:06.852-08:002011-12-05T02:03:06.852-08:00Isaac,
Thanks for that.Isaac,<br /><br />Thanks for that.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-10859900012061843842011-12-05T01:16:30.117-08:002011-12-05T01:16:30.117-08:00page 37- a little of 38
According to these annual...page 37- a little of 38<br /><br />According to these annual estimates, net national product in current prices rose at the rate of 3.0 per cent per year from 1869 to 1879[35], and net national product in constant prices rose at the rate of 6.8 per cent per year, implying a decline in prices at the rate of 3.8 percent per year (Table 2, lines 2-4). Since population grew over the decade at the rate of 2.3 per cent per year, the implied rate of growth of real per capita income is no less than 4.5 per cent (Table 2, lines 6-7). The qualitative conclusion is the one we reached before, but the quantitative result is far more extreme. The result is rendered even more surprising by the cyclical characteristics of the initial and terminal years. According to National Bureau monthly reference dates, June 1869 was a cyclical peak and March 1879 a cyclical trough, though the subsequent upturn was so rapid that 1878 is listed as the trough year in the annual reference dates. Moreover, the contraction terminating in 1879 was the longest experienced by the United States from at<br />least the Civil War to the present. In consequence, a comparison between<br />1869 and 1879 might be expected to understate the secular rate of growth. These are among the considerations that have led Kuznets and others to question the accuracy of his estimates for the early decades.[36]<br /><br />Footnotes<br /><br />[35]Because of the important role played by the decennial censuses in the construction<br />of the estimates, the estimates for census years like 1869 and 1879 are presumably considerably more reliable and involve less interpolation than other individual years.<br /><br />[36]One other study covering this period also shows very rapid growth in output. According to Gallman's estimates of commodity output, the decennial percentage rate of change in output per capita from 1869 to 1879 was higher than in the two pre-Civil War decades, and was exceeded only from 1879 to 1889 during<br />the nineteenth century and from 1919 to 1929 and 1939 to 1949 during the twentieth century (Robert E. Gallman, "Commodity Output, 1839-1899," Trends in the American Economy in the Nineteenth Century, Studies in Income and<br />Wealth, Vol. 24, Princeton for NBER, 1960, pp. 16, 19).<br /><br />On the other hand, the evidence in A. F. Burns~ Production Trends in the United States Since 1870 (New York, NBER, 1934) suggests that the decade of the seventies was one of average rather than of unusually rapid growth. The medians of the trend cycles of all four of the comprehensive groups of production series he examined are, close to the exponential curves fi tted to their decade percentage rates of growth, three being slightly above and one slightly below (p. 181).Isaac"Izzy"Marmolejohttp://thepunished.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-54337696572515594132011-12-05T01:15:47.154-08:002011-12-05T01:15:47.154-08:00LK,
this is page 36
Beginning with 1869, annua...LK, <br /><br /> this is page 36<br /><br />Beginning with 1869, annual estimates are available of net national product, in both current and constant prices, constructed by Simon Kuznets (worksheets underlying his Capital in the American Economy).[30] These estimates, plotted in Chart 3, are admittedly highly tenuous for this early period, which is why we have not wished to rely on them<br />alone. Indeed, Kuznets himself has been most reluctant to use them except in the form of averages for groups of years, and even then<br />only for the study of secular trends.[31] He notes that a major reason for questioning the accuracy of the figures for the early decades is the extraordinarily large increase in estimated real income from 1869-78 to 1879-88. "The rise in gross and in net national product is close to 40 per cent of the mid-decade base. No comparable rises occur in any other decade in the period." [32] Kuznets points out that "this large rise is directly traceable to that shown for the 1869-79 decade" by the series on commodity output constructed by Shaw and incorporated<br />in Kuznets' estimates.[33] He cites the opinions of Shaw and Francis A. Walker that the 1869 Census of Manufactures was understated relative to the 1879 Census, quoting estimates of the extent of understatement ranging from 5 per cent to 13 per cent; but he concludes, "We did not<br />make the adjustment [for understatement]here, because we had no firm basis for 10 per cent in 1869 and 0 per cent in 1879, and because<br />the effect on the decade, averages was relatively minor." [34]<br /><br />Footnotes:<br /><br />[30] Most of the rest of this section is based on Friedman, "Monetary Data and<br />National Income Estimates," pp. 273-282.