>The naive, yet incorrect, definition some people want to change to (2 quarters) would make it a recession.
That's the standard used for as long as I remember, until it wasn't. It's called "moving the goalposts."
That's the standard used for as long as I remember, until it wasn't. It's called "moving the goalposts."
Not in the US. Your memory doesn't trump facts.
Here's [1] a 1980s report on it.
Here's [2] the Jul 31, 2002 Nevada Daily Mail newspaper, stating the same thing: "The National Bureau of Economic Research, the recognized arbiter of when recession begin and end,....."
Here's [3] a 1983 news paper article explaining it again, same thing.
Here's [4] the NBER on the 1970s recession.
Here's [5] a modern Bloomberg article saying the same thing.
Here's [6] the current NBER page with the definition. Here's [7] the same page from 2020 (saved at internet archive). Same definition then.
Here [8] is the NBER definition from 1999, cached from their website as it was shown in 1999: "he NBER does not define a recession in terms of two consecutive quarters of decline in real GNP. Rather, a recession is a recurring period of decline in total output, income, employment, and trade, usually lasting from six months to a year, and marked by widespread contractions in many sectors of the economy."
Where did you learn your standard, and when did you learn it?
In fact, if you spend much time looking through old newspapers (the google link I gave you allows it) you can find that the NBER has been the arbiter for a long, long time.
Do you still not believe this is how it's been done a long time?
[1] https://www.nber.org/system/files/chapters/c0688/c0688.pdf
[2] https://news.google.com/newspapers?nid=1908&dat=20020731&id=...
[3] https://news.google.com/newspapers?nid=348&dat=19830711&id=H...
[4] https://www.nber.org/system/files/chapters/c9101/c9101.pdf
[5] https://www.bloomberg.com/news/articles/2022-07-12/no-us-rec...
[6] https://www.nber.org/business-cycle-dating-procedure-frequen...
[7] https://web.archive.org/web/20201101011155/https://www.nber....
[8] https://web.archive.org/web/19990221024645/http://nber.org/c...
News. Probably during H.W. Bush.
Here's an article from 2008 talking about the 2 quarter rule of thumb. Apparently it's been around since 1974.
https://money.cnn.com/2008/05/05/news/economy/recession/
Here's one from 1998 using the 2 month definition.
https://money.cnn.com/2001/09/28/economy/economy/index.htm
Here's the NYT defining it the same way in 1974. From the text:
The bureau considers a recession to have occurred when there has been an ettended substantial, and widespread decline in aggregate economic activity—or, duration, depth, and diffusion. The bureau has not specified the breakpoints which distinguish recessions from milder slowdowns. Its experts depend rather on comparisons of current cyclical trends with what happened during previous business cycles, a process that involves some qualitative judgment and interpretation of cyclical trends.
Seems the NBER was pretty wishy washy about it back then too.
The bureau has not specified the breakpoints which distinguish recessions from milder slowdowns.
If it's been around since the 1920s, why isn't it mentioned in 1974? Maybe the NYT dropped the ball.
The NYT goes on to opine:
A rough translation of the bureau's qualitative, definition of a recession into a quantitative one, that almost anyone can use, might run like this:
In terms of duration—declines in real G.N.P. for 2 consecutive quarters; a decline in industrial production over a six‐month period.
There's your 2 quarters boundaries, back in 1974.
https://www.nytimes.com/1974/12/01/archives/the-changing-bus...
It's pretty evident that both have been around a long time and politicians, their news allies and political operatives push whichever one is most convenient. In today's case, the (current?) NBER definition means we aren't currently in a recession (yet), which benefits the current sitting president, briefly.
FYI, I can't seem to find in your first link from 1983 where it actually defines a recession. Perhaps you can quote it. I stopped reading your links after the first one didn't seem to have any references to your claim, but I might have missed it. My eyes started to glaze over a bit, business cycles in 1980 is pretty dry reading.
That article states exactly what I did: "Ignorance about recessions has taken hold because of a simplistic idea that a recession is two successive quarterly declines in gross domestic product (GDP), a measure of the nation's output."
It states the 1974 rule was not two quarters, but over time people forgot to use the rest of the rules. So this completely backs up the "it is not simply 2 quarters" definitions.
>Here's one from 1998 using the 2 month definition.
That's not two month, and it's also not using GDP, which is what people keep wanting it to be. It states "commonly defined as two consecutive quarters of economic contraction" - what is contraction? Decline in many variables, which is what the NBER uses - GDP, and/or GNP, and/or labor markets, and/or sales/purchasing, .....
>Here's the NYT defining it the same way in 1974.
That article also explicitly states that the NBER defines the start and end: "Generally, the designation of recession periods and the beginning and ending dates established by the National Bureau of Economic. Research, a private research agency, are accepted, by both Government and private economists." It then goes on to say how NBER has managed this since the 1920s.
Did you even read those links you posted?
They pretty much back up that the NBER has been the arbiter of recessions in the US.
