(Well, actually, the recession had been underway for nearly ten months, and after Lehman Brothers, on October 26th, 2008). Or why I worry about the White House economic policy management team. NO DEPRESSION; NO SEVERE RECESSION The medium term fundamentals point toward more real GDP, more employment, and (to a lesser degree) more consumption. Some […]
In today’s Economix post, Casey Mulligan argues that the greater than predicted unemployment numbers should not be ascribed to the negative effect of the stimulus, but rather to bigger than anticipated negative shocks.
We cannot blame the Obama administration for failing to predict June’s 9.5 percent unemployment rate. That result just shows the size of the shocks hitting the economy: Even the best forecasters can miss the unemployment rate by almost two percentage points, even when forecasting fewer than six months ahead.
I start teaching a couple classes tomorrow; here are some cautionary notes.
The Center for Research on the Wisconsin Economy (CROWE) sponsored a series of talks on the election and economic issues. Yesterday’s talk was by Princeton’s Alan Blinder (former CEA member, former Fed Vice Chair). His talk with Q&A is here (YouTube). Other visitors included Lee Ohanian, Diane Whitmore Schanzenbach, Casey Mulligan and Brian Riedl (Manhattan […]
From Mr. Riedl at Manhattan Institute: I really hope the fiscal stimulus debate doesn’t gain momentum. Not only is it premature…..but I don’t have the writing bandwidth to remind everyone how Keynesian stimulus is an outdated theory (the multiplier is close to zero) with a terrible historical track record.
In my mind, absent a shooting war, the economy is headed for a slowdown, if not a recession. I am confident that, should the administration or anybody else propose countercyclical fiscal policy, a set of the usual suspects will deny the efficacy of discretionary policy. Hence, a prebuttal is called for.
I was reminded as I found a photo of the January 2001 CEA and staff, of how economic analysis has evolved over time in the White House.
Indications are that a week from tomorrow, we will receive a very strong report on GDP growth (Jim will have his recession probabilities assessment soon after the release). (GS at 4.1%, MacroAdv at 5.0%, NY Fed at 2.8%, FRB Atlanta NowGDP at 4.5%.) At the same time, we are seeing a flattening of the yield […]
One of the most interesting papers presented at the Jackson Hole conference was written by Alan Auerbach and Yuriy Gorodnichenko, entitled Fiscal Stimulus and Fiscal Sustainability.
Yet more cautionary notes for my students.