<br /><br />[31] "For the early years of the period, 1869-1888, the derived annual series, even for the comprehensive aggregates-gross and net national product-did not seem sufficiently reliable as annual measures to warrant their presentation. For the next twenty years, 1889-1908, acceptable annual estimates could be derived only for the broader aggregates-national product, capital formation, and flow of goods to consumers.<br /><br />"For the specific uses of our study of secular trends in capital formation and financing these annual estimates are of interest only as raw material in the calculation of five-year or more complicated moving averages which serve to cancel the short-term fluctuations while revealing the underlying secular movements and any longer swings in them with sufficient accuracy"(Simon Kuznets, Capital in the American Economy: Its Formation and Financing, Princeton for NBER, 1961, pp. 534 and 535).<br /><br />See also two other works by Kuznets: National Product Since 1869, New York, NBER, 1946, especially pp. 59-90; and "Long-Term Changes in the National Income of the United States of America Since 1870," Income and Wealth of the United States: Trends and Structure, Income and Wealth, Series II, Cambridge,<br />Eng., Bowes and Bowes, 1952, especially pp. 34-38.<br /><br />[32]Kuznets, "Long-Term Changes," p. 37.<br /><br />[33]Quotation from "Long-Term Changes," p.37; see also, William H. Shaw,Value of Commodity Output Since 1869, New York, NBER, 1947.<br /><br />[34]Kuznets, "Long-Term Changes," p. 38.Isaac"Izzy"Marmolejohttp://thepunished.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-27637948467372819512011-12-04T23:48:12.747-08:002011-12-04T23:48:12.747-08:00"This blog post has shown exactly zero reason...<i>"This blog post has shown exactly zero reason why one should accept Romer's estimates over Kuznets' estimates"</i><br /><br />About 10 minutes of research could have shown you why Kuznets' 1869 estimate is unreliable:<br /><br /><i>"Kuznets estimates that the 1869 census understated output by 5-13 per cent, but it has been suggested that the understatement may have been as high as 18-22 percent."</i><br /><br />Angus Maddison, <i>Economic Growth in the West: Comparative Experience in Europe and North America</i>, p. 203.<br /><br />If Kuznets himself through this estimate was unreliable you already have a very good reason for not accepting it.<br /><br />That underestimate of 1869 exaggerates the growth rates for 1869-1879 period.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-12255258374064692092011-12-04T23:38:41.909-08:002011-12-04T23:38:41.909-08:00"Beginning with 1869, annual estimates are av...<i>"Beginning with 1869, annual estimates are available of net national product, in both current and constant prices, constructed by Simon Kuznets (worksheets underlying his Capital in the American Economy)"</i><br /><br />(1) Kuznets never published his annual estimates for 1870-1878 and 1880-1888, and only provided decade estimates from 1869-1889.<br /><br />Stanley L. Engerman, <i>Cambridge economic history of the United States, Volume 1</i>, p. 866.<br /><br />(2) even if Friedman used the unpublished estimstes of Kuznets, they need revision, as pointed out above.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-67505420960270505062011-12-04T23:25:36.363-08:002011-12-04T23:25:36.363-08:00Even Kendrick's early figures are unrelibale:
...Even Kendrick's early figures are unrelibale:<br /><br /><i>For 1869-1889 Kendrick presented only decade averages, as it seemed probable that they exaggerated growth.</i><br /><br />Angus Maddison , <i>The world economy: historical statistics</i>, p. 78.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-55752280876751684782011-12-04T23:25:29.286-08:002011-12-04T23:25:29.286-08:00which swamps out the golden age of capitalism'...<i>which swamps out the golden age of capitalism's growth rates of 6.8% during the 1870s, is just not credible and consistent analysis.</i><br /><br />The growth rate of 6.8 is garbage: it is based on just two estimates by Kuznets in 1869 and 1879.<br /><br />In Friedman and Schwartz, <i>Monetary trends in the United States and the United Kingdom: their relation</i> (1982), pp. 99-100, we have confirmation that were now aware of Gallman's (1966) revisions of Kuznets's 1869 figure.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-78259817828216604692011-12-04T23:11:42.841-08:002011-12-04T23:11:42.841-08:00"When you realize that 1960-1969 had a far hi...<i>"When you realize that 1960-1969 had a far higher amount of government spending financed by inflation, which raises real GDP calculations."</i><br /><br />You are a fool: real GDP <i>corrects</i> for inflation.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-83822478769192462122011-12-04T23:10:24.769-08:002011-12-04T23:10:24.769-08:00"It was because the US economy was relatively...<i>"It was because the US economy was relatively more free. When economies are more free, capital accumulates more rapidly. "</i><br /><br />(1) the UK had freer trade<br /><br />(2) the US had massive protectionism throughout most of the 19th century: after the Republican party's 1856 their agenda was protectionism and government subsidies: they had a significnat influence on eocnomic policy in the US.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-8853257940641050442011-12-04T23:04:20.092-08:002011-12-04T23:04:20.092-08:00"LK, oh and they did base their info off of S...