Comments for Use Annualized Growth Numbers at http://www.cepr.net , comment 1 to 5 out of 5 comments http://www.cepr.net Mon, 20 May 2013 04:20:35 +0100 FeedCreator 1.7.3 http://www.cepr.net/index.php/blogs/beat-the-press/use-annualized-growth-numbers#comment-1390 Thanks, but I purposely chose a number that was a factor of 10 larger than DB's to illustrate the difference between the approximation and the correct calculation. In any case, what I wrote is, by itself, correct. - JC Wed, 07 Jul 2010 16:30:22 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/use-annualized-growth-numbers#comment-1389 Almost right, JC. DB stated that the quarterly rate was 0.3%, which is 0.003, and that would make the annualized rate = (1 + .003)^4 - 1, or 0.012054...., or 1.2054%. - terryh Wed, 07 Jul 2010 14:59:44 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/use-annualized-growth-numbers#comment-1383 Actually, DB describes the procedure incorrectly. If r_q is the quarterly rate, say r_q = 0.03, then to get the annualized rate, r_a, do r_a = (1 + r_q)^4 - 1 = 0.126 Taylor expansion (valid for small r_q) gives r_a approx 4*r_q - JC Wed, 07 Jul 2010 06:32:28 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/use-annualized-growth-numbers#comment-1375 4th power? Can you explain how an exponent is involved? Do you mean 4 decimal places? - fuller scmidt Wed, 07 Jul 2010 04:03:12 +0100 http://www.cepr.net/index.php/blogs/beat-the-press/use-annualized-growth-numbers#comment-1373 In the interest of consistent comparability and accuracy, credit card companies in the US will now be responsible for reporting all measures of annual GDP growth in the same way they report measures of annual percentage rate (APR) charges for credit cards. Despite the necessity of reading one thousand pages of fine print to understand it, the net positive benefits of this innovation in economic education are considered worth it. - izzatzo Wed, 07 Jul 2010 03:06:14 +0100