Here is a graph of Federal debt held by the public, as a share of GDP, 1990-09.
Despite the somewhat startling conclusion (at least to me), the implications are pretty straightforwardly arrive at. From Michael Rosenberg, Financial Conditions Watch (Bloomberg, Jan. 27, 2010) (link added 1/29 8am)
Fed Funds Rate Outlook — A Taylor Rule Perspective
With U.S. real GDP growth moving back into positive
territory in the second half of 2009 following four consecutive
quarters of negative growth (see Figure 1), the
economic forecasting community appears to be increasingly
optimistic about the U.S. economy’s growth prospects
Or, the end of the consumption follows a random walk view.
Following up this post last week on Lee et al., here is another analysis of consumption behavior, but this one is cross-country. From the abstract to “After the Crisis: Lower Consumption Growth but Narrower Global Imbalances?” by Ashoka Mody and Franziska Ohnsorge:
Here I offer some thoughts on President Obama’s new proposal.
The price and income elasticities of Chinese trade flows are key parameters in the debate regarding the importance of Renminbi revaluation in achieving rebalancing.  I was hoping to update my estimates to incorporate data spanning the recent crisis, but Shaghil Ahmed at the Fed beat me to the punch with a new working paper that includes data spanning the recent downturn in Chinese trade flows. From Are Chinese Exports Sensitive to Changes in the Exchange Rate?
Econbrowser readers are well aware that there are a number of issues on which I have concerns about some of the decisions the Fed has made, such as
dropping the ball on regulation (,
keeping interest rates too low for too long over 2003-2005 (,
taking some real risks with the Fed’s new balance sheet (,
pretending the Fed had nothing to do with the commodity price boom of 2008 (,
). Notwithstanding, there is no question in my mind that Bernanke should be reconfirmed as Chair of the Federal Reserve Board. Here’s why.
In several previous posts, I’ve emphasized the importance of future US consumption behavior in determining whether the global imbalances shrink, or revert to their pre-crisis configuration.    An IMF SPN by Jaewoo Lee, Pau Rabanal, and Damiano Sandri weighs in on the question of consumption. From the executive summary: