Aphs of Key Economic Trends

13/9/2014
Graphs of key economic trends | Econbrowser
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Graphs of key economic trends

Here are some graphs of economic data that illustrate some interesting trends.
Atif Mian and Amir Su note that U.S. median family income grew with productivity in the forty years
following World War II but has since fallen behind.
And Martin Neil Baily and Barry Bosworth note that while U.S. manufacturing output has grown at the
same pace as the rest of the economy, U.S. manufacturing employment has not.
http://econbrowser.com/archives/2014/03/graphs-of-key-economic-trends
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In terms of monetary policy, the Federal Reserve Bank of Atlanta is now regularly reporting the Wu-Xia
shadow fed funds rate. The latest estimate indicates that a return to higher interest rates was farther
away than ever as of the end of last month. For a description of what this series tells us, see my
discussion here.
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Source: Federal Reserve Bank of Atlanta.
On world oil markets, the Wall Street Journal observes that Iraqi oil production is at its highest level in 30
years.
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Iraqi oil production in millions of barrels per day. Source: Wall Street Journal.
But Peak Oil Barrel notes thats more than outweighed by recent turmoil in Libya.
Source: Peak Oil Barrel.
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This entry was posted on March 23, 2014 [http://econbrowser.com/archives/2014/03/graphs-of-keyeconomic-trends] by James_Hamilton.
33 thoughts on Graphs of key economic trends
weird steve
March 23, 2014 at 8:33 am
Thanks for all, very interesting stu .
Dave Backus @ NYU

March 23, 2014 at 8:54 am
The Baily-Bosworth gure is misleading if you think of it in terms of the previous one, namely income: the
price of mfg is going down as productivity rises. So were producing more with less, and also getting less
for it. If you look at mfgs nominal share of value-added, its falling throughout the period. See here:
http://pages.stern.nyu.edu/~dbackus/2303/slides_intro_f13.pdf
Or from the BEA, see GDP by industry:
http://www.bea.gov/iTable/iTableHtml.cfm?
reqid=51&step=51&isuri=1&5101=1&5102=5&5113=22r&5111=1997&5112=1
Steven Kopits
March 23, 2014 at 11:44 am
The presentations ne as it goes, Dave. But a Steelers fan? New England, surely. Baltimore, possibly. But
Steelers? Thats a signi cant personality defect, guy.
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The Steelers had a terrible year, certainly the rst half. Thats a tremendous organization, but what a bad
year. As for New England. Oh gees, well have to recruit widows and orphans again this year. I think well
get stuck behind Denver again this year, and no one in the AFC is going to make it past SF or Seattle. But I
can tell you this, New England would have lost more gracefully to Seattle in the Super Bowl.
Id also add that Pittsburgh will be back. Pittsburgh, Baltimore. You can never count them out.
Ben Around
March 24, 2014 at 11:02 am
Indeed. Real value added growth re ects the combined e ects of growth in labor input, capital services,
and multifactor productivity (MFP). Labor input has obviously declined steadily for some time. Capital
services from equipment, structures, and software have more than held their own. At least since 1987,
though, MFP has accounted for about half of manufacturing real value added growth, and substantially
more in recent periods. This leads to declines in output prices.
It is important to note, however, as Bosworth and Baily point out in their article, that nearly all of the
credit for manufacturing holding its own relative to GDP is due to computers and electronic components,
a category that accounts for only about 10 per cent of manufacturing nominal value added. The
remaining 90 percent of manufacturing had an average annual real growth rate of 0.6 percent.
Nony
March 24, 2014 at 11:10 am
Immigration has been pretty substantial as well, putting downward pressure on wages (or retarding
upward pressure, however you want it). Look at construction trades for instance.
Luke The Debtor

