Equations and Differentiations3 November 2008
A couple of things to note about this story:
Eurozone is on verge of recessionfrom BBC
The eurozone is on the brink of recession with economic growth falling 0.2% in the second quarter, the European Commission has announced.
First, we yet again have the BBC confusing a rate of change with the thing changing, The last time that I took note of such confusion from them, they were confusing the growth rate of GDP (ΔY/Δt) with the change in that growth rate (Δ2Y/Δt2). This time, they've turned around to confuse the growth rate of GDP (ΔY/Δt) with GDP (Y) itself. (If they maintain the earlier confusion, then by transitivity they confuse Y with Δ2Y/Δt2.)
The Eurozone economy isn't growing 0.2% more slowly than before; its production is shrinking at a rate of 0.2%. (GDP is not itself a growth rate of under-lying wealth, because the vast majority of what is produced is consumed, rather than saved.)
A second thing to note is that the BBC is referring to the Eurozone as
on the verge of a recession, while America
may already be in recession. The brute fact is essentially the same across these two economies — one quarter in which production declined — but the Eurozone is made to seem on the cusp while America is presented as perhaps already well-in.