Tuesday, September 25, 2012

the return of Dali-onomics

Recently I posted about a graph so strange, it could have been made by Salvadore Dali. Well, the mad grapher is back and better than ever.

Here is a link to the whole post.

Here though is the money graph:

Here we are graphing a decidedly non-standard monetary aggregate created by the Bill Barnett: "CFS M4 Divisia" (you can find some information about it here).

Our artiste creates the other line in the graph, "the optimal amount of M4 divisia by plugging in potential nominal GDP (as estimated by the CBO) and actual trend money velocity (as estimated by the Hodrick-Prescott filter) into the equation of exchange (i.e. M*t= NGDP*t/V*t )."

Got that? So we take some non-linear combination of 3 completely made up things to get our crucial real thing.

And it turns out that we have a shortage! Of what? Let me get back to you on that.......


Andrew said...

A shortage of M4 Divisia! We can print that, right?!

ajay said...

great post