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Context Is Important: More on MN vs. WI

Summary:
Reader Jesse Livermore thinks he’s discovered Wisconsin is in actuality doing really well vis a vis Minnesota. He writes: Wisconsin personal income growth dramatically outperformed Minnesota in Q1. Well, I’ll just say the level is sometimes just as important as the first derivative. That’s why I plot time series, rather than just quoting a quarter’s worth of growth. Here is a comparison of personal income over the past few years. Figure 1: Log nominal personal income for Minnesota (blue), Wisconsin (red), and US (black), all normalized to 2011Q1=0. Source: BEA, June 27, 2017, and author’s calculations. On a per capita basis, cumulative Minnesota personal income growth remains 0.7 percent higher (log terms) than Wisconsin’s. It has been higher since 2011Q1. My advice to anyone trying to

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Reader Jesse Livermore thinks he’s discovered Wisconsin is in actuality doing really well vis a vis Minnesota. He writes:

Wisconsin personal income growth dramatically outperformed Minnesota in Q1.

Well, I’ll just say the level is sometimes just as important as the first derivative. That’s why I plot time series, rather than just quoting a quarter’s worth of growth. Here is a comparison of personal income over the past few years.

Context Is Important: More on MN vs. WI

Figure 1: Log nominal personal income for Minnesota (blue), Wisconsin (red), and US (black), all normalized to 2011Q1=0. Source: BEA, June 27, 2017, and author’s calculations.

On a per capita basis, cumulative Minnesota personal income growth remains 0.7 percent higher (log terms) than Wisconsin’s. It has been higher since 2011Q1.

My advice to anyone trying to assess relative economic performance: plot the time series.

Menzie Chinn
He is Professor of Public Affairs and Economics at the University of Wisconsin, Madison

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