High frequency estimates are falling, while consensus forecasts are for a turnaround in 2009H2. First, consider two estimates of GDP released today.
Yearly Archives: 2008
Finding the exit
How you think we might get out of our current economic problems has something to do with how you think we got into them in the first place.
The Global Economic Crisis
Here’s the video from a panel convened by the University of Wisconsin’s Center on World Affairs and the Global Economy (WAGE) on November 20, 2008. Presenting were
Alison Alter, Associate Director of WAGE; Mark J. Ready, Professor of Finance, Investment and Banking; Darian M. Ibrahim, J.D., Assistant Professor of Law; Menzie D. Chinn, Professor of Public Affairs and Economics; and Mark S. Copelovitch, Assistant Professor of Political Science and Public Affairs, and Edward Friedman, Professor of Political Science.
My powerpoint presentation was posted here if one just wants the slides.
John Taylor on the Federal Reserve
Stanford economics professor John Taylor has a new paper in which he takes aim at recent economic policy, and fires with both barrels, concluding that “government actions and interventions caused, prolonged, and worsened the financial crisis.”
Incipient Chinese Yuan Depreciation in Context
Plenty of breathless commentary on how Chinese yuan depreciation against the dollar might trigger conflict. From Barrons:
Reality Check for China
By LESLIE P. NORTON
The currency’s decline could dampen foreign speculators’ enthusiasm
Last week, China’s currency, the renminbi, juddered to its biggest one-day decline against the greenback since Beijing began a managed float in 2005.
Says Win Thin, a currency economist at Brown Brothers Harriman: “The prospect of appreciation is off the table for now.” Morgan Stanley now expects China to depreciate its currency by 5% to 10% in the coming year. The current rate is 6.88 to the dollar.
Predicting the trough and a jobless recovery
Michael Dueker is a senior portfolio strategist at Russell Investments and formerly was an assistant vice president in the Research Department at the Federal Reserve Bank of St. Louis. Michael is also a member of the Blue Chip forecasting panel.
In early February 2008, Michael submitted a piece to Econbrowser that correctly predicted the onset of the current recession, using a model-based forecast.
We are pleased that that he is now presenting forecasts from the same Qual VAR model concerning the recession’s trough date and the magnitude of a jobless recovery to follow, subject to the disclaimer that the content is the responsibility of the author and does not represent official positions of Russell Investments
and does not constitute investment advice.
Comparing recessions
Last week was a tough one for the optimists.
Real Change…
…is repudiation of the no-nothing-ness of the past. From Bloomberg:
Dec. 7 (Bloomberg) — President-elect Barack Obama said the nation owes its military veterans “a sacred trust” and named retired four-star General Eric Shinseki to make the U.S. Department of Veterans Affairs “a 21st century” system.
“No one will ever doubt that this former Army chief of staff has the courage to stand up for our troops and our veterans,” Obama said at a press conference in Chicago, held on the anniversary of the 1941 attack on Pearl Harbor. “No one will ever question whether he will fight hard enough to make sure that they have the support that they need.”
Shortly before the 2003 U.S. invasion to oust Iraqi dictator Saddam Hussein, Shinseki told Congress it would take several hundred thousand troops to stabilize postwar Iraq, more than then-Secretary of Defense Donald Rumsfeld had estimated.
Rumsfeld roundly rejected Shinseki’s assessment, insisting the effort could be accomplished with a U.S. commitment of no more than 150,000 troops. He also cut short Shinseki’s tenure as chief of staff, which critics of the Bush administration said was punishment for Shinseki’s testimony.
The Employment Situation in Pictures
Rather than engage in long commentary, I thought a set of pictures would be sufficient to convey the deteriorating macroeconomic situation, at least as reflected in the labor market.
Measuring Import Prices: Implications for GDP Growth
A lot of what has happened to GDP growth over the past few quarters has, in a mechanical sense, depended upon developments in the external accounts. In this post, I examine whether mismeasurement of import prices might have induced mismeasurement of economic output. This idea was prompted by hearing a presentation of Nakamura and Steinsson a couple months ago. The abstract to “Lost in Transit: Product Replacement Bias and Pricing to Market”: