Is California in Recession? (Part XVI)

February coincident indices from the Philadelphia Fed are out. Time to re-evaluate this assessment from slightly over a year ago in Political Calculations that California was in recession.

Going by these [household survey based labor market] measures, it would appear that recession has arrived in California, which is partially borne out by state level GDP data from the U.S. Bureau of Economic Analysis. [text as accessed on 12/27/2017]

The release provides an opportunity to revisit this question (the Q3 GDP figures are discussed here). It’s (still) unlikely that a recession occurred.


Figure 1: Log coincident index in US (black), and in California (blue), both in logs, normalized to 2011M01=0. Blue arrow at timing of Political Calculations recession conjecture. Source: Philadelphia Fed and author’s calculations.

 

According to my work with Ryan LeCloux, the growth elasticity of real GDP with respect to coincident index is about 0.60 (statistically significant), so we can be reasonably certain that GDP is still trending up.

5 thoughts on “Is California in Recession? (Part XVI)

  1. Zi Zi

    Detroit went from the envy of the world to decline over decades. Maybe it’s also worth looking at how to make economic-technological development sustainable for common people across generations. — Your paper is definitely brilliant.

    Reply
  2. Bruce Hall

    California is definitely not in a recession. But some think that California is underperforming, given the many historical and natural advantages it has.
    http://www.newgeography.com/content/004404-the-california-economy-when-vigor-and-frailty-collide
    http://www.newgeography.com/content/004405-the-california-economy-a-strength-vs-weakness-breakdown
    Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at clucerf.org

    Concluding paragraph for those unwilling/unable to read the articles:
    California cities are constrained by California policy. That doesn’t mean that California cities are without tools for economic development. Almost any California city — no matter which region it is in — is a better place to live than almost any city in, say, Texas. If that can be leveraged by minimized costs, flexibility, and creativity in adapting to the needs of job-creating businesses, a California city, even today, can assist businesses creating opportunity for its citizens.

    Reply
    1. pgl

      “But some think that California is underperforming, given the many historical and natural advantages it has.”

      And the former Mrs. Bezos is pissed that she did not get 25% of $1 trillion. Jeff – you lazy scum getting the family wealth up to a mere $140 billion.

      Hey Bruce – thanks for the comic relief!

      Reply
      1. Bruce Hall

        pgl, oh, I’m glad to provide you with “comic relief” since you are one of those people who are apt to laugh at most anything they don’t understand… or can’t be bothered to read.

        But when you stop laughing, perhaps you have something of interest or true rebuttal to add. With what, exactly, you have a dispute? We’re all waiting with bated breath for your words from on high.

        Reply
  3. Moses Herzog

    My only thought on California is, the book is still out on Newsom. We don’t really know if he can be even near the leader Jerry Brown was. I like some of the stances he has made on education. Some of the things related to his personal life don’t speak very well of him as a person. If he can keep those things delineated from his job (and I am not really certain he has) then I guess I don’t have a big issue with it. But someone who takes close relationships in a casual fashion, to me, is very off-putting. If nothing else it would cause me to make a couple more thoughts before scratching in a ballot blank.

    Even if Newsom does very well as California Governor, I don’t think I could ever vote for him as U.S. President. There’s just too much of an odor there.

    Reply

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