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How 9-11 Helped End the Recession
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May 14, 2002
Christopher Thornberg
UCLA Anderson Forecast
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The initial release for the first quarter of 2002 was a surprise to most
economists, and especially for those of us who have been very bearish on the
economy. The annualized real growth rate of GDP was 5.8%, a strong indication
that the recession is finished and recovery is on the way.
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Yet despite this seemingly good news, the financial markets did not respond
well, Alan Greenspan seemed to become more pessimistic, and many economists
discounted the entire report as some sort of statistical fluke. One reason for
this was that a significant portion of the growth in real GDP came from one
source-changes in private inventories. According to the BEA, the increase in
the change in private inventories accounted for about 3.2% of the 5.8% growth
in overall GDP, well over 50% of the total.
So what do the inventory numbers tell us, and how does it relate to 9-11?
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Click here to download the answers
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