From Bloomberg:
The biggest Keynesian stimulus in U.S. history was a bust.
Incredibly, some Keynesians who supported Barack Obama’s $862 billion stimulus now claim it fell short of their goals not because the idea was flawed, but because the spending package was too small.
The recent trade release for June sparked some consternation, as it indicated 2009Q2 2010Q2 growth, conditional on data already released, would be lower. But there was also some unhappiness as it was taken by some to mark the return of the spendthrift consumer.[0] Yet, everywhere I see discussion of how consumption is lackluster, because households are deleveraging and beset by uncertainty. [1] These two narratives clash. Which one is right?
Is There Enough Money in the World — and At What Cost?
From the abstract of a paper coauthored with John Kitchen:
This paper examines the potential role for foreign official holdings of U.S. Treasury securities and the associated implications for Treasury security interest rates, international portfolio allocations, net international income flows, and the U.S. net international debt position, using a baseline outlook of current and projected U.S. budget deficits and growing debt. …
Or, what if the Accelerationist hypothesis doesn’t hold. I’m sure this question will drive some apoplectic — but I think it a reasonable question. First, let’s look at the empirical evidence on what happens to inflation in the wake of persistent large output gaps. Fortuitously, Andre Meier has just written on this subject, in Still Minding the Gap:
That’s the title of a new FRBSF Economic Letter. From Future Recession Risks, by Travis Berge and Oscar Jorda:
An unstable economic environment has rekindled talk of a double-dip recession. The Conference Board’s Leading Economic Index provides data for predicting the probability of a recession but is limited by the weight assigned to its indicators and the varying efficacy of those indicators over different time horizons. Statistical experiments with LEI data can mitigate these limitations and suggest that a recessionary relapse is a significant possibility sometime in the next two years.
From NYT, a quote of researcher Jason Box:
Petermann [glacier] is a sleeping giant that is slowly awakening. Removing flow resistance leads to flow acceleration… The coincidence of this area loss and a 30 square kilometer loss in 2008 with abnormal warmth this year, the setting of increasing sea surface temperatures and sea ice decline are all part of a climate warming pattern.
The employment situation July release indicated a decrease in overall payroll employment. Does this outcome indicate a sputtering* economy
For a while, contagion had dropped off the (research) map. But it’s now back (thanks to Greece et al!), in both research and policy arenas. A new symposium published in Pacific Economic Review covers the topic.