Several new items regarding assessing recoveries, here and abroad; and the prospects for rebalancing.
Author Archives: Menzie Chinn
A Little Less Unscorable
In a previous post, I noted that Governor Romney’s budget plan was essentially unscorable (as he himself stated [0]) because he was so vague on the tax expenditures he was going to eliminate. That fog of obfuscation lifted slightly yesterday, with Governor Romney’s not-for-public attribution comments to donors. From Sara Murray, in the WSJ:
The current recovery in historical context
Or why Ed Lazear should have heeded R&R a bit more.
From “Credit: A Starring Role in the Downturn,” by Òscar Jordà, based on an examination of 14 advanced economies over 140 years:
We are unlikely to learn how the United States will recover from the Great Recession by examining other post-World War II downturns. In the United States, the past six decades have completely lacked another financial event like the one experienced from 2007 to 2009. …
Some Implications of the Trade Release
So-so news, and how we can sustain net export growth
From BEA/Census:
The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of
Commerce, announced today that total February exports of $181.2 billion and imports of $227.2
billion resulted in a goods and services deficit of $46.0 billion, down from $52.5 billion in
January, revised. February exports were $0.2 billion more than January exports of $180.9 billion.
February imports were $6.3 billion less than January imports of $233.4 billion.
Professor Lazear Doubles Down on 1980/82 = 2007
Professor Lazear on CNBC yesterday reiterates and unhedges his thesis that the causes of the 1980 and 1982 recessions are essentially the same as that of the 2007-09 recession.
The Recovery Compared
Following up on my post The Recovery According to Ed “We are not in a recession” Lazear
, reader Rick Stryker writes:
Lazear’s points are clear: 1) Real growth has been sub-par in this recovery compared to previous recoveries…
This point is clearly falsified by the graphs from the St. Louis Fed:
NOAA: Warmest March on Record
And the first three months of 2012 were also the warmest first quarter in the contiguous United States, according to NOAA.
The Recovery According to Ed “We are not in a recession” Lazear
In Tuesday’s WSJ, Edward Lazear argued that we are now experiencing the “Worst Economic Recovery in History”. Before dissecting this remarkable document, it would behoove the reader to recall that while he was Chair of George W. Bush’s Council of Economic Advisers, he stated unequivocally in May 2008 (also in the pages of the WSJ):
Lessons from the Crisis for Teaching Macro
The NY Times “Room for Debate” recently had a forum on “Rethinking How We Teach Economics”, with contributions by Blinder, Taleb and Skidelsky, among others. In my contribution, I focused on the importance of asymmetric information and self-reinforcing feedback loops:
Okun’s Law, the Jobless Recovery, and Unexpectedly Fast Net Job Creation
I have found it somewhat surprising that analysts have worried about how employment growth has recently outpaced GDP, according to Okun’s Law, while others have bemoaned the slow pace of employment growth [0] [1]. Underpinning these discussions is a view that there is instability in the relationship. [2] The first thing to recall is that there are several versions of Okun’s Law. Some are expressed in levels, some in deviations from natural levels (gaps), and some in growth rates. From Figure 1, it does appear that private employment growth has been above expected, after being below expected.