Or things got a lot worse in 2008Q4 than we thought
The 2011Q2 advance release and revised estimates [0] contained many unpleasant surprises (see Jim’s assessment; also [CR1] and [CR2] [John Taylor] [Izzo/WSJ RTE]). The below consensus growth rate, and downward revision in Q1 growth, have been discussed elsewhere. I want to focus on the implications of the revisions to the data going back to 2003 (with particular emphasis on data back to 2007).
A picture says a thousand words. From the NYT today:
From a paper (Ungated/Scribed version here) by Shang-Jin Wei and Qingyuan Du:
China and several other economies in Asia are experiencing an increasingly more severe relative
surplus of men in the pre-marital age cohort. While the existing literature on the sex ratio has examined
its social impact such as crime, we aim to explore neglected implications of the sex ratio imbalance for
the real exchange rate. …
An Historical Analogy applied to today’s debt ceiling crisis, with apologies to Barbara Tuchman
I thought it of interest to see the evolution of Federal debt held by the public, and exactly what Administrations were the most spendthrift.
I keep on hearing we have a spending problem, but no revenue problem, from you know whom. I decided to appeal to actual data. Below is a time series plot of Federal current expenditures and tax receipts plus contributions to Federal social programs, as a share of GDP, over the 1967Q1-2011Q1 period. The data are based upon the data definitions in the BEA’s national income and product accounts (NIPA), as of June 2011. Outlays are declining, and as of 2011Q1 are at 0.25, which exceeds the previous peak, during the Reagan era, at 0.241 (1982Q4). Federal tax receipts plus social program contributions are at 0.158.
With some implications for the debate over assessing fiscal and monetary policies
Reader Brian writes:
DSGE’s aren’t the answer to everything, but I still find the microfoundations, careful treatment of expectations, etc. still attractive and, in my opinion, the best we have at the moment.
With an application to accurately counting stimulus effects, for the benefit of the numerically challenged
Here I try to explain why dividing a number at a point in time by a cumulative number does not make sense (Warning: some understanding of calculus helpful). Reader Manfred defends the Weekly Standard’s calculation of dividing net jobs created at an instant in time by cumulative spending to obtain a dollars/job figure. Specifically:
Or, on reading those who can do math, and those who can’t (i.e., yet more from Heritage)
Or lack thereof
Reports indicate that one of the reasons the “grand bargain” failed was the refusal of one party to accede to an increase in tax rates on households with AGI above $250,000. [1]. I can understand this reluctance, given that the share of total income going to the top 5% of households fell from 38.7% to 36.5%, going from 2007 to 2008 (just ignore the increase of 17.6 percentage points in the previous 30 years). Below is an updated graph from our forthcoming book Lost Decades by myself and Jeffry Frieden, illustrating the grievous harm that these households have endured.