That’s the title of a paper coauthored by Matthieu Bussiere (Banque de France), Gong Cheng (Sciences Po), Noemie Lisack (European University Institute) and myself, in which we examine two key questions:
[F]irst, has the accumulation of reserves effectively protected countries during the 2008-09 financial crisis? And second, what explains the pattern of reserve accumulation observed during and after the crisis?
The Shoveling Must Continue
Bill Beach has retired, and the Heritage Foundation no longer “scores” budget plans. Yet there is still so much … stuff … out there to debunk. Without further ado, here are my top ten examples of delusion in 2013.
Updated, includes summary of an econometric analysis of impact of austerity in the UK
Prime Minister Chancellor of the Exchequer Osborne has lauded the recent UK growth numbers as validation for the policy of austerity [1] (recently relaxed, although he doesn’t mention that).
Despite the best efforts of some policymakers to reduce aggregate demand by way of austerity measures [0], there are glimmers of hope for more rapid growth.
Figure 1 shows private employment relative to trend implied by Governor Walker’s pledge of August 2013 to create 250,000 net new jobs; Figure 2 shows employment normalized to January 2011 for Wisconsin, as compared to Minnesota and the Nation.
Over the period of the Great Moderation, has inflation responded linearly to the output gap?
Assessing the importance of direct government expenditures on goods and services [Edits to clear up ambiguity in terminology for readers Salim and Jeff — MDC 12/18].
A cautionary tale for my undergraduate economics students
Reader Steven Kopits wonders why, in order to show the relative prominence of government spending, I don’t merely take the ratio of one real index to another real index. Specifically, he admonishes me:
I find this presentation confusing. … Is it not possible to present this data as a simple percent of GDP?
I happened to catch Americans for Prosperity‘s Tim Phillips talking about the ever growing government [1], in the context of the recent budget deal. Here’s what the actual data indicate:
Productivity outpaces real wages, deflated using the output deflator, or using the CPI.