The latest auto and employment numbers paint a picture of an economic recovery that remains tepid and potentially fragile.
Author Archives: James_Hamilton
Home prices stabilized, but…
The S&P/Case-Shiller home price indices registered another month of increase in July. That’s a critical bit of favorable news, since continued declines in home prices would mean further increases in default rates and new stresses on financial institutions.
Federal Reserve reverse repurchases
Here I offer some thoughts on Bloomberg’s account that the Fed has made inquiries with its dealers about the feasibility of a significant increase in the Fed’s reverse repo operations.
Links for 2009-09-25
Tim Duy worries that some FOMC members are overestimating the inflation risk.
Arnold Kling proposes a mackerel theory of value.
The discussion at Cato of monetary policy continues.
Economy improves but concerns remain
Last week we received positive readings for some key economic indicators. But I still see plenty to worry about.
Regulating compensation in the banking sector
I see a good case for this, but also some big things to worry about.
Scott Sumner on the Fed’s mistakes
The Cato Institute is hosting a discussion this month of the extent to which monetary policy may have contributed to our current economic problems. In the lead essay that appeared on Monday, Professor Scott Sumner of Bentley University suggested that the Fed erred in allowing nominal GDP to grow as slowly as it did.
My response
appeared this morning. I agree that faster growth of nominal GDP would have been a good thing, but argue that, particularly if you start the clock in the fall of 2008, the Fed lacked the tools to prevent a decline in nominal GDP.
Guest contribution from Michael Dueker on the economic recovery
Michael Dueker is Head Economist for North America at Russell Investments and a member of the Blue Chip forecasting panel. In February of 2008 he warned Econbrowser readers that it appeared unlikely that the economy was going to escape the slowdown without a recession. In December of 2008, he predicted in this forum that the recession would last until July or August of 2009, but that employment growth would not resume until March of 2010.
With that track record, we were very interested to learn the latest macroeconomic predictions stemming from Russell’s Business Cycle Index, subject to the disclaimer that the content
does not constitute investment advice or projections of the stock market or any specific investment.
Supply and demand for judicial services
I’ve been trying to understand changes over time in the California state budget, though the data are presented in a way that makes that extremely difficult to do. I did spend enough time to discover one component of the budget that seems to have grown at a pretty healthy pace if you look at the last decade as a whole.
Furloughed professors
The University of California may say I’m just taking a few days off. That’s not how I see it.