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by RC_ITR 1356 days ago
The reason the government defines the recession as 4 months is because we did not see two quarters of GDP decline as much as we saw 4 months of it.

Shift the quarter to begin in Feb and you'd only have 1Q of decline.

That is why the 2 quarters rule is stupid and why 2020 doesn't fit the rule.
1 comments
rory 1355 days ago
It clearly does fit the rule because the year doesn't start in February. There's no need to change reality so you were right.

It's just a rule of thumb, not some profound maxim of economics.

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OJFord 1355 days ago
The point is that if all the bad happened in half the quarter, that can make quite a difference, and the quarter start/end date is entirely arbitrary.

That said, you can apply the same to GP's suggestion of months, if the timescales are even shorter.

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rory 1355 days ago
Yeah, the cutoff points for any rule of thumb are going to be fairly arbitrary. I don't understand why people are treating this like a profound observation.
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