March 23, 2014 at 9:18 am
Do productivity measurements factor in people being low-balled on wage income?
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Peter S
March 23, 2014 at 10:29 am
May I suggest a close reading of a recent post by Michael Pettis:

http://blog.mpettis.com/2014/03/economic-consequences-of-income-inequality/
Bruce Hall
March 23, 2014 at 10:46 am
Interesting. Basically shows that manufacturing output has been separated from human labor. Thats not
necessarily a bad thing. If we were stuck with 1990 ratios, think how many oppy disks it would take to
store all of your les or even old CDs if you wanted to be cutting edge. What it does is break an old
relationship between labor and management, especially unions. Workers have to be more trained and
highly skilled. Flopping a piece of sheet metal into a press is not enough anymore. At least not if you want
to earn $25+ per hour.
Perhaps that is why the aggregated median income has attened out. People have not recognized the
reality that pursuing manufacturing employment is increasingly di cult and demanding of both
academic and vocational skills. The service sector jobs to which the semi-skilled are migrating o ers fewer
opportunities even at $10 per hour minimum wage.
Steven Kopits
March 23, 2014 at 11:23 am
Peak Oil Barrel. I was not familiar with this source. Have I met Ron Patterson? Not sure. (Apologies if I
have.)
In any event, Ron reviews my Columbia speech here: http://peakoilbarrel.com/can-depend-call-opecopec-peaked/
The review notes that I ridiculed the IEAs often used term a Call on OPEC. This requires clari cation.
In a demand-constrained model, the call on OPEC is, in fact, an important concept. In such a model,
supply and oil prices ultimately depend upon the intentions of OPEC, which acts as the swing producer,
increasing or decreasing production as necessary to stabilize the market (as OPEC sees it). Therefore,
understanding the call on OPEC if in fact quite important, and something analysts should and do spend
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considerable e ort on.

