It’s Funny What Can Change in Three Years

The Freakonomics blog reports:

[On] Oct. 3, 2011, the S&P 500 closed at 1,099.23. Exactly three years ago, on Oct. 3, 2008, the S&P 500 closed at 1,099.23. As if investors needed anymore reason to be nervous these days.

Hmmm, that’s funny . . . what else can we dig up from three years ago?

On the Freakonomics blog on 10 October 2008, Steven Levitt featured “my colleague Casey Mulligan” arguing that “the fundamentals of our economy are strong” and that, with the unemployment rate of 6.1% at that time, “things are just not that bad” (in Levitt’s words).

So, from the Freakonomics perspective, if we’re in the same place as Oct 2008, why is this a “reason to be nervous”? Maybe Casey Mulligan is correct and it’s just a sign that the fundamentals of our economy are strong!

P.S. Unfortunately, the link to that 2008 Freakonomics post doesn’t work and I can’t find a blog archive for it. But here’s a reference. I assume that the original post is on somebody’s hard drive somewhere.

[Cross-posted at The Monkey Cage]

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Andrew Gelman

Andrew Gelman is a professor of statistics and political science and director of the Applied Statistics Center at Columbia University.