Author Archives: James_Hamilton

A little slower growth

The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.3% annual rate in the first quarter. That’s a modest slowdown from the 3.1% average we saw over the previous 3 quarters. 3.1% is also the average growth rate for the U.S. economy over the last 70 years. But the Q1 reading is pretty much on par with the 2.2% average growth since the Great Recession ended in 2009.
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2018 Econbrowser NCAA tournament challenge

It’s that time of year again! By which I mean, the once-in-a-lifetime opportunity to enter the eleventh annual Econbrowser NCAA tournament challenge! All right, so last year you had a chance to enter the tenth annual challenge, which was kind of similar. But whether or not you tried it last year, here’s an all new roll of the dice to see how well you can predict the outcome of this year’s U.S. college men’s basketball tournament. If you want to participate, go to the Econbrowser group at ESPN, do some minor registering to create a free ESPN account if you haven’t used that site before, and fill in your bracket before Thursday at noon!

Negative interest rates

A few years ago, most economic models presumed that interest rates were subject to a lower bound of zero. Why lend a dollar to someone who only promises to pay you back 99 cents, when you could just hold on to the dollar yourself? But we now have several years of experience from Sweden, Denmark, Switzerland, Japan, and the European Central Bank in which the central bank successfully induced negative interest rates in hopes of stimulating a greater level of spending on goods and services. We have enough data now to take a look at how much that seems to have accomplished, and update my earlier discussion of this topic.
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Another event to study

One of the ways economists have tried to estimate the effects of the Fed’s program of large-scale asset purchases (LSAP) is using event studies of how the market responds in the thirty minutes following Fed statements of changes in the program. Yesterday’s announcement from the Federal Reserve that it is starting a gradual process of reducing its balance sheet gives us one new data point for such efforts.
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