A lot of what has happened to GDP growth over the past few quarters has, in a mechanical sense, depended upon developments in the external accounts. In this post, I examine whether mismeasurement of import prices might have induced mismeasurement of economic output. This idea was prompted by hearing a presentation of Nakamura and Steinsson a couple months ago. The abstract to “Lost in Transit: Product Replacement Bias and Pricing to Market”:
Author Archives: Menzie Chinn
Recession Dating: Some People Are Going to Be Surprised
The typical Econbrowser reader might not be surprised at the NBER decision — but some others will. From a May 2008 WSJ article:
“The data are pretty clear that we are not in a recession,” Council of Economic Advisers Chairman Edward Lazear told a meeting of editors and reporters from the Wall Street Journal and Dow Jones Newswires.
…
“I would be very surprised if the NBER, looking back at this period, would date this as a recession,” Mr. Lazear said. There are even indications that revised first-quarter estimates would be slightly stronger than 0.6%. “The optimists seem to have been closer to right on that than the pessimists,” he said.
Just to reiterate, that quote is from May 2008.
William Kristol on Economic Theory and Practice
I don’t usually read Bill Kristol’s column, but once in a while, my eyes get caught by a headline (that’s the difference between reading online and “on paper”), and I’ll check out what he has to say. The other day, I read his column “Admit we don’t know” on the current economic crisis that, while not in my mind “wrong”, seemed puzzling to me. Pay attention to the last paragraph (highlighted in bold).
Synchronized Recession, Synchronized Stimulus?
The OECD has just released its forecasts. This follows the recent updated IMF forecasts. Growth is evaporating the industrial countries. What is to be done?
Chinn and Collender on the Obama Stimulus Plan
I discussed current economic conditions and the prospects for the Obama stimulus plan on Kerri Miller’s “Midmorning” show on Minnesota Public Radio today. Capital Gains and Games‘ Stan Collender was also speaking. Here’s a link to the audio.
GDP Prospects: Mean Estimates Fall and Dispersion Increases
One of the points that all the panelists at last Thursday’s event sponsored by WAGE (“The Global Economic Crisis”) agreed on was how quickly the macroeconomic situation has deteriorated. I wanted to see if one could quantify the rapidity with which growth prospects have changed. Here is one perspective, showing the mean forecast from the October and November WSJ surveys of forecasters.
The Global Economic Crisis: Propagation to the Rest of the World
Last Thursday, I had the opportunity to participate in a panel on Global Economic Crisis: The Untold Stories, sponsored by the Center for World Affairs and the Global Economy (WAGE). I was tasked with surveying the impact on the economy outside the borders of the United States — in 20 minutes.
The Progress of the Financial Crisis in One Picture: Mortgages, Flight to Safety, Credit Lock
Markus Brunnermeier provides an excellent summary graph of the financial crisis, told in “spreads”.
Triple “Ut-Oh”: September Trade Release and the End of the Consumer of Last Resort
Brad Setser says “Ut-Oh”, beating me to the punch on the September trade release, which showed US exports plunging. It’s a post that Paul Krugman rightly expresses some angst upon reading. And now I’m going to add two more reasons to worry (not that I think Setser and Krugman aren’t aware of these points).
Real Retail Sales
Here’s a picture of 12-month percentage changes in real retail sales. Certainly unprecedented for the current series, not so much when including the previous (more volatile) discontinued series — although you do have to go back to 1980 to see a bigger 12-month drop.