<i>"LK, oh and they did base their info off of Simon Kuznet's work. It states on page 36:"</i><br /><br />(1) Do you have the precise citation for Kuznets' work?<br /><br />(2) is it Kuznets, S. S. 1961. Capital in the American Economy: Its Formation and Financing, Princeton University Press, Princeton, N.J.?<br /><br />(3) If so, this issue is now about the <i>reliablity</i> of Kuznets 1961. As anyone with a minimal understanding of this subject knows, Kuznets' work is not regarded as reliable. Why? The reason is that Kuznets' data is <i>not annual at all</i>. It is merely an average of 2 estimates: one in 1869 and one in 1879.<br /><br />(4) With both revisions of Kuznets' data and better estimates of annual real GNP, the figures cited by Rothbard and Friedman are hopelessly out of date.Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-7726297634001767412011-12-04T22:57:47.946-08:002011-12-04T22:57:47.946-08:00"Finally, it is important to note that Romer/...<i>"Finally, it is important to note that Romer/Balke and Gordon have much more optimistic growth rates than the Kuznet-Kendritch series in the 1890s "</i><br /><br />And Romer shows a moderate recession in 1870 7.387 (-4.62% contraction), and a mild recesison in 1874-1875 (-0.31 and -0.94), and agin in 1878 (-0.26%).Lord Keyneshttps://www.blogger.com/profile/06556863604205200159noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-81530647481444039252011-12-04T20:13:33.865-08:002011-12-04T20:13:33.865-08:00(Part II)
I am home now, so I can check my statis...(Part II)<br /><br />I am home now, so I can check my statistics. <br /><br />The figures Rothbard cites are from Freidman p.39 Table 3.<br /><br />And the data is the Kuznet series you use above. You made an error with your calculation. The 6.8% is from 1869-1879, yours is from 1870-1879. (127.675-75.609/75.609)=.688/10=6.88%<br /><br />Again, there is no point on commenting on the comparisons between 1945-1973, especially when you cite many of the same reasons for vigorous growth in the 1800s for what I cite post World War II.<br /><br />However, I think an interesting discussion is on Romer/Balke's figures concerning the 1890s. <br /><br />10 year averages for them are:<br /><br />(1890-1900)<br />Balke: 4.4%. Relatively vigorous growth throughout. Roughly 3% drops between 1892-1894 and 1895-1896 (2.3%). <br /><br />Romer: 4.4% as well, with a slight recession (less than 2% drop from 1892-1894). <br /><br />Using their GNP figures, the contraction of the 1890s is much less than previously thought. As said in my earlier post, it flatly contradicts the unemployment data of Romer/Lebergott. A 1-3% contraction from 1892-1894 coinciding with an unemployment rate that ranged from 8 to 18%? As your fellow Englishmen would say (I assume you are from there judging by time zones and when you post replies, and your language :)).....Bollocks!Patchnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-24214686691688812422011-12-04T19:26:31.014-08:002011-12-04T19:26:31.014-08:00This blog post has shown exactly zero reason why o...This blog post has shown exactly zero reason why one should accept Romer's estimates over Kuznets' estimates.<br /><br />The dubious tactic of saying "modern economics", as if it were true that one set of economics theories and/or arguments that are newer than another set of economics theories and/or arguments somehow makes the newer set correct or more correct, is not a proper standard. For if that were true, then LK should consider Keynes' General Theory as inferior to Mises' Human Action, because Human Action is more "modern" than the General Theory.Zachnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-33276016234105121492011-12-04T17:27:44.374-08:002011-12-04T17:27:44.374-08:00(1) the US in the late 19th century was a newly in...<i>(1) the US in the late 19th century was a newly industrialising nation with growth rates higher than normal for mature Western industrialised nations like the UK in that period. In this respect, it was somewhat like China today with its very high growth rates by the standards of Western Europe or the US.</i><br /><br />Fallacy. The age of an economy has nothing to do with its productivity. <br /><br />These high growth rates can be achieved at any "stage" or "phase" or "age" of a market economy. They are not just limited to the "beginnings" of capitalism.<br /><br />The reason why the US economy had higher growth rates than the UK was not because it was "newer" or "less mature" than the UK economy. It was because the US economy was relatively more free. When economies are more free, capital accumulates more rapidly. It's why Hong Kong's economy vastly outpaced Mainland China's growth rate from 1900-1997.<br /><br /><i>(2) The US had massive unused resources waiting to be exploited and mass immigration in the late 19th century, raising its population and capacity to attain economic growth.</i><br /><br />Fallacy. The existence of unused resources waiting to be exploited is not a cause for higher economic growth either. Russia is one of the most "resource rich" nations in the world, and Japan is a country with relatively fewer resources, and yet Japan's economy has outpaced Russia's, because Japan's economy is relatively more free.