Consider the following model (from Garin, Lester and Sims):
Author Archives: Menzie Chinn
r vs. g
Olivier Blanchard and Larry Summers had an interesting exchange about interest rates and secular stagnation, and target inflation rates today, at PIIE. Blanchard mentioned the evolution of r vs. g as a key issue in thinking about secular stagnation, and this spurred me to look at the data.
Recession 6 Months Away?
Following up on the proposition that the recession is seemingly always six months away (as noted in WSJ’s ‘Godot’ recession”), I thought it would be interesting to see if the market had been saying a similar thing. To wit, here’s the one year-6 month Treasury spread.
The “Godot” Recession?
From WSJ:
“It’s the ‘Godot’ recession,” said Ray Farris, chief economist at Credit Suisse. Mr. Farris found himself among a small minority of economists last fall who predicted the economy would narrowly skirt a downturn this year. Every six months, economists have predicted a recession six months later, he said. “By the middle of the year, people will still be expecting a recession in six months’ time.”
Expect More of This
House Representative Gooden’s recent comments discussed in LA Times:
Russia: Waiting for Inflation?
I found this paragraph from a Re:Russia article of interest:
January 2023 Russian GDP Growth is -3.2% y/y
Year-on-year 2022 is -2.1%.
Output: Where We’ve Been and Where We Are Relative to Potential
We have a 2nd release for GDP, and nowcasts for Q1. We also have GDP+ and a guess for GDO for Q4. This is the picture, taking CBO’s estimate of potential GDP.
If the Housing *Is* the Business Cycle, What Does this Picture Mean?
That’s what Ed Leamer noted back in 2007. Residential construction employment, spending, housing starts, new home sales, all normalized to 2021M11.
Business Cycle Indicators as of March 1st
S&P Global (formerly Macroeconomic Advisers) released monthly GDP for January today, indicating a rebound in activity – 0.3% m/m growth. Adding this to a graph of key indicators followed by the NBER BCDC yields the following: