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dammfoolman

What Technical About A “technical Recession�

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With all the talk of countries emerging from recession, I thought I would pour petrol on all talk of “green shoots†and bring to everyone’s attention the fact that the term “technical recession†was made up on the back of the envelope.

Art Okun describe the motivation for defining the term on a BBC world service interview a while ago (can't find the link)

"Art had the neat idea that if we had a definition of recession which meant that people could say we are not actually in a recession, not technically, that would get the president out of a difficulty.

"So on the back of an envelope he invented the idea that in order to call it a recession you had to have had two consecutive quarters of negative growth."

http://waugh.standard.co.uk/2008/12/why-technical-r.html

So a challenge for the HPC massive – What’s technical about a technical recession?

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So a challenge for the HPC massive – What’s technical about a technical recession?

It ignores anything subjective and simply uses a single number (GDP) which is claimed to be objective (whether that is true or not is a longer thread)

I think that is enough to be called a technical indicator.

Of course, it seems to have been used asymmetrically, two quarters of -ve to go into a recession but one quarter of 0 or +ve to come out again. Convinent for politicians of course.

VMR.

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