The Perils of Using Seasonally Unadjusted Data
Many observers have used a flawed reading of the recent GDP figures to jump to the unwarranted conclusion that the Indian economy was unaffected by the note ban. While the government reveled at this unexpected positive spin, opponents apparently have been reduced to gnashing their teeth and muttering darkly about statistical skulduggery.
The true situation is a bit different. As we have already reported, seasonal adjustment would have shown that the quarterly growth rate has actually declined substantially in Q3, Seasonal adjustment is a commonly used statistical procedure and it has been considered essential practice for more than 50 years by most government statistical agencies around the world.