In a supply-constrained market, by contrast, OPEC can only choose volumes, not prices. Thus, prices will
tend to revert to the carrying capacity price no matter whether supply is added or withdrawn, at least
within reasonable margins. This notion gains considerable support from oil price volatility data, which
shows Brent price volatility at historical lows by a signi cant margin. Prices are tending to revert to a
central value, with little variance around it. In such a model, the residual is not the call on OPEC, but
rather, GDP growth.
Now, I take issue with the call on OPEC as an attitudinal matter. It somehow conveys the sense that
OPEC is subordinating its own interests to that of the global community, that King Abdullah is waiting by
his phone for a call from Washington. I personally nd this insulting. For example, suppose we were to
use the notion of, say, a call on GM for car production, whereby GM would wait until all the other
manufacturers had produced as much as they wanted, and then GM would produce the residual. I doubt
either GM or the US public would consider this an acceptable state of a airs. However, OPEC is supposed
to.
I instead would see Saudi Arabia and other OPEC producers as sovereign entities producing at levels
consistent with their own internal priorities. If Saudi Arabia wants to stabilize oil markets, thats their
prerogative. But its not their obligation. Its a favor to the rest of us, and we might want to keep that in
mind.
Nick G
March 23, 2014 at 1:19 pm
In such a model, the residual is not the call on OPEC, but rather, GDP growth.
I think of residual as the di erence between a models forecast, and the actual. Is that what you mean?
If you mean that oil prices limit GDP growth, which in turn limit oil prices, Id be curious to see evidence.
After all, a lot of commodities show peaks in pricing just before recessions (e.g., copper), but no one
claims that copper controls the economy. Please note that the history of association of oil shocks and
recessions doesnt count we need evidence of this existence in the *long-term*, not for short term oil
shocks. For instance, James Hamiltons analysis of oil shocks focuses on reductions in consumer capex on
vehicles this is a short term e ect of Fear, Undertainty and Doubt. For another, the St Louis Fed did
some analysis showing that the impact of oil shocks is short-term Ill dig it up for you, if that would help.
If Saudi Arabia wants to stabilize oil markets, thats their prerogative. But its not their obligation. Its a favor to
the rest of us
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That seems unrealistic. The kindest view is that its enlightened self-interest: price stability will help
prevent defection of customers to alternatives (the power of which the Saudis are very, very aware). A
less kind view is that its maximizing total revenue by maintaining price per barrel. Even less kind is the
view that its a quid pro quo for military protection of an illegitimate family dictatorship.
Steven Kopits
March 24, 2014 at 5:29 am
Nick
The residual is what balances the model. You could call it the balancing factor. Im not hung up on
vocabulary.
If youre an analyst making (traditional) demand-constrained forecast, then your supply and oil price
forecast ultimately depends on the actions of OPEC. So thats how youre balancing your model. I call that
the residual, whats left at the end. But if you want to call it the balancing factor, thats ne with me.
You are absolutely correct that the historical literature focuses on oil shocks, not chronic shortages. I am
one of the few people dealing with the chronic aspects of shortages. And I have written a great deal about
it, both here in comments and in various articles. For example, I have repeatedly noted that during
periods of price elasticity of demand, any damage to the economy will be done through volumes and not
prices, and that the Feds models focus only on price e ects.
A commodity will only limit growth if i) it is directly linked to a critical aspect of economic performance,
and ii) it has few or no near term substitutes. Oil links to VMT, about which Menzie posted recently, and
VMT has historically been closely linked to GDP growth. And there is no substitute for oil as a
transportation fuel in large quantity today. Copper is not necessarily key in either of those aspects. A lack
of copper can slow down the economy a bit, but its mostly related to infrastructure. It can be substituted
by other metals like steel, aluminum or plastic for piping. There have never been, to the best of my
knowledge, coal, gas, copper, gold or iron shocks to the economy. Copper and gold have shown peaky
tendencies, but theyre not central to economic growth.
As for defecting to alternatives, we are now in the ninth year since the legacy supply peaked out in 2005.
What sort of progress have we made to substitutes for oil as a transportation fuel? Pretty minimal, it
seems to me.
If Saudi is maximizing revenue per barrel, then there is no meaningful call on OPEC. OPEC is doing its own
thing independent of the interests of other countries. And thats entirely legitimate from my perspective.
Thats the point I was trying to make.
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Nony
March 24, 2014 at 10:00 am
1. Copper is supposedly a metal with few good substitutes. Here is a paper on running out of metals:
http://www.pnas.org/content/early/2013/11/27/1312752110.full.pdf+html
Im actually not crazy about the paper since they dont show their worksuch a short discussion, for 60+
elements. And since a real discussion/analysis ought to include some intuitions from pricing and the like.
And be published somewhere other than PNAS. But it is interesting and will be right up yall peakers ally.
2. I actually agree with you that a lot of the substitution is in the realm of doing without. For example,
