Author Archives: Menzie Chinn

The National Savings Identity, Crowding-Out, and Apocalypse Predicted

Consider this prognostication from 2011:

Americans face the most predictable economic crisis in this nation’s history. Absent reform, the panic ahead is no longer a question of if, but rather when. A deterioration of confidence by investors in government’s ability to pay its bills will drive interest rates up, increasing borrowing costs for government, small businesses and families alike. A vicious cycle of debt will compound upon itself; the available exit options once the crisis hits will be limited; and all will involve pain. (p.59)

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Parsing the Employment and GDP Releases

The employment release reported a 209,000 net increase in nonfarm payroll (NFP) employment was below consensus, but still represented the sixth straight month of +200K net job creation. The net change in private NFP was 198,000. Here I want to note (1) the household survey based alternate measure of nonfarm payroll employment also continues to rise; (2) revisions in NFP and private NFP have typically been positive in recent months; (3) the 2014Q1 drop in GDP seems a little out of line with labor input.

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