Tuesday, May 10, 2016

Lack of metastability

When I issued some predictions two years ago (that turned out well), I put up a speculative piece about what I called "metastability" in the unemployment rate. It was pure speculation that just came from looking at the unemployment rate graph:

Well, it turns out it is wrong. In the original data, there was (almost) never a case where unemployment went through the red or blue metastable level without pausing at it (it did fall through the blue level in the 1950s without pausing). However, the current data shot right through both the red and blue levels:

Here's the overall picture:

So there's probably no metastability.

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