The 2016Q1 advance release, discussed at length by Jim, provides additional evidence in favor extreme caution in tightening monetary policy — maybe even a reconsideration of the June rate hike that seems, according to conventional wisdom, a done deal.
A reader comments:
Your final jab in this post regresses the state output gap on the fiscal gap. You then conclude that there is a positive relation between the two and that this somehow implies that a reduction in gov’t spending is a drag on the economy. I’ll just point out that …. that gov’t spending is a component of GSP. Of course they’re positively related.
In Governor Brownback’s re-election campaign, he committed to 25,000 new jobs per year in his next term. This is reminiscent of Governor Walker’s August 2013 promise to create 250,000 new private sector jobs over the four years of his first term, by January 2015. How are things going?
On reading my recent post on Kansas economic performance in the reign of Brownback, which included this graph:
Figure 1: Private nonfarm payroll employment in Kansas (red), in US (blue), in logs normalized to 2011M01=0. Dashed line at 2011M01, Brownback term begins. Source: BLS, author’s calculations.
A&M Professor/Extension Economist Levi Russell writes “Your analysis is highly flawed”.
“A Crisis that Should Not Have Happened”
The experiment continues…
When Technocrats Are Pushed Aside
Yesterday I was at the 31st annual NBER conference on macroeconomics (along with fellow blogger Mark Thoma). Among the many interesting contributions was development of an extended data set on 25 different indicators for 17 advanced economies going back to 1870 by Jorda, Schularick and Taylor (2016).