taking the bus instead of driving a POV. Im sure there also is some substitution (e.g. gas heating versus
heating oil). Its probably a bit hard to disentangle from various factors of demand growth also (Asian
urbanization, pop growth, etc.). And of course subsititution has di erent time frames and barriers to
substitution. But even here, the years out oil futures market could be argued to be rational expectations,
so even though backwarded, still high. But thats why we pay you Ph.D.s the big bucks. Go enlighten us
by factor analysis orsomething.
3. I think the issue is not OPECs benevolence. We saw in 2008-2009, they took deliberate action to elevate
price from 47 (rather than being happy it was back in the band). If they could get decent volumes, and
maintain cartel discipline at 200, they would do that. The key question is are they taking actions to
control pricing or is it a full out free competition world. I think recent history shows them at least taking
action at times. So they are not gone. And the peaker/Simmons/crazy meme of Twilight in the Desert
and the like, looks pretty silly.
Nick G
March 24, 2014 at 6:59 pm
I am one of the few people dealing with the chronic aspects of shortages.
The idea of a depleting natural resource really isnt new to economics. We do quite well without whale oil.
any damage to the economy will be done through volumes and not prices
Youve made that argument. I dont think youve proved the case that a decline in volumes is damaging.
Let me make two simple counter-arguments:
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1) as prices rise, the least valuable uses will be dropped. People will make their driving vacations a little
closer to home. People will combine shopping expeditions. Container ships will slow down a little (and
reduce fuel consumption by disproportionate amounts, due to the 3rd power law of water vessel fuel
consumption. The impact on real economic activity will be minor.
2) as prices rise, people will move to equally good alternatives: more e cient cars, more aerodynamic
trucks, rail instead of trucks, etc, etc.
A commodity will only limit growth if i) it is directly linked to a critical aspect of economic performance
The word linked is badly ambiguous. Do you mean correlated, or necessary?
Oil links to VMT
Its correlated, sure, but oils not necessary to VMT. Nor is VMT *necessary* to GDP. Heck, carpooling
could provide most the balancing factor necessary in the short term, and electric vehicles will do it in
the long term.
there is no substitute for oil as a transportation fuel in large quantity today
Thats true only if you focus only on biofuels, or if you require a substitute that can be ramped up
overnight. Hybrid electric vehicles reduce fuel consumption by 50%, or reduce overall cost as well.
Extended Range EVs can reduce it by 90% while providing equivalent range. EVs can eliminate 100%.
Copper is not necessarily key in either of those aspects.
Exactly: its correlated, but not necessary. As is oil, in a very slightly longer timeframe.
What sort of progress have we made to substitutes for oil as a transportation fuel?
An enormous amount: every major car maker is now producing hybrids, EVs and plug-ins. It takes a
period of several years to develop such vehicles. Now, of course, we have to educate consumers of their
value, all the while battling misinformation from Fox News, et al.
OPEC is doing its own thing independent of the interests of other countries. And thats entirely legitimate from
my perspective.
Well, Saudi Arabia isnt very sovereign: its highly dependent on the US, and its an illegitimate dictatorship
which badly serves its own people, and damages the rest of the world by subsidizing a reactionary
religious sect in order to distract from its illegitimacy. It has drawn the US into several very, very
expensive wars.
Most importantly, they want to keep their customers hooked on a commodity which has outlived its
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usefulness.
Steven Kopits
March 25, 2014 at 2:55 pm
Here you go, Nick. Nice article from CNBC about how Americans can no longer a ord new cars.
And 80 percent of Generation Y, those born 1977-1994, who have no plans to buy or lease a car say
they cant a ord it.
http://www.cnbc.com/id/101522551
Nick G
March 25, 2014 at 10:35 pm
Steven,
I dont see anything new in this article. Average Americans have *always* been unable to a ord new cars:
thats why used car sales have historically outnumbered new car sales by 3:1, and why the average car on
the road historically has been very roughly 9 years old (or 6 years old weighted by VMT, which is skewed
to new cars ).
Personally, I can a ord to buy a new car, but I dont see the value I buy 7 year old cars for 40% of the
price.
Nony
March 23, 2014 at 5:14 pm
Why dont you just call it a cartel controlled price or a free competition price? You dont need to invent
these terms demand constrained and supply constrained.
The rst year micro econ book has very good insights here. How pricing falls out in free competition, in
monopolist pro t maximizing, in various scenarios of changes to the demand or cost curves.
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We are on a blog run by econ professors. Cf. Mans elds Managerial Economics. Even Wikipedia has a
surprisingly sound discussion.
Nony
March 23, 2014 at 5:23 pm
In 2008-2009, there WAS de nite cartel action to raise prices. No way, those producers drop production
like that in a normal free competition market.
See rst chart, here.
http://peakoilbarrel.com/opec-update/
While the blog post was constructed to show that OPEC is irrelevant and depletion the thing that drives
prices, it really supports an opposite interpretation. That 2008-2009 deliberate cutback after prices fell to
47 was clear, clear market action. OPEC not a paper tiger.
Steven Kopits
March 24, 2014 at 6:07 am
OPEC moved to support prices in late 2008 and early 2009.

