Tuesday, February 16, 2016

Third time's the charm

This morning I clicked the link for this graph from mine of the 12th

Graph #1: RGDP Relative to Base Money, 1947-2015
to see the FRED source page. I clicked MAX to make the graph show all the data, and I notice a change at the right end, the recent end. Maybe an update? Okay.

I zoomed in on the graph to see it:

Graph #2: A Detail from the Recent End of Graph #1
Hovering over that thing at FRED, it turns out there is a slight uptick at the end. Too slight to see, obviously. The value goes from 4.08915 at the next-to-last data point (2015 Q3) to 4.13085 at the last data point (2015 Q4). Like I said: slight.

But uptick is a big deal. On Graph #1 there, it's all one big uptick from 1947 to 1966, and that was a golden age. So I'm interested in what might be happening now.

I made a new graph showing RGDP and Base Money separately, the growth rate for each, quarterly, and zoomed in even more to get a good look:

Graph #3: Recent Growth Rates for RGDP (blue) and Base Money (red)
Why are the default colors so dull? No wonder they call economics the dismal science.

So, the uptick at the right end of Graph #2, we got that uptick not because RGDP growth went up, but because Base Money growth went down.

The red line is below zero there at the end. Base money shrank.

(Is that even a word?)

I'm staring at that graph in disbelief. I see the red line running downhill, driven downhill by policy. It reminds me of something:

Graph #4: Growth Rate of the Monetary Base
Maybe soon we'll add a third circle of Hell to this one.


The Arthurian said...

Maybe that would help the economy recover: brighter colors on FRED graphs.

Jazzbumpa said...

Yes, shrank is the simple past tense of shrink.

If I believed in hell, i'd wonder which circle is accommodating Nino.


The Arthurian said...

Thanks Jazz.

Who is Nino?

Did you see the new bright orange threat/warning at FRED?

nanute said...

Nino is Scalia.

The Arthurian said...

"Nino is Scalia."

(NOW it's funny.)