>politicians, their news allies and political operatives push whichever one is most convenient
Yes politicians do push things that are not true because people ignorant of the correct nuance follow their tribe. But that does not change the truth or underlying fact of the matter.
Seems the NBER was pretty wishy washy about it back then too.
The bureau has not specified the breakpoints which distinguish recessions from milder slowdowns.
If it's been around since the 1920s, why isn't it mentioned in 1974? Maybe the NYT dropped the ball.
The NYT goes on to opine:
A rough translation of the bureau's qualitative, definition of a recession into a quantitative one, that almost anyone can use, might run like this:
In terms of duration—declines in real G.N.P. for 2 consecutive quarters; a decline in industrial production over a six‐month period.
There's your 2 quarters boundaries, back in 1974.
It's pretty obvious that people are trying really hard to not call it a recession for pretty obvious reasons: midterms. To deny the 2 quarter rule of thumb never existed is pretty transparent to most people. Ask yourself this, why would someone want to change the definition on Wikipedia? Why now?
2+2=5
It's not wishy washy. It's nuanced, and takes experts to carefully assess. There is no simple check one of many indicators to some fixed threshold over all of time definition.
I get you don't like the facts, so you use wishy-washy as your description.
>why isn't it mentioned in 1974? Maybe the NYT dropped the ball.
From the 1974 article: "Generally, the designation of recession periods and the beginning and ending dates established by the National Bureau of Economic. Research, a private research agency, are accepted, by both Government and private economists. For more than 50 years, the bureau has studied alternating periods of business expansion and contraction in order to chart their progress, identify cyclical peaks and troughs, and analyze causes of economic fluctuations."
"In the nineteen‐twenties, when the bureau work, was getting under way, periods of decline were usually called depressions. As time went on and declines in economic activity became less severe, the term recession became more common. A more neutral term, contraction, is also sometimes used."
So it's clearly mentioned. Are you even reading the articles?
>In terms of duration—declines in real G.N.P. for 2 consecutive quarters; a decline in industrial production over a six‐month period.
> There's your 2 quarters boundaries, back in 1974.
Yes, if you ignore every other sentence in the article and pull one out of context that suits you, then yes, I can see how you got your beliefs.
>to deny the 2 quarter rule of thumb never existed is pretty transparent to most people.
To deny that the rule of thumb is not sufficient, has never been sufficient, and has always relied on a more nuanced assessment is simply spreading more ignorance for political reasons. I get that such ignorance works for a populace desiring outrage. To double down on it when presented with the facts is simply willful ignorance, an entire bigger level.
There are many "rules of thumb," but pretty much zero of them capture the entire nuance needed for the item at hand, which is why they are rules of thumb. Rule of 72 for compound interest works, somewhat, as long as you stay near 7-10% interest. Chemical reaction speed doubling every 10 degrees Celsius works, as long as you stay near room temperature and pressure and don't hit certain odd cases. The ideal gas law works, but only again in special cases. 'i' before 'e' except after 'c' works, except when it doesn't.
This is the same thing. Every rule of thumb is a rough idea, but never the final answer.
2 quarters may be a rule of thumb, but it is not a the definition. It's too coarse.
Also, if you're going to post articles, please read them first.
Show me in the 1974 NYT article where the NBER defines a recession.
https://thehill.com/policy/finance/3579988-is-there-a-recess...
Upon further research, it seems pretty shady. According to this, one of their members took $100K from Uber to write beneficial articles on them through the org. Seems they also don't confirm a recession until a year has past. It's telling that you give them such credence.
You just quoted the fact that the NBER defines when is is a recession: "The bureau considers a recession to have occurred when there has been an extended substantial, and widespread decline in aggregate economic activity—or, duration, depth, and diffusion. The bureau has not specified the breakpoints which distinguish recessions from milder slowdowns. Its experts depend rather on comparisons of current cyclical trends with what happened during previous business cycles, a process that involves some qualitative judgment and interpretation of cyclical trends."
Each economic environment may have specific factors that make it a recession or not, and there is not published any simple rule. There is no way you (or I) would be able to understand the nuance they consider - they even state it's based on each event so they can consider the many, many factors before calling one.
Since there is no rule as simple as the two quarter belief, the NYT article does not state such a simplistic rule. A complex rule would be beyond the readership of the NYT, so they would not write it out anyways.
If you really cared to learn, I suspect there's tons of papers, and likely even past meetings minutes, on how each one was decided. If you learn enough to understand those, then you might understand why there is such nuance.
Are we now in agreement that recessions in the US have not been defined according to a simple 2 quarter rule now? And that the NBER has historically been the group of experts that makes the determination? Or do you still disagree that is how it have been done for a long time now?
>Upon further research, it seems pretty shady.
Yes, you cannot remove the conspiracies from someone that really wants one. Your 5 minute research surely surpasses the quality of the rest of the entire profession.
> It's telling that you give them such credence.
I find experts more reliable than uneducated internet mobs.