Friday, October 19, 2012

Exponential trend breakdown: a novel analytical tool

Economic policymakers seem to act as if exponential trends will continue indefinitely.  Yet it is well documented that there are limits to growth.  Mark at Illusion of Prosperity has done an excellent job of identifying trend failures in measures of economic activity.   Good examples can be found at the following links:

Industrial Production

40.7 Million Missing Jobs

I ran a search on the terms "exponential trend failure" over at the RePec database (Research Papers in Economics) and came up with no relevant results.  Mark could package up all of his analysis into a paper and it would be legitimately be a novel analysis.

I also ran a search in Google Books for the terms (exponential "trend failure" economics) and the only thing that came up was the blog Illusion of Prosperity. Mark is on to something.


Stagflationary Mark said...

You'd think more economists would talk about exponential trend failures, if only because every exponential trend will eventually fail. It is a mathematical certainty.

No single locust believes it is responsible for the locust swarm's eventual failure though.

Scott said...

Yes, indeed; you are correct.