Sunday, March 10, 2013

Morrisey lines

After looking again at yesterday's graph, it occurred to me to ask: How much of the revision to Potential GDP is in the past, really, and how much is in the future? Despite Altig and Gavin's graphs, and the 1977 ERP, it looks like most of the revision is in the future.

So I copied the graph from yesterday and changed it by deleting all the data from after the date-of-estimate. For each date in the legend, I deleted all the numbers after that date for that series. I stripped away the future. What's left does show a bit of revision, but not a lot.

Graph #1

William Gavin is right: Estimating the past is a lot easier than estimating the future.

Still, the graph reminds me of high school math class. Mrs. Morrisey would draw a diagram on the chalkboard and then, when her lines didn't intersect like she wanted, she would go back-and-forth with the chalk and make a good thick line to show the intersection she was trying to show. My buddy called them Morrisey lines.

// Google Drive Spreadsheet

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