‘A Powerful Signal of Recessions’ Has Wall Street’s Attention

Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by marcosdumay on Monday June 25, 2018 @01:14PM (#17393985)

There is something on the order of a decade between recessions.

A signal with a 3 years error is actually useful here. If the signal is instead "there will be something in 2-3 years", that's instead a great signal.

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Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by cal5k on Monday June 25, 2018 @01:18PM (#17394020)

As another commenter below astutely pointed out, with a mean time between recessions of 4.7 years you could blindly make this prediction every year and be right more often than not (with a 3 year window).

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Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by jonhendry18 on Tuesday June 26, 2018 @02:05AM (#17398249)

Um, how do you get 4.7 years as the mean time between recessions?

As someone elsewhere notes, since the 60s we've had a recession every 5 to 10 years. Were there two recessions a year apart that I missed?

EDIT: Ah, the other commenter supplied it as the mean length of an economic cycle, measured peak to peak or trough to trough.

But a trough in the economic cycle isn't necessarily a recession unless the trough is two quarters of negative GDP growth.

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Re:‘A Powerful Signal of Recessions’ Has Wall Street’s Atten... by comex on Tuesday June 26, 2018 @01:32AM (#17398114)

Perhaps, but a 50% accuracy rate is not all that impressive. While the sample size is low, it seems that historically, the yield curve as a predictor of recessions has been significantly more accurate than that.

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