Doug wrote: > The weight of the evidence is that the U.S. economy > is troughing, or did bottom out around December. > This could be a false bottom, a pause before another > downleg; the recovery could be weak, and might feel > little different from recession. But there's not much > point in ignoring the evidence.
Doug, I remember this "weight of the evidence" phrase quite well. Based on this weight of the evidence argument my clients/bosses had kept asking me to add this or that extra variable into the models I was trying to build as parsimoniously as possible, so I am not very fond of this phrase. But they were right in one sense: there are too many variables they try to watch and a variable that plays a significant role for sometime may become irrelevant for some other time. By the way, one doesn't build and estimate structural models for publication in Econometrica in the business world: you regress anything on everything and that is mostly it, or, at least, this is what they do there. We need to wait some more to see if the US economy is troughing. It may be, but it is too early to say. We also need to watch what is happening elsewhere. By the way, I am saying these as a scientist, not as some leftist who wants revenge!... Sabri