<br /><br /><i>(3) Taking into account both (1) and (2), it is extraordinary that, by Romer’s estimates of average real GNP growth for 1870–1879, we have figures lower than in the 1960–1969 period.</i><br /><br />Not really. When you realize that 1960-1969 had a far higher amount of government spending financed by inflation, which raises real GDP calculations. This is because nominal GDP is discounted by less than the amount of money that was printed, and is instead discounted by the rise in prices of consumer goods only. So if the government prints and spends a sum of money, and it finds its way in raising the prices of capital goods more so than consumer goods, then real GDP would be calculated as greater even if it is due to nothing but printing money.<br /><br />So the "quality" of a real GDP estimate, would actually be more credible in a less inflationary economy relative to a more inflationary economy.<br /><br /><i>Finally, if we want much better data for comparative purposes, it is far better to look at the average real GDP growth rates estimates across the whole OECD:</i><br /><br /><i>1700–1820 – 0.2%</i><br /><br /><i>1820–1913 – 1.2%</i><br /><br /><i>1919–1940 – 1.9%</i><br /><br /><i>1950–1973 – 4.9%</i><br /><br /><i>1973–1990 – 2.5%</i><br /><br /><i>Of all the periods, the era 1950–1973 – the era of classic Keynesianism – had the highest estimates.</i><br /><br />These time periods are all over the place, and my guess is that he chose 1950-1973 because it just so happened to be in between the Keynesian period of the Great Depression, and the Keynesian period of Stagflation. Picking 23 years for that cherry picked time period, but picking over 120 years for 1700-1820, and 93 years for 1820-1913, which swamps out the golden age of capitalism's growth rates of 6.8% during the 1870s, is just not credible and consistent analysis.<br /><br />The author should instead choose 1 year increments, or 5 year increments, or 10 year increments, or 50 year increments, etc, AND KEEP THEM CONSISTENT.<br /><br />The quality of your blog posts is rapidly deteriorating. This is one of the worst ones yet. I guess it makes sense, considering how desperate you must feel with having to accept higher growth rates during the late 19th century, than existed in the post-WW2 poop age of Keynesianism period.Davidnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-34320845201560662011-12-04T17:09:25.324-08:002011-12-04T17:09:25.324-08:00You're talking out of two sides of your arse, ...You're talking out of two sides of your arse, LK.<br /><br />On the one hand, you say "Romer and Balke estimates are different from Kuznets, and thus Kuznets' data should be rejected and Romer's should be adopted." Why? Because Romer's estimates are LOWER than Kuznets of course! That's why your position here is "Reject Kuznets and adopt Romer."<br /><br />On the other hand, you also say that the data from that period should not be trusted. But this contradicts your prior position that Romer's estimates of the data from that period are superior to Kuznet's estimates. Why? Because you want to cover your ass just in case you further learn that the growth rate during the golden age of capitalism was higher than post-WW2. That way, as of now you can say "Reject Kuznets and adopt Romer" and be right. And if the data from Kuznets is learned to be superior, then you say "All the data from that time cannot be trusted."<br /><br /><i>Even if we accept the estimates of Balke and Gordon as more reliable than those of Romer, US average real GNP growth for 1960–1969 was only slightly lower than the 10 year period from 1870–1879. In reality, of course, why select a 10 year period</i><br /><br />You mean why select a time period that shows the golden age of capitalism had a larger growth in real GDP compared to post-WW2, instead of a time period that when averaged out, results in a lower real GDP during the golden age of capitalism compared to post-WW2? I think your readers know the EXACT reason why you would question why 10 years instead of 14.465 years that just so happens to average out to a lower number compared to some post-WW2 period of 14.465 years. LOLDavidnoreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-62187029459411985462011-12-04T16:26:37.065-08:002011-12-04T16:26:37.065-08:00LK, oh and they did base their info off of Simon K...LK, oh and they did base their info off of Simon Kuznet's work. It states on page 36:<br /><br />"Beginning with 1869, annual estimates are available of net national product, in both current and constant prices, constructed by Simon Kuznets (worksheets underlying his Capital in the American Economy)" <br /><br />The foot note for this sentence states: <br /><br />"Most of the rest of this section is based on Friedman, "Monetary Data and<br />National Income Estimates," pp. 273-282."Isaac"Izzy"Marmolejohttp://thepunished.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-21657574170703622572011-12-04T16:15:01.261-08:002011-12-04T16:15:01.261-08:00LK,
its on page 37...
