The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.2% annual rate in the fourh quarter. That’s two quarters in a row now of above average growth. Given recent experience, that sounds pretty good.
Author Archives: James_Hamilton
Econbrowser now on WordPress
We have migrated our blog-management system over to WordPress, which will give Econbrowser a slightly different look and help us keep up better with improving technology. For example, by clicking on the appropriate icon that you’ll now find at the end of each post, you can instantly communicate anything you find of interest through other social media such as Facebook and Twitter. Please let us know if you have trouble with any old links, encounter any problems with the new system or have other suggestions.
Thanks to my tech-savvy daughter for helping us to make the switch. You can learn about her company at AdditiveAnalytics.com.
Changes coming for Econbrowser
We will be making some exciting changes to Econbrowser, moving to a new system for managing posts and comments. In preparation for the transition, we have temporarily closed all comments, and at some point during this weekend the complete site may be unavailable. We hope to have a new and better system completely functioning by the end of the weekend, and apologize for the temporary inconvenience.
On R-squared and economic prediction
Recently I’ve heard a number of otherwise intelligent people assess an economic hypothesis based on the R2 of an estimated regression. I’d like to point out why that can often be very misleading.
Links for 2014-01-19
Quick links to a few items I found of interest.
European monetary policy and the yield curve
From the Economist last week:
Since the financial crisis the European Central Bank (ECB) has ploughed a solitary course, reflecting its unique status as a monetary authority without a state. While other big central banks, notably America’s Federal Reserve, adopted quantitative easing– buying government bonds by creating money– to stimulate recovery, the ECB relied mainly on lowering interest rates and providing unlimited liquidity to banks on longer terms and against worse collateral. But as the Fed phases out its asset-buying programme in 2014, it may be the ECB’s turn to become unorthodox.
By one measure, the ECB may already be there.
Predictions for the New Year
From Tim Duy:
Pencil in somewhat stronger growth in 2014. Pencil in a steady reduction in the pace of asset purchases until the program winds down at the end of the year. Pencil in an extended period of low rates. But also recognize that the tide of monetary policy is now receding– albeit ever so slightly– with the Fed’s first step of ending the asset purchase program.
And from the invaluable Bill McBride: Ten questions for 2014.
A lack of ethics
David Kocieniewski of the New York Times is guilty of some outrageously bad journalism in the form of a groundless ad hominem attack on the reputation of two professors for the sole purpose of reinforcing the prejudices of his misinformed readers.
All quiet on the southern front
After a wild ride in 2011-2012, interest rates have settled down on European sovereign debt. For now.
U.S. tight oil production surging
The U.S. Energy Information Administration last week issued an early release of its Annual Energy Outlook 2014, which shows substantially more optimism about near-term U.S. crude oil production compared to the AEO 2013 assessment completed just eight months ago.