It’s instructive to compare what’s currently happening to the auto sector and the U.S. economy with what we saw in the wake of the 1990 oil shock.
Yearly Archives: 2008
Revisions matter. So do levels
The 1.9% SAAR growth rate in 2008Q2 [BEA] is widely viewed as a positive [0]; and the fact that GDP growth remained, in this advance release, above zero is a positive. However, when taken with the annual revision, one sees some interesting aspects. Not only was growth in 2007Q4 negative, albeit slightly; the revisions put 2008Q2 real GDP below what the final estimate for 2008Q1 GDP was: $11692 versus $11701. Future revisions will definitely occur to the 2008Q2 figure, and indeed the figures back to 2006Q1 will be again revised come next July.
Not exactly a boom, either
While the latest GDP figures suggest an economy that continues to grow, today’s employment data are more consistent with the claim that the U.S. economy has entered a recession.
Not quite a recession
The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 1.9% annual rate in the second quarter of 2008, less than many analysts had been predicting a week ago, but substantially better than the 6-month-ahead predictions for that number that we were hearing back in January.
Due diligence
Tanta caught this story from the Orange County Register:
Oil prices and demand
More evidence of significant changes in the behavior of American consumers.
Taylor rules, exchange rates, and the speculation about the dollar/euro rate
As Europe teeters on the edge of recession [0], and the United States remains mired in slow growth, expectations of what interest rates, and hence exchange rates, are shifting. Here’s a familiar depiction of where policy rates in the US and the euro area have been, and where they are predicted to go.
Oil prices and economic fundamentals
Oil was selling for $123 a barrel on May 7, and that’s where it closed this week. Sounds like a calm and rational market, except for the fact that just last week it was going for $145.
Implications of adjustment to riskier dollar assets in a portfolio balance framework, illustrated in three steps
Consider a hypothetical world economy with assets denominated in dollars and euros.
Why a lot of people think the CPI is not representative of their experience … and are right. At least partly.
Government statistics, particularly the CPI, have been in the news (e.g., [0]). Following up on my previous posts [1], [2], I want to take a stab at the question posed in the title.
This post focuses on issue separate from the mathematics of the index formulation, and has to do with what the typical weights at any given instant in time should pertain to. Should one use the expenditure weights that pertain to all the households aggregated in the economy? Or should one use the expenditure weights that pertain to the “typical” household? Kokoski (2003) [updated link] summarizes the distinction thus:
In the democratic index, the expenditure pattern of each household counts in equal measure in determining the population index; in essence, it is a case of “one household–one vote”. In the plutocratic case, the contribution of each household’s expenditure pattern is positively related to the total expenditure of that household relative to other households–in essence, “one dollar, one vote”.