The CBO and the Congressional Joint Committee on Taxation have just released its scoring of “budgetary effects of the reconciliation proposal, in combination with the effects of H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as passed by the Senate”. The link to the document is here. The CBO/JCT estimated reduction in the deficit over FY2010-2019 is $119 billion. A comparison of the impact on the budget balance against previous reconciliation measures is presented in Figure 1, below.
Author Archives: Menzie Chinn
Obama after One Year: Crisis, Response, Recovery
A couple days ago, I presented my views on the policy response to the financial crisis and the Great Recession in a UW Center for World Affairs and the Global Economy / UW CIBER / MITA and ICE sponsored event. The power point slides are here (big file, 1.3MB). I took the latitude as the invited speaker to expand the topic from the Obama Administration’s measures to encompass the response to the crisis and recession from both the fiscal and monetary policy authorities.
What Do Business Economists Think the ARRA Accomplished?
Or, counterfactuals, yet again.
Or, rejoinder to Casey Mulligan, Joseph Lawler, david, tim kemper and others.
From the WSJ March survey survey of forecasters, the results indicate that instead of the 0.15% growth rate recorded in 09Q4 y/y growth, the growth rate would have been -0.93%. For 2010Q4 Q4/Q4 growth, they forecast 3% growth, and in the absence of the ARRA, they would have predicted 2.2% growth.
Update: the 2010-19 Impact of PPACA on Budget Balance
And a quantitative comparison to previous reconciliation measures.
The CBO and the Congressional Joint Committee on Taxation (JCT) have updated cost estimates for H.R. 3590, the Patient Protection and Affordable Care Act (PPACA), as it was passed by the Senate on December 24, 2009. The figures are here. I’ve incorporated the new estimates into the bar chart first reported in this March 1st post.
Durable Goods and the Collapse of Global Trade
From a Dallas Fed Letter by Jian Wang:
Durable goods represent a moderate share of the economy in most industrial countries — in the U.S., for example, they accounted for 23.6 percent of real GDP in 2008. However, durable goods make up a large share of international trade. In the U.S., they accounted for more than 60 percent of trade in goods (excluding energy products) in 2008. The figure is 70 percent on average for the OECD countries, according to several studies.
Whither the Yuan?
Political pressure seems to be mounting for yuan appreciation. [0] Figure 1 depicts the stability in the USD/CNY nominal exchange rate over the past year.
Aspirin
Russ Roberts writes:
Menzie Chinn invokes the CBO “estimates” to argue against those who say the stimulus didn’t work. Did the stimulus help turn the economy around and create jobs? I’m skeptical on logical grounds but I confess that I do not have strong empirical evidence on my side.
But those who defend the stimulus have no empirical support either…
Speaking of Unfunded Liabilities: Medicare Part D
The Financial Report of the United States Government, 2009 was released last week. Perusing the tables, one encounters the gigantic new, unfunded entitlement enacted in 2003, namely Medicare Part D.
The Global Financial Crisis: Explaining Cross-Country Differences in the Output Impact
From “The Global Financial Crisis: Explaining Cross-Country Differences in the Output Impact,” IMF WP 09/280, by Pelin Berkmen, Gaston Gelos, Robert Rennhack, and James P. Walsh:
We provide one of the first attempts at explaining the differences in the crisis impact across
developing countries and emerging markets. Using cross-country regressions to explain the
factors driving growth forecast revisions after the eruption of the global crisis, we find that a
small set of variables explain a large share of the variation in growth revisions. …
Who Are You Going to Believe?
Professor Casey Mulligan says (and yesterday unequivocally reiterates) the stimulus program would not stimulate the economy. The nonpartisan CBO says otherwise:
…CBO estimates that in the fourth quarter of calendar year 2009, ARRA’s policies:
- Raised real GDP by between 1.5 percent and
3.5 percent,- Lowered the unemployment rate by between 0.5 percentage
points and 1.1 percentage points,- Increased the number of people employed by between
1.0 million and 2.1 million, and- Increased the number of full-time-equivalent jobs by
1.4 million to 3.0 million compared with what those
amounts would have been otherwise (see Table 1).