It's simple: the first X-value is number one, the next is number two, and like that. Here is the result:
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| Graph #1: Variance from the Exponential Trend |
The path varies as much as 40% from the "perfect" trend. But that's not what interests me. Interesting, I think, is that there are three general trends within the variance.
First off, this graph shows actual debt varying from the exponential curve. So, below the zero level means debt is growing more slowly than we might have predicted. Above the zero level means debt is growing faster than we might have predicted. A downtrend means debt growth is slowing, relative to the prediction. And an uptrend means debt growth is increasing, relative to the prediction.
Second, the debt we're evaluating here is Domestic Nonfinancial Corporate (Nonfarm) Business Debt Outstanding.
Now, the trends. Business debt tended to slow until about 1964. Then it changed direction. From 1974 to 1992 (give or take) debt growth was above trend. But after 1988, debt growth tended to slow, relative to its exponential trend.
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The Google Docs spreadsheet
Art -
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Cheers!
JzB
Never mind. It was 2 posts back, and it's there.
ReplyDeleteI cant keep up with you.
JzB
I'm not sure its useful to separate out the business debt. It will typically grow above trend during periods of increasing labour supply and below trend with periods of decreasing or falling labour supply.
ReplyDeleteThe waxing and waning of labour supply is demographics, plus some immigration/emmigration, which is also demographics.
The deviations from trend are driven by people-numbers and age distribution.
The small variances are not material in the big picture, they are distractions.
One would have thought communication technology changes dominate but not so according to the graphs. Unless there has been something going on not shown in the graphs.