- NY Fed economist Erkko Etula finds that he can predict oil prices using the volume of broker-dealer financial assets.
- Washington University Professor James Morley and separately Kansas City Fed economist Todd Clark haven’t given up on the Great Moderation.
- My colleague Eli Berman discusses his book Radical, Religious, and Violent: The New Economics of Terrorism
- Fannie Mae and Freddie Mac may seek an increase to their $400 billion federal lifeline before the end of the year.
- Billy Hallowell puts together a blog carnival on Facing Up to the Nation’s Finances.
- Berkeley Professor Petr HoYava proposes a new theory of gravity.
Category Archives: deficits
Deficit links
Some quick excerpts of what others are saying.
CBO’s Assessment of ARRA’s Impact on Q3 Output and Employment
From CBO’s just released Estimated Impact of the American Recovery and Reinvestment Act on Employment and Economic Output as of September 2009
:
…Economic
output and employment in the spring and summer
of 2009 were lower than CBO had projected at the
beginning of the year. But in CBO’s judgment, that
outcome reflects greater-than-projected weakness in the
underlying economy rather than lower-than-expected
effects of ARRA.
In other words, the continued deterioration of the economy through the first few months after the passage of ARRA was not due to the stimulus package; rather underlying conditions had deteriorated, and the economy would have been in a worse state in the absence of the package. This is similar to the points I made here: [0] [1] [2]
Yes the future deficits are worrisome
The National Saving Identity: Private Saving, Household Saving, and Rebalancing
The National Saving Identity states:
CA ≡ (T-G) + (S-I)
Where CA is the current account, (T-G) is the consolidated government budget balance, and (S-I) is the private sector saving-investment balance. Figure 1 depicts the profound shifts that have occurred in these components (normalized by nominal GDP).
We Should’a Run Smaller Deficits
From today’s chapters 3 and 4 of the IMF World Economic Outlook, released today. From Chapter 4:
“…the results based on the small-scale regressions suggest that economies with larger current account deficits, rising inflation, and a deteriorating fiscal balance before a crisis experienced significantly larger output losses [from financial crises].
The Cyclically Adjusted Budget Balance
My article with Jeffry Frieden and the decomposition of the 2001-07 change in the deficit discussed in The Lasting Legacy of the Bush Tax Cuts inspired lots of vigorous debate regarding the role of the Bush deficits in the current crisis. Here is the CBO‘s take on the cyclically adjusted budget balance:
The Lasting Legacy of the Bush Tax Cuts
From The 2009 Budget Deficit: How did we get here? by John Irons, Kathryn Edwards, and Anna Turner:
This Issue Brief examines the details and causes of the current budget deficit and the role the current recession has played. The years between 2001 and 2007 saw a large deterioration in the budget balance, which was driven chiefly by legislated policy changes. The Bush-era tax cuts are the largest contributors to this period of policy-induced increases to the federal budget deficit. . . .
$9 trillion– what, me worry?
Paul Krugman may not be that concerned by the Obama administration’s new projection that the unified federal budget deficits will sum to $9 trillion dollars over the next 10 years. But I am.
Paying for design flaws
Updates on what this is going to cost you and me.