When I was going through my rant about why year-over-year growth rate is not a good transformation for this period of volatile macroeconomic data, I might have made it look that I oppose it only during this period. In reality, I quite dislike year-over-year growth rate most of the time.
My biggest pet peeve is how is it used in news to indicate whether
something has contracted or not in a given quarter. Take, for example,
the Chinese GDP during 2022, shown in terms of level (blue) and in terms of
growth rate:
It is obvious that Chinese GDP experienced two quarter when
in contracted, that is second and fourth quarter of 2022, dropping by 2.7% and
1.1%, respectively in quarter-on-quarter terms (not shown here). Yet, in both
quarters the year-over-year growth rate remained positive, effectively thanks
to the accumulated growth in previous quarters.
And then comes a newspaper writer and writes “Chinese
economy avoided contraction in second quarter
of 2022”. Come on, how useful and correct is that?! What really annoys me is the terminology "in given quarter here". There is no way to characterize the experience as avoiding contraction in given quarter, because within that given quarter there was a contraction. The absence of contraction in terms of year-over-year growth rate is about the other 3 quarters...
But oh well, I know that this just me insisting on words having a proper meaning...
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