By Pavlina Tcherneva (revised 10/10/14)
Here are my brief replies to his last post.
- Let me say it again. His business cycle chart is incorrect. One cannot make any sense of what is happening to the distribution of income growth over time by the way he reports his periods. To use his own words, it does not “convey history correctly”.
You can be the judge of whose method is better (his or mine) in calculating the business cycles, but even if you use his method, his results are wrong. See herewhere I present two business cycle charts (using both methods). Both methods yield completely different and more depressing trends than in his chart. It is unclear how he’s chosen his periods.
In a very disingenuous way, Winship, passes the hot potato and implicates Saez and Piketty in his own error, arguing that they do the same thing in Table 1 here. This is incorrect. Saez and Piketty’s table shows one whole time period and then several discrete periodsof various recessions and expansions and, unlike Winship, they have identified their expansions and recessions correctly. They do not report the history of all business cycles (go ahead, check).