Ellipsis

I've been trying for a while to find stats that show whether the economy since Reagan was as good, or better, or worse than other periods. Convincing stats.

At last it occurred to me to take advantage of the time periods economists use: the Postwar Golden Age, the Great Inflation, and the Great Moderation. I decided to look at economic performance in these three periods.

Meltzer identifies the Great Inflation as the years 1965-1984.

Annual data from FRED show US economic performance since the late 1940s. For this post I divide the FRED data into three periods: before 1965, 1965-1984, and after 1984.

Growth

Graph #1

Growth was best in the first period, worst in the last.

Unemployment

Graph #2

Unemployment was lowest in the first period, highest in the second, not very good in the last.

Inflation

Graph #3

Inflation was lowest in the first period. Not quite as good in the last.

The first period was best in every category.

The claim to fame of period three is its victory over period-two inflation. Fair enough. However, control of inflation in period three was not as good as during period one. Meanwhile, period three performance in the growth and the unemployment categories just plain stinks.


// Notes

FRED's unemployment data came as annual percentages. The Deflator and Real GDP numbers did not. This allowed me, for the latter two, to calculate compound growth rates by period. For the unemployment graph I simply averaged the given numbers; compounding is not figured in.

To figure the compound annual growth rates I wrote a function in the Visual Basic that comes with Excel. This function is in this Excel file along with the graphs and data.