The marginal cost of an incremental barrel was around $70 then, and the price had fallen to $30-40
dollars. OPEC cut production to raise prices back to around the global replacement cost level.
I would add that OPEC members are subject to quotas even now. Personally, I dont think production
would be much higher even if all restraints were removed. Were certainly not hearing any complaints
about producers cheating on their quotas.
Steven Kopits
March 24, 2014 at 8:05 am
Did you actually read Rons article, Nick?

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Nony
March 24, 2014 at 10:25 am
Im not Nick, but I think you are talking to me. Yeah, I read the article. And I got di erent insights from
what Ron was pushing. He serves to tee up the discussion even when hes wrong. I really valued his
charts. Its just that paradoxically it supported opposite POV! I had not known about the 2008-2009 OPEC
shorting. And when I saw that DRAMATIC volume cutback and then the clear change of 47 back to 100, it
sent shivers through me.
Remember what Rockefeller told other producers: Remember we are not each others enemy. The real
enemy is the CUSTOMER.
Well, I recognize that. And I want to get my enemies ghting amongst each other (price taking) so that I
bene t, rather than conspiring against me (cartel).
Nony
March 23, 2014 at 10:19 pm
More evidence of OPEC being the price controllers.

http://gulfnews.com/business/opinion/time-nigh-for-opec-to-adjust-production-levels-1.1307518
Steven Kopits
March 24, 2014 at 5:57 am
Nony
I avoid the use of the term cartel price for three reasons.
First, the market comprises players of di ering motivations. For example, Shell or Continental Resources
are pro t-maximizing price-takers, and they have been running full out. They are not restricting
production, something which would be required of a cartel. By contrast, the Saudis are revenue
satis cers, that is, they produce the oil needed to meet national budgetary requirements. Unlike Shell,
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which will try to produce as much as quickly and as pro tably as it can, the Saudis and other national
producers will tend to take a longer view, although they will try to maximize price per barrel ordinarily.
This does not necessarily imply cartel-like behavior, but it could. Finally, we have a number of NOCs which
are simply poorly run. Pemex, YPF and many others fall into this category. They are neither pro tmaximizers, nor long-term revenue maximizers. They are simply mismanaged due to local conditions. To
speak of a cartel therefore over-simpli es the situation on the ground and suggests collusion when in fact
none exists.
Second, in a supply-constrained model, the Saudis can only choose volumes, not prices. That is, if they
increase production by 1 mbpd, it will be absorbed in a few months and the price will return to the
carrying capacity level. Similarly, if they cut production, GDP growth will be restrained and oil
consumption will fall until the price returns to the carrying capacity level. The collapse of price volatility in
Brent suggests that this model is correct.
Third, the cartel is involuntary. It is the result of an oil supply that is simply unable to keep up with
demand regardless of the amount of money thrown at it. The e ect is the same as a cartel, I think, but
there is no collusion, merely a depleting asset reaching a mature stage.
Finally, supply-constrained modeling implies much, much more than just a cartel price. It implies falling oil
consumption in some countries, capex compression at the majors, improving access terms in heretofore
restricted countries, etc. Its a system of analysis, not a price point.
By the way, I anticipate we will see accusations of monopsonistic price xing by the oil majors in
procuring services. Thus, expect accusations of collusion between the likes of Shell, Chevron and Exxon in
the procurement of drilling services from the likes of TransOcean, Noble and SeaDrill. Why? Because as I
state above, we have a volume-insensitive, xed price system. That is, you can produce as much oil as
you like and sell it at the carrying capacity price. More supply doesnt suppress prices materially for more
than a short period. On the other hand, the consumer will be unwilling to recognize increased costs
through higher oil prices. Thus, as geology deteriorates, the oil majors will be forced to compensate
entirely (or almost entirely) on the cost side. That is, they will take a drilling rig at some de ned price, but
not above it. If youre TransOcean, youd observe that the oil majors are willing to contract your rigs, but
only at unfair prices. This again, will not be collusion, but rather devolves out of the nature of a supplyconstrained situation.
Nony
March 24, 2014 at 10:19 am
1. So what if there are some players in the market that are price takers and some that are cartel-action?
Im not surprised! You can still analyze and discuss that.
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The basic framework of a cost curve and demand curve are still relevant. And it helps to avoid the
confusion of price feedback mechanism of volume change (IOW, sliding along one line to an intersection
when the other line changed), versus fundamental change of the line (supply or demand CURVE) itself.
Its not just schoolboy stu . Its powerful, especially in a commodity industry. You can get very
complicated and layer things on top of that classical view, but you are missing a trick if you bypass it.
Dont be a macro-economist who doesnt understand micro. McKinsey and Goldman do their best work
(and Ive seen plenty of not so good work from them), when they analyze things classically and only layer
in the complexity later.
2. Very interesting about the majors. I love Exxon (almost worked there), but if they have to take it in the
shorts for getting in bed with Putin, so be it. And theres some decent info showing
collusion/coordination of Russia/OPEC, news stories on meetings and the like.
But Im glad we have a bunch of minors running around the Eagle Ford and the Bakken and the sands.
That marginal barrel is from price takers in free competition, shipping all over the place. Im sure they
would love to collude too (Harold Hamm gives me a shiver with wanting less volatility). But they dont
have the capability. Too many of them and the legal situation over here, not amenable.
A wedge can split a chopping block thick section of tree. Would love it if we got some cheating going on.
And our foreign policy needs to encourage shipping, not sanctions. Ship Persians, ship. Ship Libyan
rebels, ship.
I still remember the 70s to early 80s and all the running out of oil, all the OPEC is in control stu . If you
had said in 1981 that we would crack that cartel and enjoy 20 years of cheap oil, people would have
looked at you like some dreamy libertarian free market theorist. But it worked out, didnt it.
Lets do it again! More money for us. Less for the Russians and Saudis. If you really think oil is such a vital
factor of production for the overall economy, than it puts that much more impetus on cracking the cartel
and getting cheap prices.
Johnny
March 25, 2014 at 11:51 am
Nony : Where do you work ?

