"Economies are long-run processes; they should be evaluated as such. What happens in any arbitrary time period - a month, a quarter, or even a year - typically is too filled with short-run distortions and lags to present a reliable picture of an economy's long-run trajectory."This is a very important observation. Economies should be characterized as long-run processes. Of course, the "data" we use to measure and characterize our economy empirically are measured over short-run periods of time. However, we "slice" time to get a snapshot picture of our economy, we can't clearly understand from the snapshot much about the long-run processes of the economy.
Monday, November 06, 2006
Doon Boudreaux writes: