Here are some of the most ridiculous (and tragic) events of 2025, in economic or economic policy terms.
The Year in Review, 2025: I wanted lower prices, and all I got is this lousy hole in the ground
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Author Archives: Menzie Chinn
Guest Contribution: “Why didn’t Trump’s tariffs crash the economy in 2025?”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version was published in The Guardian and in Project Syndicate.
The PRC’s Intimidation Campaign
Chinese forces are conducting a massive military exercise in the areas surrounding Taiwan — a major economic power and supplier of semiconductor chips essential to the world (and US) economy (true in 2022, true today).
The Heritage Foundation and the Economics Implosion Foretold
Anybody who read “Trade”, Chapter 26 of Project 2025, could have foreseen the split and eventual purge of the Heritage Foundation, at least on the economic policy dimension (not that we knew which side would get purged). To say the chapter is schizophrenic is an understatement of the highest order. Peter Navarro wrote “The case for fair trade” while Kent Lassman wrote “The case for free trade”.
Corporate Profit Peaks and Business Cycle Peaks
Unsurprisingly, the former leads the latter, but the lag is (highly) variable.
2025Q3 4.3% q/q AR Growth in Context
GDP growth of 4.3% far exceeded the 3.3% consensus forecast. However, as a survivor of the 2001 “is it or not” recession debate*, I think it useful to consider the revisions that occur to GDP growth. Here’s a picture of levels of GDP for 2001, according to different vintages.
EJ Antoni: “The truth about the Heritage Foundation’s economic principles”
EJ Antoni writes a letter to WaPo editors:
“that the Heritage Foundation has become a protectionist bivouac. Au contraire, Heritage has been, is, and will continue to be a bastion of free-market conservatism.”
A Holiday Memo: NBER BCDC and Alternative Indicators
With a surprising outcome in GDP [Hamilton/Econbrowser] [Chinn/Econbrowser], recall that other indicators are relevant, particularly given the record of GDP revisions over time.
More on the GDP Release: Compare against “Core GDP” and GDO
Following up on Jim’s post yesterday, here are some additional thoughts on the “initial” (consolidated advance and 2nd) release: (1) GDP far exceeds nowcasts, (2) potentially more momentum-relevant “core GDP” advances strongly, but much less so than GDP, and (3) alternative estimates of economic activity like GDO suggest slower growth.
Fed Governor/CEA Chair (on leave) Miran: “Fed Risks Recession Without More Interest Rate Cuts”
From Bloomberg: