In other words, the sugar high fades. Brad Setser has noted how weak nonresidential fixed investment has been, despite the TCJA. It looks worse when looking at net — rather than gross — investment.
Author Archives: Menzie Chinn
Recession Probabilities, September-October 2020
Plain vanilla 10yr-3mo probit yields 37% probability of recession in October next year. Adjusting the spread by the 10 year term premium estimate (Kim-Wright) implies only a 6.5% probability in September (vs. 46.4% plain vanilla). Augmenting the term spread with the 10 year term premium implies a 42.2% probability for September…
Deceleration
As noted by Jim. Over the last week, we’ve received new readings on employment, income, sales, and monthly GDP:
Real House Prices Decline
Case-Shiller indices came out today. August prices for the 20 city index declined m/m, and Zillow’s forecast for the CS 20 city index in September was for another decline. This is shown in Figure 1:
Exactly How Much Does the Mainstream Literature Ignore Demographics?
Reader Steven Kopits writes about the economics profession:
MMT in (Relatively) Plain English
Guest Contribution: “Weaponization of the Dollar May Backfire”
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 appeared in Project Syndicate.
Growth Deceleration?
The nowcasts indicate slowdown.
Real Home Prices
Case-Shiller August prices come out next week. For now, we have Zillow prices through September, and Zillow forecast. Here are the CPI deflated prices.
Where Did All the Stimulus Go?
By April 2018, the Tax Cut and Jobs Act and the Bipartisan Budget Act of 2018 had been put into law. The CBO projected a bump in GDP growth, relative to counterfactual. (According to the CBO, the TCJA alone should have pushed output 0.6 percentage points above baseline in 2019.) However, the actual record has been fairly plodding, as shown in the below figure.