Several people have asked me if the flattening yield curve is a warning of impending weak growth or even a recession. My answer is not yet. Here’s why.
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Author Archives: James_Hamilton
Is the economy overheating?
The Bureau of Labor Statistics announced yesterday that the unemployment rate was down to 3.9% in April. That’s nearly as low as it’s been any time in the last half century. Does that mean the U.S. economy faces some problems ahead?
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Podcast on econometrics, oil shocks, and monetary policy
I had an interesting discussion on a range of topics with David Beckworth which you can
listen to as a podcast from Macro Musings.
A little slower growth
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.3% annual rate in the first quarter. That’s a modest slowdown from the 3.1% average we saw over the previous 3 quarters. 3.1% is also the average growth rate for the U.S. economy over the last 70 years. But the Q1 reading is pretty much on par with the 2.2% average growth since the Great Recession ended in 2009.
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2018 Econbrowser NCAA tournament challenge
It’s that time of year again! By which I mean, the once-in-a-lifetime opportunity to enter the eleventh annual Econbrowser NCAA tournament challenge! All right, so last year you had a chance to enter the tenth annual challenge, which was kind of similar. But whether or not you tried it last year, here’s an all new roll of the dice to see how well you can predict the outcome of this year’s U.S. college men’s basketball tournament. If you want to participate, go to the Econbrowser group at ESPN, do some minor registering to create a free ESPN account if you haven’t used that site before, and fill in your bracket before Thursday at noon!
A skeptical view of the impact of the Fed’s balance sheet
That’s the title of a paper with David Greenlaw, Managing Director of Morgan Stanley, Ethan Harris, head of global economics research at Bank of America Merrill Lynch, and Kenneth West, professor of economics at the University of Wisconsin, which we presented at the U.S. Monetary Policy Forum annual conference in New York on Friday.
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The U.S. economy keeps growing
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.6% annual rate in the fourth quarter. That is better than the 2.2% we’ve seen on average since the Great Recession ended in 2009, though below the historical average growth rate for the U.S. economy of 3.1%.
Negative interest rates
A few years ago, most economic models presumed that interest rates were subject to a lower bound of zero. Why lend a dollar to someone who only promises to pay you back 99 cents, when you could just hold on to the dollar yourself? But we now have several years of experience from Sweden, Denmark, Switzerland, Japan, and the European Central Bank in which the central bank successfully induced negative interest rates in hopes of stimulating a greater level of spending on goods and services. We have enough data now to take a look at how much that seems to have accomplished, and update my earlier discussion of this topic.
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Steady economic growth continues
The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 3.0% annual rate in the third quarter. That is close to the long-term historical average of 3.1%, and better than the 2.1% we’ve seen on average since the Great Recession ended in 2009.
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Another event to study
One of the ways economists have tried to estimate the effects of the Fed’s program of large-scale asset purchases (LSAP) is using event studies of how the market responds in the thirty minutes following Fed statements of changes in the program. Yesterday’s announcement from the Federal Reserve that it is starting a gradual process of reducing its balance sheet gives us one new data point for such efforts.
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