New definition for a recession? - Aussie Stock Forums

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  1. #1
    white swans need love too Timmy's Avatar
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    Sep 2007
    Between the lines

    Default New definition for a recession?

    ANZ's Saul Eslake has presented the case for changing the definition of a recession, see this link (Need new recession definition: economist), and the same at this link (Recession needs a new definition, ANZ chief economist says)

    "I think a far better definition of a recession, and one which is much more meaningful to people who are on the edge of it, looks at the unemployment rate, which says that if unemployment rises by one-and-a-half percentage points or more in 12 months or less, then that's a recession," he said.

    I suppose one of my concerns with doing this is the, ahhhh, "flexibility" with which employment/unemployment levels seem to be measured, at least here in Aus., a fact commented upon by many here on the threads at ASF. Having said this, I don't know what sort of flexibility is applied to the GDP numbers, so maybe my concerns are misplaced (or perhaps not nearly suspicious enough...).
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  2. #2

    Default Re: New definition for a recession?

    Whatever definition you use for recession, some people will argue with it.

    I totally agree with Saul Eslake that unemployment figures are more meaningful to people during a recession, but GDP is probably more comprehensive as it would incorporate the effects of unemployment, trade etc.

    Looking at all indicators would be the best definition but far too complicated.

  3. #3
    Money can't buy Poverty Glen48's Avatar
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    Sep 2008

    Default Re: New definition for a recession?

    Until we get commonsense into working out the details nothing will change ...most people would say working 30-40 HRs PW is employed not 2 hrs a week.

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