by Summary:
One thing that interests me in the reports is a particular (very wonkish) detail. For the US and most other countries, the quarter’s GDP is routinely reported relative to the preceding quarter, not relative to four quarters ago. Why do the media and markets routinely focus on the 1-quarter growth rate for the US but focus on the 4-quarter growth rate for China? It is not because China’s National Bureau of Statistics fails to make the 1-quarter change available. It’s there in footnote 2 of the NBS press release, as usual. The number for the 3rd quarter relative to the 2nd quarter is 1.6 per cent; to express that in terms comparable to US growth numbers, it is 6.4 % annualized. In other words it is slightly lower this time than the 6.5% number everyone is focusing on. This puzzle is a
Topics:
Mike Norman considers the following as important: Chinese economy, framing
This could be interesting, too:
One thing that interests me in the reports is a particular (very wonkish) detail. For the US and most other countries, the quarter’s GDP is routinely reported relative to the preceding quarter, not relative to four quarters ago. Why do the media and markets routinely focus on the 1-quarter growth rate for the US but focus on the 4-quarter growth rate for China? It is not because China’s National Bureau of Statistics fails to make the 1-quarter change available. It’s there in footnote 2 of the NBS press release, as usual. The number for the 3rd quarter relative to the 2nd quarter is 1.6 per cent; to express that in terms comparable to US growth numbers, it is 6.4 % annualized. In other words it is slightly lower this time than the 6.5% number everyone is focusing on. This puzzle is a
Topics:
Mike Norman considers the following as important: Chinese economy, framing
This could be interesting, too:
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One thing that interests me in the reports is a particular (very wonkish) detail. For the US and most other countries, the quarter’s GDP is routinely reported relative to the preceding quarter, not relative to four quarters ago. Why do the media and markets routinely focus on the 1-quarter growth rate for the US but focus on the 4-quarter growth rate for China?
It is not because China’s National Bureau of Statistics fails to make the 1-quarter change available. It’s there in footnote 2 of the NBS press release, as usual. The number for the 3rd quarter relative to the 2nd quarter is 1.6 per cent; to express that in terms comparable to US growth numbers, it is 6.4 % annualized. In other words it is slightly lower this time than the 6.5% number everyone is focusing on.
This puzzle is a case for behavioral finance. When the statistical agency has a practice of putting the 1-quarter or 4-quarter number at the top of the press release, that is the number to which the wire services, the rest of the media, and even the financial markets pay attention....Framing.
Econbrowser
“China’s Q3 GDP Reportedly Slowed to 6.5%. Or Is It 6.4%?”
Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers