Monthly Archives: July 2009

Mortimer success

Trade balance on goods and services (chain volume measures)

Intrigu­ing evi­dence that the Mor­timer Enquiry on Australia’s export per­for­mance (on which I served as an advi­sor) was remark­ably suc­cess­ful in its efforts to rein­vig­o­rate our trade bal­ance. ;-)

Of course, I knew it would be. (‘The exchange rate’, you say? Really?)

The ABS explains “trend estimates”

I’ve argued sev­eral times that the broad­cast media has mis­rep­re­sented quar­terly unem­ploy­ment by focus­ing on (the scarier of either) the raw or seasonally-adjusted data. Although there’s a great deal to be said for just eyballing a trend when you have a long time-series that accu­rately sam­ples an ‘atomic’ phe­nom­e­non, trends in a series with sta­tis­ti­cally sim­ple (‘nor­mally dis­trib­uted’) vari­abil­ity, like unem­ploy­ment, can rea­son­ably be rep­re­sented by a smoothed trend estimate.

Trend esti­mates are obtained by smooth­ing the sea­son­ally adjusted esti­mates, with an assump­tion that the irreg­u­lar com­po­nent is ran­dom and nor­mally dis­trib­uted. Dis­tor­tion of the trend esti­mate will occur in the pres­ence of an unusual event, and if no cor­rec­tion for the impact is intro­duced, then the trend esti­mate can be mis­lead­ing.” Extract from 1350.0 — Aus­tralian Eco­nomic Indi­ca­tors, Aug 2009

As the ABS release argues, this pro­ce­dure goes wrong when it’s no longer ‘busi­ness as usual.’ But the assump­tion that the world today is just like the world yes­ter­day is both pru­dent and pretty suc­cess­ful, espe­cially at the lead­ing edge of a trend with estab­lished vari­a­tion. Cor­re­la­tion of smoothed data series is a dif­fer­ent mat­ter: it may be a species of fraud.

FT iPhone App

FTMobile from the iPhone App Store


p>Get this. It’s ‘free’ (as in lunch). Sim­ply beau­ti­ful lay­out for the small screen. Lovely, infor­ma­tive mar­ket charts that can be refo­cussed with a screen ges­ture. Seems to eschew (an FT word!) images. Access, if you’re a sub­scriber, to most, if not all, of the paper includ­ing regional edi­tions. After a few hours use I would say that the user expe­ri­ence is bet­ter than the FT web­site: it loads faster, fewer ads, lay­out is more consistent.

Temperatures for June in Victoria

Temperature anomalies for June, 1950 - 2009

June 2009 was not as warm as June 2008, but still 0.8° C above the aver­age for 1961–1990, accord­ing to the Aus­tralian Bureau of Mete­o­rol­ogy. There have been ten hot­ter Junes since 1950.

Remove the buy-local tax on books

Yes! The right rec­om­men­da­tion for a more com­pet­i­tive and better-informed (or, at least, better-read) Aus­tralia.

The Gov­ern­ment should repeal Australia’s Par­al­lel Import Restric­tions (PIRs) for books. The repeal should take effect three years after the date that it is announced.” Extract from Research report — Pro­duc­tiv­ity Commission

This dis­cre­tionary quota on books main­tains local mar­gins for the global book pub­lish­ers and print­ers at the cost of read­ers and com­pet­i­tive Aus­tralian pub­lish­ing. Now maybe—at last—we will see a more aggres­sive release of elec­tronic titles (‘Kin­dle books’) in Aus­tralia. Wel­come to the 21st century.

Market and PPP measures of GDP

Source: IMF data mapperSource: IMF data mapper

In com­ments on the pre­vi­ous post, Ian Cas­tles AO, the for­mer Aus­tralian Sta­tis­ti­cian, notes that the World Bank and IMF cre­ate con­fu­sion in their reports by mixed use of market-exchange-rate (MER) and purchasing-power-parity (PPP) bases for esti­mat­ing out­put and growth. Sim­ply, using mar­ket exchange rates to com­pare the value of out­put among coun­tries over-estimates the size of devel­oped economies and under-estimates the size of devel­op­ing economies. This con­fu­sion affects their analy­ses of, among other things, trade data.

The charts (click the thumb­nails), taken from the two sets of data pre­pared by the IMF, show the dra­matic dif­fer­ence between MER and PPP bases for com­par­ing out­put and growth. Using the PPP basis for com­par­i­son, devel­op­ing coun­tries’ economies are much larger in rela­tion to devel­oped economies and pro­jected to ‘close the gap’ some­time after 2015 (take the IMF pro­jec­tions with a grain of salt: they’re just ‘straight line’ exten­sions of cur­rent pat­terns of growth). The only dif­fer­ence between the two charts is the iden­ti­fi­ca­tion of China. Note that using a PPP basis for com­par­i­son, China appears less dom­i­nant in the devel­op­ing coun­try group.

Caloric restriction diet doesn’t work

Reports this week that a “nutri­tious but reduced-calorie diet blunts aging and sig­nif­i­cantly delays the onset of such age-related dis­or­ders as can­cer…” are a per­verse account of a study that showed no sta­tis­ti­cally sig­nif­i­cant effect of calo­rie restriction.

Sandy Szwarc shows that the sup­posed ben­e­fits appear only if the results are cooked by ‘cherry pick­ing’ the trial’s mor­tal­ity records. She also sum­ma­rizes the weight of evi­dence that calo­rie restric­tion ‘life exten­sion’ is vodoo (or pos­si­bly a com­mer­cial ven­ture in this case)