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Ivan Kitov

 
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  • A 130-Year Long Argument Against The Solow Growth Model [View article]
    I have presented real GDP, RGDP, which is calulated as nominal GDP adjusted for the GDP price deflator. Real GDP is not a directly measured variable and thus depends on the definition of inflation. This definition is highly suspicious even after 1950. For example, http://seekingalpha.co...
    But before 1940, the annual increment of RGDP is 10(!) time lower than after 1950. This is at least a paradox: http://bit.ly/yxvxFD
    Feb 13, 2012. 04:38 PM | 1 Like Like |Link to Comment
  • A 130-Year Long Argument Against The Solow Growth Model [View article]
    thanks. I think that RGDP concept or measurements are all wrong and the extrapolation of RGDP trends intercepts 0 between 1920 and 1940 in all developed countries - http://bit.ly/yxvxFD

    Looks this world was created 90 years ago
    Feb 13, 2012. 03:59 PM | 1 Like Like |Link to Comment
  • What Deflates And What Inflates? [View article]
    Motor fuel is one of CPIs in Transportation category. Crude oil is in producer price index.
    Feb 8, 2012. 01:20 PM | 1 Like Like |Link to Comment
  • What Deflates And What Inflates? [View article]
    Thanks. You have given me a good hint. years ago I cross correlated about 100 CPIs and found that many of them are 99% similar (with possible time lags of several months) Will try to address this issue.
    Feb 8, 2012. 01:18 PM | 1 Like Like |Link to Comment
  • Employment Situation: The Effect Of Population Controls And Seasonal Adjustment [View article]
    Thank you. These articles are really interesting.
    Feb 7, 2012. 02:27 AM | 1 Like Like |Link to Comment
  • The S&P 500 In 2012 [View article]
    The difference between observed and predcited returns indicate that the annual S&P 500 returns will be growing in Q1 and Q2. The level of 1500 is not excluded. As an alternative, the BEA may reduce its estimates of real GDP growth in 2011 to approximately 0.5% instead of the current rate of 1.7%. Since the model is based on actual observations both cases are not excluded.
    Feb 7, 2012. 02:26 AM | 1 Like Like |Link to Comment
  • Monetary Policy In Japan Is Sound And There Is No Liquidity Trap [View article]
    The model says that this would not change the evolution of the overall price and thsu irrelevent.
    Jan 31, 2012. 02:10 AM | Likes Like |Link to Comment
  • Monetary Policy In Japan Is Sound And There Is No Liquidity Trap [View article]
    SA does not like too much math details in their articles and reject them. I follow up their requirements and refer to papers containing necessary information for readers needing deeper analysis. If you read the paper I have mentioned in my previous commen ( http://bit.ly/x21jcb) you might find results of cointegration and causation tests.
    A more thorough description of the model and results is in our book - http://amzn.to/xSSUYn
    Jan 30, 2012. 12:32 PM | Likes Like |Link to Comment
  • Monetary Policy In Japan Is Sound And There Is No Liquidity Trap [View article]
    1. In many developed countries the change in labor force leads inflation by years ( see this paper in Journal of Applied Economic Sciences http://bit.ly/x21jcb ). Naturally, we suggest that it happens so in Japan as well despite the zero year lead.

    2. The level of labor force is important, i.e the rate of participation times total number of working age people.
    the rate of participation is driven with a lag by GDP per capita ( http://bit.ly/xf1GG9 )
    3. There is a paper specifically on inflation in Japan:
    http://bit.ly/yIzIAf
    Jan 30, 2012. 10:13 AM | Likes Like |Link to Comment
  • Time To Invest In The New Zealand ETF [View article]
    Thank you for the article. However, my analysis shows that NZ will have hard time in the beginning of 2010s. It might be better to watch the near term developments.
    GDP will likely not be growing
    http://bit.ly/wNtJwG
    but unemployment probably will grow
    http://bit.ly/Am0Gkz
    Jan 24, 2012. 08:25 AM | Likes Like |Link to Comment
  • Delicate Relations: Markets And Macro [View article]
    In theory, any model should first describe biggest signals , where the influence of defining parameters is more clear. In physics we say signal-to-noise ratio should be the biggest possible to resolve model coefficients. When nothing changes, no model can be resolved.
    I always admire the inventiveness of economists who explain any large change by introducing a shock, i.e. a spike of unknown origin.

    Our model does look into the future when the number of 9-year-olds is used instead of GDP. A new age profile is now available from teh Census Bureau and we are going to update our S&P 500 prediction soon.
    Jan 24, 2012. 02:54 AM | Likes Like |Link to Comment
  • Delicate Relations: Markets And Macro [View article]
    There is a reliable statistical link between the S&P 500 returns and real GDP per capita in the US. This link is not linear but contains - the returns are defined by the growth rate of GDP. The model performs the best during large changes:
    http://seekingalpha.co...
    or here
    http://bit.ly/zcn4vy
    http://bit.ly/zRbRLC

    Sure, correlation is not causation, but causation is definitely correlation. So, correlation is a necessary but not sufficient condition. No model exists without correlation.
    Jan 23, 2012. 02:29 PM | Likes Like |Link to Comment
  • U.S. Economy Facing Japan-Like Deflation: What Investors Need To Know [View article]
    Deflation is really a long term threat to the stock market - http://bit.ly/wOcWDH

    and it indeed repeats the path of Japan - http://bit.ly/wiTxci

    as we described six years ago
    http://bit.ly/w2LHCG
    Jan 22, 2012. 09:28 AM | 4 Likes Like |Link to Comment
  • Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
    Freddy, CPI is actually larger than the GDP deflator by 20%. But teh GDP deflator is actually used to estimate real GDP. I do not think the GDP deflator is overstates its true value too much. There is a BEA paper where informal accuracy of real GDP is approximately 1%. I would agree with this figure.

    In my article, I warn researchers to use the real GDP estimates from the BEA as they are. When corrected for the difference between CPI and the GDP deflator before 1978, the real GDP series provides a much better fit in major macroeconomic relationships like Okun's law.
    In this post ( http://bit.ly/u3Z3wF ) I try to recover real "real GDP".
    Oct 27, 2011. 02:13 AM | Likes Like |Link to Comment
  • Why The Real GDP Estimate Is Wrong And Can't Be Used For Analysis [View article]
    If to apply the current definiton of the GDP deflator before 1978 the estimates of real GDP were different from those reported by the BEA. If to apply the " before 1978" definiton of the GDP deflator (i.e. CPI) to the estimates after 1978 these estimates of real GDP were different from those reported by the BEA. One should not mix two definitions in one time series. Otherwise, this series is wrong and results in wrong econometric inferences.
    It is like a shift from miles per hour to km per hour without changing nominal speed limit.
    Oct 25, 2011. 11:27 AM | 1 Like Like |Link to Comment
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