Technical Notes for ‘Never Mind Their Distrust of Data and Forecasts…’

This is a short appendix for our earlier post, “Never Mind Their Distrust of Data and Forecasts; Austrians Can Help You Predict the Economy,” in the usual Q&A format.

Why do you show three different series in the first chart?

We show “Net Private Debt from Census Bureau” because it has the longest history. We use it later to calculate 5-year credit growth figures for the period before the Fed’s “flow of funds” becomes available.

We deduct financial and real estate corporation debt in the second dotted line to show that private debt growth in the late 1920s wasn’t skewed by financial debt (as it was in the 2000s). We can only back out financial debt from 1926 (not enough data to use in the “savings rates and credit growth” chart), but this series jumped even more than “Net Private Debt from Census Bureau” between 1926 and 1929.

Where can I find your data?

Here’s a list:

Peak GDP or GNP

  • Calculated using GDP estimates from the BEA for 1929 to 2013.
  • Before 1929, calculated using GNP estimates from the Smits, Woltjer and Ma database: J.P. Smits, P.J. Woltjer and D. Ma (2009), ‘A Dataset on Comparative Historical National Accounts, ca. 1870-1950: A Time-Series Perspective’, Groningen Growth and Development Centre Research Memorandum GD-107, Groningen: University of Groningen.”

Private debt

  • “Net Private Debt per Census Bureau” is calculated from Series X 398 of the Bicentennial Edition of the Historical Statistics of the United States.
  • “Less Financial and RE Corporation Debt” is calculated from Series X 402 (private individual and noncorporate debt), V 174 (accounts payable and short-term debt) and V 175 (long-term debt) of the Historical Statistics.
  • “Nonfinancial Private Debt per ‘Flow of Funds’” is from the Fed’s Z.1 report.

Savings rates

  • From the BEA for 1929 to 2013.
  • Before 1929, calculated from Series F 9 and G 470 of Historical Statistics. Consumption data is available for odd numbered years only.

Change in private debt-to-GDP ratio

  • Calculated from Z.1 data for nonfinancial private debt from 1951 and from Series X 398 of Historical Statistics before that.

“Risky Lending” and “Lending from Domestic, Non-Money Savings”

  • From the Z.1.
  • “Risky Lending” combines the net flows in credit market instruments, repos and some interbank lending categories for the “Rest of the World” (Table F.106), the Fed (F.108) and private banks (F.109). It also includes the estimated credit market asset and repo portion of the money market fund and mutual fund holdings of each of those entities.
  • “Lending from Domestic, Non-Money Savings” combines credit market assets and repos for households (Table F.100), nonfinancial corporates (F.102), nonfinancial noncorporate businesses (F.103), insurance companies (F.114 and F.115), pension funds (F.116), closed-end funds and ETFs (F.122) and equity REITs (F.127e). It also includes the estimated credit market asset and repo portion of the money market fund and mutual fund holdings of each of those entities.
  • For further detail, see “Technical Notes for ‘3 Underappreciated Indicators’.”

Can you send us your data?

We offer worksheets and/or consulting, but not for free.  Email ffwiley@gmail.com.

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