heritage foundation EJ Antoni Channel ShadowStats:
“Government economic statistics hide the economic truth…” Tan [sic] you,
@mises highlighted a recent paper by @profstonge and I explaining how inflation is underestimated. Read the article by @RonPaul here.
https://t.co/cVroe5QwCT
I wrote paper in Antoni St. Onge Papers Using the “correct” deflator would mean that GDP in Q2 2024 would be below the level in Q2 2019, but let us highlight one fact: what the alternative GDP deflator means. I would like to.
sauce: Antoni and Saint Onge (2024).
Notice the large orange area in the graph above. Antoni and St. Onge attribute this to improved handling of housing costs. I try to follow their argument by using the product of home prices (the Case-Shiller National Home Price Index) and the 30-year mortgage rate instead of the BEA factors. Adjust real consumption accordingly (the authors do not mention adjustments to investment or government spending) and recalculate GDP (as shown in the paper). After updating the calculation with the latest house prices and NIPA data, we get an implicit deflator picture like this:
Figure 1: BEA’s GDP deflator (orange), BEA’s implicit deflator where housing costs are replaced by the product of house prices and mortgage rates, consumption 15% weights (light blue) and 30% weights (purple), and Antoni-St. .Onge implicit deflator GDP deflator (red square), all relative to Q1 2019. NBER-defined recession peak-to-trough dates are shown in gray. Source: BEA, NBER, author’s calculations.
In other words, we don’t know how Antoni and St. Onge calculated the alternative GDP or alternative deflator.
https://econbrowser.com/archives/2024/10/son-of-shadowstats-government-economic-figures-hide-the-truth-about-the-economy