Did James allow you to spread insider know-how ?
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Nony
March 28, 2014 at 6:29 pm
Work?
No.
Je rey J. Brown
March 23, 2014 at 12:41 pm
In regard to net oil exports, depletion marches on. In regard to the remaining supply of post-2005
Cumulative Net Exports (CNE) from Saudi Arabia and the (2005) Top 33 net oil exporters, the question is
not whether we have depleted the remaining volume of post-2005 CNE, the question is, by how much?
Export Land Model
Following is a graph showing normalized values (year 2000 values = 100%) for Export Land, a simple
mathematical model which assumes a production peak in the year 2000, with a -5%/year rate of change in
production and a +2.5%/year rate of change in consumption. At the production and net export peak in
the year 2000, the ECI ratio (ratio of production to consumption) was 2.0, or consumption was equal to
half of production. The Export Land Model (or ELM) demonstrates that given an ongoing production
decline in a net oil exporting country, unless they cut their consumption at the same rate as the rate of
decline in production, or at a faster rate, the resulting net export decline rate will exceed the production
decline rate, and the net export decline rate will accelerate with time. Furthermore, if the rate of increase
in consumption exceeds the rate of increase in production, a net oil exporter can be come a net importer,
prior to a production peak, e.g., the US and China.
http://i1095.photobucket.com/albums/i475/westexas/Slide1_zps53b4428b.jpg
Six Country Case History
Following is a graph showing combined normalized values (year 1995 = 100%) for the Six Country Case
History. These are the major net oil exporters, excluding China, that hit or approached zero net oil
exports from 1980 to 2010. Note that even as production rose by 2% from 1995 to 1999, they had already
shipped, by the end of 1999, about half of their combined post-1995 CNE (Cumulative Net Exports). Also,
note that estimated post-1995 CNE, based on the seven year 1995 to 2002 rate of decline in the ECI ratio,
were 9.0 GB. Actual post-1995 CNE were 7.3 Gb (billion barrels).
http://i1095.photobucket.com/albums/i475/westexas/Slide2_zps6c3a6280.jpg
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Saudi Arabia
Following is a graph showing normalized values (year 2005 values = 100%) for Saudi Arabia. The rst three
lines are actual data. The fourth line, Remaining post-2005 CNE by year, shows the estimated values,
based on Saudi Arabias 2005 to 2012 rate of decline in their ECI ratio. I estimate that Saudi Arabia has
already shipped a little over one-third of their post-2005 CNE, in only seven years (through 2012).
http://i1095.photobucket.com/albums/i475/westexas/Slide21_zpsd1963fe3.jpg
Top 33 Net Oil Exporters
Following is a graph showing the normalized values (year 2005 = 100%) for the Top 333 net oil exporters in
2005 (countries with 100,000 bpd or more of net exports). As with the Saudi graph, the rst three lines are
actual data. The fourth line, Remaining post-2005 CNE by year, shows the estimated values, based on the
Top 33s 2005 to 2012 rate of decline in their ECI ratio. I estimate that the (2005) Top 33 Net Oil Exporters
have already shipped about one- fth of their post-2005 CNE, in only seven years (through 2012).
http://i1095.photobucket.com/albums/i475/westexas/Slide3_zpse00789d2.jpg
And following is a graph showing the 2005 to 2012 rates of change in the Top 33 ECI ratios, by country.
Based on the 2005 to 2012 data, 26 of the (2005) Top 33 Net Oil Exporters are trending toward zero net oil
exports (when the ECI ratio would be equal to 1.0). This is our global net export supply base:
http://i1095.photobucket.com/albums/i475/westexas/Slide1_zps5a656e89.jpg
Je rey J. Brown
March 25, 2014 at 10:47 am
As shown on the above charts, we know what the initial declines in the ECI Ratio (ratio of production
consumption) meant for a mathematical model and an empirical case history, in regard to post-export
rates of depletion in remaining Cumulative Net Exports (CNE), the question then is what do the post-2005
declines in the Saudi and Global ECI Ratios mean?
The (Export Land) model and the empirical (Six Country) case history show that the rate of depletion in
post-export peak CNE (Cumulative Net Exports) exceeded the rate of decline in the post-export peak ECI
ratio, i.e., the remaining cumulative supply of net exports fell faster than the rate of decline in
the ratio of production to consumption.
This implies that the rates of decline in post-2005 Saudi and Global post-2005 CNE exceed their respective
rates of decline in their ECI ratios.
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The seven year (2000 to 2007) exponential rate of decline in Export Lands ECI ratio was 7.8%/year. The
seven year (2000 to 2007) exponential rate of decline in remaining post-2000 CNE from Export Land, i.e.,
the exponential rate of depletion in post-2000 CNE, was 43.0%/year.
The seven year (1995 to 2002) exponential rate of decline in the Six Country ECI ratio was 2.7%/year. The
seven year (1995 to 2002) exponential rate of decline in remaining Six Country post-1995 CNE, i.e., the
exponential rate of depletion in post-1995 CNE, was 26.0%/year. (Based on the seven year, 1995 to 2002,
rate of decline in the Six Country ECI ratio, the estimated Six Country post-1995 CNE depletion rate was
17.0%/year).
The seven year (2005 to 2012) exponential rate of decline in the Saudi ECI ratio was 4.9%/year. The seven
year (2005 to 2012) estimated exponential rate of decline in remaining Saudi post-2005 CNE, i.e.,
theestimated exponential rate of depletion in post-2005 Saudi CNE, was 6.6%/year.
The seven year (2005 to 2012) exponential rate of decline in the (2005) Top 33 ECI ratio was 2.0%/year. The
seven year (2005 to 2012) estimated exponential rate of decline in remaining Top 33 post-2005 CNE, i.e.,
the estimated exponential rate of depletion in post-2005 Top 33 CNE, was 3.4%/year.
In regard to Russia, the ve year (2007 to 2012) exponential rate of decline in their ECI ratio was
2.3%/year. The ve year (2007 to 2012) estimated exponential rate of decline in remaining Russian CNE,
i.e., the estimated exponential rate of depletion in in post-2007 Russian CNE, was 4.0%/year.
Douglas Lee
March 24, 2014 at 2:08 pm
When comparing real income to real output, it is important to use the same price de ator for both
measures. Do this and the rst chart will show a di erent conclusion.
Menzie Chinn
March 28, 2014 at 10:24 pm
Not so sure; see this post.
Doug Campbell
19/21
13/9/2014
March 24, 2014 at 3:15 pm
Hey Menzie Another fascinating post. Its generally thought that a chunk of that Manufacturing Value
Added growth after 1997 may not have actually happened. Its a statistical artifact of a widespread index
numbers problem in govt statistics collection, whereby cheaper (and more numerous) intermediate
imports get reported as higher domestic value-added. See Houseman et al. 2010:
http://www.aeaweb.org/articles.php?doi=10.1257/jep.25.2.111
Hans
March 26, 2014 at 7:14 am
Mr Campbell, this thread was authored by, Professor Hamilton.

