Friday, April 17, 2015

Looking for something definite

STF left a concise statement a while back at Winterspeak:

I thought that was great. "Saving" is a verb. It is something we can do. "Savings" is a noun. It is something we might have.

"Saving" (singular) is the act of putting money away for later. "Savings" (plural) is the accumulation of money you have put away. "Saving" (singular) is the flow of money into a stockpile of "Savings". This all works. I adopted STF's terminology right away.

And now ... four and one-half years later ... I'm still trying to figure out if FRED adheres to the clear and simple standard that STF laid out in that brief comment.

Here is FRED's Savings [plural] Deposits, Total:

Graph #1
Savings, plural, the noun, something we might have . This graph shows the accumulated stock of savings. Maybe. So then if I were to show Change, Billions of Dollars -- or if I make it annual and show Change from Year Ago, Billions of Dollars -- that would be the flow variable, or "saving" in the singular form. If I'm looking at what I think I'm looking at.

How can I tell if I'm looking at what I think I am?

For this dataset at FRED, the Notes say in part

The savings deposits component of M2 consists of passbook-type savings deposits as well as MMDAs at banks and thrifts.

So. The graph shows a portion of M2 money, and M2 is a stock of money (not a flow of money). If the graph shows a portion of a stock, the portion it shows is a stock also (not a flow); I'm confident of that. So that corresponds to "Savings [plural]". And now I think I'm on the right track if I show the blue line as Change from Year Ago and compare it to some measure of "Saving [singular]".

Ah! I found Gross saving [singular] as a percentage of gross national income. And I found Gross National Income for United States, in Current Dollars. This will work. I can figure Gross saving from it.

If "Gross Saving" is "GS" and "Gross National Income" is "GNI" then FRED's  "Gross Saving as a Percent of Gross National Income" looks like this:

To get the Gross Saving number from what FRED gives me, I only have to multiply by GNI and divide by 100:

Working backward from FRED's number, I get GS, Gross Saving, singular.

I want to compare these GS numbers to the Change from Year Ago, Billions of Dollars version of Graph #1. If they are the same, or similar even, then I will be confident that the series shown in Graph #1 is the stock variable and is correctly plural. I will also be confident that the GS numbers I calculated from the "Gross saving [singular]" series is correctly singular. I will have learned something.

I looked into this a few times before (at least twice on the blog, as I recall) without ever making this much progress. So I'm doing good today. Here's the result:

Graph #2
Not even close.

We have not learned that Graph #1's blue savings (plural) shows a stock and Graph #2's red saving (singular) shows a flow. We have not learned that FRED follows STF's singular/plural rule.

Have we learned anything? Nothing definite. But now I want to think that Graph #1 (since it doesn't show a stock) shows a flow of deposits into savings. But I don't see how that can be, given FRED's Note that we looked at above.

Maybe we learned that the singular/plural rule does not apply to the words "deposit" and "deposits". And maybe we learned that Gross and Total don't mean the same thing.

Oh, well here is something. Dividing by 1000000000 (on Graph #2) converts the red line from "current dollars" to "billions". Now you can't say you've never seen anybody do that!


Auburn Parks said...

any account of savings must also include savings deposits not just at private banks (M2) but also savings deposits at our national govt bank (the Fed). After all there is not much difference between a 6-month Cd at Chase and a 6-month T-bill.

The Arthurian said...


jim said...

Hi Art

I think your graph#2 should be showing the change in total debt also:

It seems to me that the mostinteresting story is there in the difference between the gross saving line and the gross deficit/surplus line