Quote:
Originally posted by wig@Jul 3 2003, 12:16 PM
Colin,
If the last Depression was 1929-37 +/- and a Depression happens about 1 decade out of 10, aren't we approaching the end of the average distance between them?
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Doesn't matter if a depression is essentially an independent event. Coin flips? Does a lack of a depression in one decade increase the probability of a depression in the next. There's no data for that. Even my 1 in 10 was just shooting off. What's the error in assigning probability from one event even if all other events were constant? About 100%. (square root of one divided by one).
How does one define a depression anyway? I think "depression" is just the old term for a recession and was pretty much retired after "The Great Depression". In the 1800s, what we call recessions were commonly called depressions.
If a recession is two consecutive quarters of shrinking GDP (I'm partial to that definiton) what should a depression be? If one is making predictions it at least makes sense to define what one is predicting otherwise you're just talking smack ;-). I think it would have to be worse than any of the recessions since the depression to qualify.