It states:
"Accor...LK, <br /><br />its on page 37... <br /><br />It states: <br /><br />"According to these annual estimates, net national product in current prices rose at the rate of 3.0 per cent per year from 1869 to 1879,35 and net national product in constant prices rose at the rate of 6.8 per cent per year, implying a decline in prices at the rate of 3.8 percent per year (Table 2, lines 2-4). Since population grew over the decade at the rate of 2.3 per cent per year, the implied rate of growth of real per capita income is no less than 4.5 per cent (Table 2, lines 6-7). The qualitative conclusion is the one we reached before, but the quantitative result is far more extreme. The result is rendered even more surprising by the cyclical characteristics of the initial and terminal<br />years. " <br /><br />Here is the graph<br />http://i42.tinypic.com/2lxw3tk.jpg<br /><br />I have the book so if you need anymore info, let me knowIsaac"Izzy"Marmolejohttp://thepunished.wordpress.com/noreply@blogger.comtag:blogger.com,1999:blog-6245381193993153721.post-83926810009271990272011-12-04T14:54:42.715-08:002011-12-04T14:54:42.715-08:00The figures he draws from are correct. Friedman an...The figures he draws from are correct. Friedman and Schwartz use the Kuznet-Kendrick series, along with a couple of other comparisons. My book is at my dorm, and I’m typing this at my house right now. I do not know the exact statistics Friedman uses from the top of my head, but these are not contrived by Rothbard/the poster. <br /><br /><br />I agree with the trouble on the data, which obviously makes it hard to compare periods from post WWII with before. This is part of the argument you and I just had. It is important to remember though, that Friedman and Schwartz were not necessarily using this as evidence as the strength of laissez faire capitalism, in fact, they were quite puzzled by it! With their figures the money supply declined from 1876 to 1879 by a little under 10%, yet output grew enormously (with a wide range of variability depending on the figures). They repeatedly tried to use other statistics and figures to show the severity of the 1873 contraction, but to no avail. Even with the figures above (and other lesser, but still strong growth rates), they still concluded that the contraction was harsh but the period warrants greater study. Again, I’m at home right now and will get the figures back to you when I can. <br /><br />Finally, remember that many of the same arguments you use (rapidly industrializing, massive resources, etc) were the same arguments I used for the post world war II recoveries in many nations, when many nations started industrializing for the first time, or after a long period after the stagnant 10s-40s (WWI, bad twenties, fascist 30s,WWII), etc. <br /><br />Finally, it is important to note that Romer/Balke and Gordon have much more optimistic growth rates than the Kuznet-Kendritch series in the 1890s (I know you have written an article on this). In fact, if Romer was right, then the Panic of 1893 was a small blip in the radar, and if Balke/Gordon is right, than the Panic was a harsh/mild recession, but nothing close to a Depression. I find their GNP estimates quite interesting, mainly because they fly in the face of the unemployment estimates of Romer and Lebergott. The “contractions” in 1892-1894 were extremely mild compared to Kuznet series, yet the unemployment rate exploded to astronomical levels. I find this quite hard to believe. I am hoping to do a Senior Thesis on this point, especially because of the discrepancy in the data.Patchnoreply@blogger.com