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For my thesis I'm writing about the Baltic states and why they didn't vote out their incumbent governments despite undergoing severe austerity. As part of that I'm looking at their growth rates from quarter to quarter, but the OECD website gives me two options to do so: Growth rate compared to previous quarter (GPSA) Growth rate compared to same quarter of previous year (GYSA)

I'm not sure which is used more often in academic literature, or is more useful for my purposes. I've seen both being used in newspapers, and so I'm not sure which is better. GPSA seems more volatile, but I think I've seen it being used more often as well.

Any ideas?

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  • $\begingroup$ Americans tend to look compared with the previous quarter and then annualize the rate. Europeans are more likely to compare with the previous year to reduce the impact of excess volatility in the quarterly numbers $\endgroup$ – Henry Jul 13 '17 at 22:15
  • $\begingroup$ go with GYSA (YoY year-on-year) $\endgroup$ – user14471 Sep 26 '17 at 14:11
  • $\begingroup$ perhaps you'd be also interested in 'P3S13: General government final consumption expenditure'-again GYSA $\endgroup$ – user14471 Sep 26 '17 at 14:25
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QOQ (quarter on quarter) GDP growth is more common, at least in the US and the UK.

See the press releases by the US BEA and UK ONS. For both, the headline rate is the QOQ rate.

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The OECD might be quite specific in their terminology. I think the use of QoQ (quarter on quarter) and YoY (year on year) are more commonly used.

In a general context, it seems the most used is YoY, at least when it comes to published books:

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A consistent picture emerges when looking at papers: YoY yields 3,140 results, whereas QoQ yields 355 results.

Now, these are general results, not specific to GDP. But they still reflect the fact that you will not go wrong using YoY, as it is a very familiar figure.

Finally, you are correct that QoQ GDP figures are likely to be more volatile than YoY, particular if seasonality has not been accounted for. Another benefit of using YoY growth rates is that people is more used to yearly growth rates, so any analysis will be easier to grasp to the reader.

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Both are combined. They look at the current quarter compared with the previous quarter, but first change the previous quarter up or down based on an average seasonal adjustment based on prior years. It's called the Seasonally Adjusted Annual Rate. SAAR. An obvious example is comparing toy sales in January with toy sales in December to calculate estimated toy sales in February.

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