Or, who else misunderstood the nature of the financial crisis and recession
As I was reviewing material to use in teaching how new classical models relate to the popular aggregate demand/aggregate supply models [0] used in policy analysis, I ran into this forecast in the real business cycle vein from October 26, 2008.
Barring a nuclear war or other violent national disaster, employment will not drop below 134,000,000 and real GDP will not drop below $11 trillion.
Markups, Competitiveness, and the Bush Tax Cuts and Deficits
The Administration released the annual Economic Report of the President on Friday. Many topics were covered, but here I’ll remark upon a few issues, motivated by several graphs.
Here is a summary graph of the state of the US motor vehicle industry, as indicated in the last GDP release.
By Xingwang Qian and Andreas Steiner
Today, we’re fortunate to have Xingwang Qian, Assistant Professor of Economics at SUNY Buffalo State and Andreas Steiner, Assistant Professor at University of Osnabrück
,
as Guest Contributors.
And forecasts in general
The Administration released its budget proposal yesterday. Others have dissected the implications [1] [2] [3]. Here I want to focus on the Administration forecast.
The forecasts, and comparisons against alternatives, are presented in Table 2-2 of the Analytical Perspectives of the Budget.
Deficit Hypocrisy Watch
The WSJ editorial page last Thursday remarked upon:
“…the worst fiscal record of any President in modern times…”
Last week I had the opportunity to attend an IMF conference (organized by Olivier Blanchard, Krishna Srinivasan, and Hamid Faruqee) focusing on the critical issue of assessing the sources of the pre-crisis imbalances in systemically key countries. The proceedings also had a forward looking component, highlighting the difficulties of determining when external imbalances are problematic. The conference proceedings are here.
Actually, not even the footnotes — just the text accompanying data releases (in this case it’s the second paragraph, in a box, of the release). Although, I must admit, this long rant by FoxForum contributing writer Noel Sheppard just made me laugh and laugh and laugh, thus making an otherwise bleak Monday brighter. From “CNN’s Crowley Does Two Segments on Jobs Numbers Without Mentioning Plummeting Participation Rate”
Employment growth accelerates along several dimensions: nonfarm payroll, an alternative measure of nonfarm payroll, private employment, hours, and civilian employment (report here). However, JEC vice chairman Brady (JEC-Republicans) states in a press release: “Job Numbers Mask Underlying Job Weakness.”
Several observers have noted that exports have increased substantially since the President made his commitment to doubling exports. [1] The most recent GDP release confirms improvement in the net exports to GDP ratio (ex. oil imports) and real exports, and a BEA release from a month and a half ago confirms a rebound in manufacturing value added.