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Re: Misleading Economic Indicators ...
by francesco ranci
05 June 2002 15:59 UTC
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Interesting, though not 100% clear. 
Take the following sentence: "if the effects of
factors that cause economic fluctuations could be
ascertained before they have an effect on general
economic activity..." (right at the beginning). I find
it very hard to unravel... the "effect of a factor
that causes an economic fluctuation" seems to be an
"economic fluctuation" itself (whatever that means)...
such an effect is supposed to have an effect (I
thought causes had effects...) on the "general
economic activity" (again, whatever that is, as
opposed to a mere "economic fluctuation"...

I agree, however, that the definition of "business
cycle" given by Mitchell and Burns misleading, but for
the reason seems to me that focuses our attention on
"the aggregate economic activity of nations".

It's not only "interpretation" of data that matters, I
believe. Data are "constructions" in the first place.

Everybody would agree that central banks monetary
policy has some effect on business cycles, but thay
are also effects of business cycles and political
choices themselves. In any case, Shostak uses the
metaphor of the "trigger", without much of an argument
behind it (to justify the similarity).

I agree with him on the general critical point
(misleading indicators) and especially on the point
that, since NBER "announces its verdicts long after
peaks or throughs have been reached" its work is not
"of much help to businessmen and policymakers". 

Furthermore, we should never forget that economic
paradigms are many, and they are paradigms; i.e.,
basic assumptions on human behavior that need to be
verified (in a diverse and changing world). I mean:
the choice of how to see the world is a matter of

--- Luke Rondinaro <larondin@yahoo.com> wrote:
> I thought you all might like to see this article I
> found (through LewRockwellcom; source, Mises.org)
> and perhaps comment on it.  I'm not sure I entirely
> agree with its arguments, but I am interested in
> getting some of your own perspectives/impressions on
> the matter.
> Best!
> Luke R.
>                                    The Misleading
> Indicators by Frank Shostak
> ---------------------------------
> Do You Yahoo!?
> Yahoo! - Official partner of 2002 FIFA World Cup

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