Figure 2: US GDP (constant prices) and total employment, 1977=100
Can I duplicate that?
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| Graph #1: Since 1977: GDPC1 and PAYEMS at FRED |
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| Graph #2: GDPC1 and PAYEMS at FRED |
Granted, RGDP appears to gain on employment much more rapidly after 1982 than before 1972. But that's fishy, because RGDP growth was faster before 1980 than after. Is the change in the graph due to a slowing of employment growth after 1980? Probably. But then, that is not evidence that the RGDP numbers have been falsely boosted by counting Finance as productive.
Well, that's disappointing.
Part 4 of 4
2 comments:
I think it makes sense that RGDP should go up faster than the size of the workforce, even if there is no funny business involved with how finance is tracked -- from technology.
Why is it always "nonfarm"? Does it look different if you include the farmers?
Exponential graphs are hard to look at on a linear scale like this -- the right side always looks bigger than the left side, even if it's not really. Maybe look like this?
https://fred.stlouisfed.org/graph/?g=iYoI
It does look look by eyeball there like there is a pre/post 1980 change. The blue is always above the red from 1980 to 2008. Whereas they're closer for the rest of the range. I don't know if that means anything. Maybe look at the same graph with FGDP replacing RGDP and see how different it looks?
Makes sense: technology driving output up faster than employment.
Jacob Assa provides FGDP data only back to 1977. His graph shows all his data. I would love to know how to calculate it farther back in time, but I don't. Also, the "System of National Accounts" (SNA) changes that he talks about only go back to 1968. MAYBE they didn't revise GDP all the way back to year one.
But they usually do. They don't hesitate to re-write history that way.
I never thought about needing a log scale for output relative to employment. Maybe. Still, Graph #2 shows 10 years or so where the two data series seem to run parallel. That's the unusual thing, or one of them. Call it a "flat spot".
Steve Waldman's Not a monetary phenomenon shows the flat spot in Real GDP relative to Civilian Labor Force.
You can see the same flat spot interrupting increase in Total Factor Productivity. I looked at it here.
Productivity is output per hour. Output to labor force is roughly comparable. These things are related.
Jacob Assa attempts to explain why the flat spot ended, without bothering to explain why it started.
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"Why is it always "nonfarm"? Does it look different if you include the farmers?"
Dunno why. It's almost insulting, isn't it?
I see Jacob Assa's graph description says "total employment"... I just used the measure I always use.
Maybe I should have used Civilian Employment Level. It's a little higher.
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