Comments on: What is Liquidity? (Part II) http://alephblog.com/2008/05/06/what-is-liquidity-part-ii/ Helping Institutions and Ordinary People Invest Better by Focusing on Risk Control Fri, 25 May 2012 21:31:47 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Lilguyhttp://alephblog.com/2008/05/06/what-is-liquidity-part-ii/comment-page-1/#comment-17565 Lilguy Tue, 06 May 2008 14:14:06 +0000 http://alephblog.com/?p=683#comment-17565 Thank you for this important contribution--and the work behind it. I think the B/D model is flawed in general, but I can't figure out how. Maybe it's the smoothing, but there has to be more than that. Most importantly, the smoothing makes a mess out of turns in the economy. This shows up in your yellow line of the last recession and, I think, the one we are now confronting. One methodological note: I know that BEA has changed methodologies periodically when counting employment. Have any of these changes occurred during the timeframe of your analysis? How would they affect the result? Thank you for this important contribution–and the work behind it. I think the B/D model is flawed in general, but I can’t figure out how. Maybe it’s the smoothing, but there has to be more than that.

Most importantly, the smoothing makes a mess out of turns in the economy. This shows up in your yellow line of the last recession and, I think, the one we are now confronting.

One methodological note: I know that BEA has changed methodologies periodically when counting employment. Have any of these changes occurred during the timeframe of your analysis? How would they affect the result?

]]>