July 17, 2003
Dating the Business Cycle

The NBER's Business Cycle Dating Committee has decided that the last business-cycle trough took place in November of 2001. More interesting, they seem to have dropped employment from their list of principal monthly indicators. Their report puts income first, industrial production and sales second, and refers to Macroeconomic Associates's estimates of monthly GDP: Release: For these reasons, the committee refers to a variety of monthly indicators to choose the exact months of peaks and troughs. It places particular emphasis on real personal income excluding transfers and on employment, since both measures reflect activity across the entire economy. The committee places less emphasis on the industrial production and real sales series, which mainly cover the manufacturing and goods-producing sectors of the economy. The committee also looks at estimates of monthly real GDP prepared by Macroeconomic Advisers. There is no fixed rule about what weights are assigned to the various indicators, or about what other measures contribute information to the process... IIRC, it used to be that employment, incomes, sales, and industrial production were more-or-less all given equal weight. It also used to be that those four series tended to have peaks and troughs that were very tightly clustered together. It is...

Posted by DeLong at 09:39 AM

June 20, 2002
My Naivete Shown Up Once Again: Strategic Bequests and the Benefits of Keeping Firm Hold on Your Money as Long as Your Heart Beats

Back when I was in graduate school Doug Bernheim, Andrei Shleifer, and Larry Summers wrote an article about the "manipulative bequest motive" for inheritances--how bequests are neither the result of people holding extra wealth in case they should live longer, nor because of their altruistic desire to better the circumstances of their descendants, but because if you are old the prospect of a bequest is one of the few tools you have to encourage your descendants to pay any attention to you. At the time I thought that this was formal economics gone mad--that this was a sterile theoretical point of no practical importance. But here is yet another piece of evidence that I was hopelessly naive | Andrew Tobias - Money and Other Subjects | SAY IT ISN'T TRUE--Bob Kirkland: "Less Antman was quoted today as advising distributing assets to one's family prior to death. I had two great aunts of substantial means (neither left me anything). One had generously divided most of her assets among her nieces and nephews at least ten years prior to death, so the government wouldn't get it. Fortunately, she did reserve just enough to live modestly and support nursing home care. The other...

Posted by DeLong at 10:19 AM