Please report to the deans o ce for Student A airs!
Doug Campbell
March 27, 2014 at 4:32 pm
Ah, yes, as soon as I posted I realized the mistake My apologies to Professor Hamilton.
Spencer
March 25, 2014 at 12:42 pm
Ive long wondered that the way the Fed calculates industrial production causes us to understate the
growth in industrial output.
Over the years industrial production of high tech goods has grown much faster than output of other
goods.
But in the IP data high techs share of output and capacity steadily declines a decade ago it was 15%
and now it is about 7%.
20/21
13/9/2014
That is because the de ater for high tech goods is frequently higher than the output growth of high tech.
If output grows 15% and prices fall by 20% nominal output falls by 5%
and the Fed uses the value of nominal production to determine the weight to give each sector in the
next years calculation of production and capacity.
So you have a situation where in year zero high tech output grows 2 or 3 times as fast as all other
but in year two high techs share of production and capacity is smaller than it was in year zero.
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Graphs of key economic trends | Econbrowser

Graphs of key economic trends

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Source: Federal Reserve Bank of Atlanta.

Graphs of key economic trends | Econbrowser

Source: Peak Oil Barrel.

Graphs of key economic trends | Econbrowser

This entry was posted on March 23, 2014 [http://econbrowser.com/archives/2014/03/graphs-of-keyeconomic-trends] by James_Hamilton.

33 thoughts on Graphs of key economic trends

Thanks for all, very interesting stu .

Dave Backus @ NYU

Graphs of key economic trends | Econbrowser

Luke The Debtor

Do productivity measurements factor in people being low-balled on wage income?

Graphs of key economic trends | Econbrowser

May I suggest a close reading of a recent post by Michael Pettis:

Graphs of key economic trends | Econbrowser

considerable e ort on.

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

OPEC moved to support prices in late 2008 and early 2009.

Did you actually read Rons article, Nick?

Graphs of key economic trends | Econbrowser

More evidence of OPEC being the price controllers.

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Nony : Where do you work ?

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Graphs of key economic trends | Econbrowser

Not so sure; see this post.

Graphs of key economic trends | Econbrowser

March 24, 2014 at 3:15 pm

Mr Campbell, this thread was authored by, Professor Hamilton.

Graphs of key economic trends | Econbrowser

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