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The Pendulum Economy

The chorus of scepticism about UK NGDP targeting which has surfaced in the press since Carneymania deserves a response, which I’ll attempt at some point in the new year.  The Q3 Quarterly National Accounts have also resolved some mysteries in the national accounts, that also deserves a post.

Without the time for any of that, I’ll end the year with a graph I thought was interesting, if probably not in any way significant:

UK Domestic Expenditure versus Net Trade

UK Domestic Expenditure versus Net Trade

This breaks down real GDP into real gross domestic expenditure (consumption plus investment) and separately real net trade (exports minus imports).  I thought the pattern of swings since 2008 was curious; from falling domestic spending plus a positive net trade balance in 2008/9, to the inverse combination in 2010, then flipping back and forth again in 2011 and 2012.

And with that I’m done for the year… Merry Christmas!

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