Macroeconomic indicators turning downward.
There is a recurring commercial going out over Wisconsin airwaves arguing for progress [0], link to . This impelled me to consult some metrics regarding progress in the state, following up on this
post from a month ago.
The claim that the Federal Reserve extended trillions of dollars in secret loans to banks continues to be spread. Here at Econbrowser we will continue to try to correct some of the misunderstanding that is out there.
For new econ Ph.D.’s about to look for a job, the University of Wisconsin has provided a short video of what you might expect when you give your first talk presenting your research to the faculty.
When I discuss Lost Decades I always stress the fact that the “s” denotes the plural. Figure 1 shows that a decade and a half in, the trajectory of output has been noticeably depressed since 2001Q1.
I was sitting in a briefing recently, where I heard how US GDP would be measurably affected by the floods in Thailand –- specifically through the shutdown of production of key auto parts. [0] That reminded me of the supply-chain-propagated impact of events nine months earlier, following the earthquake and tsunami in Japan. Here’s the trade-related part of the assessment from my colleague Isao Kamata’s article in the La Follette Policy Report, “The Great East Japan Earthquake: A View on Its Implication for Japan’s Economy”:
I have been looking into the claim recently made by any number of internet sites (for example, here’s one of the many hundreds, if you insist on a link) that the Federal Reserve made $7.77 trillion in secret loans to banks. The claim is outrageously inaccurate, as I explain below.
One of the startling things about consumption behavior is that, despite the burst of spending surrounding the holiday season, per capita consumption in 2011Q3 has only re-attained the levels of 2008Q3. Various explanations have been forwarded, ranging from the failure of Keynesian economics [0], to the decline in income prospects or higher income uncertainty, or to the decline in observed net worth [1] (deleveraging, in certain interpretations).
The U.S. economy experienced disappointingly weak growth in the third quarter. Data coming in during the last week suggest that the fourth quarter is starting out a little better. But it doesn’t look to me as much better as some accounts in the financial press might lead you to believe.
Some good news, but it all has to be put in perspective. As Mark Thoma points out, 120,000 jobs is about what is needed to keep unemployment from rising. In addition, the drop in the unemployment rate was driven largely by the drop in the participation rate, not the rise in employed. That’s going to be greater relevance if the extension of unemployment benefits is further blocked (in other words, there are offsetting employment effects from UI, as discussed in this rejoinder to Mulligan). More discussion at Izzo/WSJ RTE. I’m going to focus on data from the establishment survey.
Back in November of last year, when Jeff Frieden and I were putting the finishing touches on Lost Decades, we wrote:
Many countries with foreign debts in their own currency reduce their real debt burden by allowing their currency to drop in value, so that foreigners get repaid in less-valuable currency. But Greece and the other PIIGS cannot pursue this option on their own, for they share the euro with other countries, including some of the countries to which they owe money. Given this dynamic, investors and others worried that the European Central Bank would be forced to allow euro-zone inflation to rise — and perhaps even to allow the euro to depreciate — in order to alleviate some of the pain and suffering caused by its members’ debts.