One argument for tightening monetary policy is derived from the argument the Fed needs to raise rates to close a “confidence gap”. Instead of psycho-analyzing the markets, I think it better to focus on data.
Category Archives: recession
Recession Watch, August 2016 Updated
New data came out on industrial production and monthly GDP over the last couple days. That allows us to update the picture of key indicators that the NBER Business Cycle Dating Committee focuses on continues to paint an ambiguous picture.
Recession Watch, August 2016
The implications of the tradables sector, the dollar, and Fed policy.
UK Yield Curve Flattening: “Nothing to do with Brexit”?
Heckuva Job, Nigel!
UK PMI collapses. Term spread moves toward inversion.
Decomposing Changes in Term Spreads around the World
The Real Term Spread and Recessions
There’s an argument being made that because of the zero lower bound, the standard nominal term spread is unlikely to be as accurate a predictor of recessions as it has in the past. A prominent example of this view circulating now is that forwarded by Deutsche Bank’s Dominic Konstam; his analysis indicates a 60% likelihood of recession (WSJ RTE), in contrast to the estimates obtained from the standard model, ranging in the low teens (see for example this post).
Economic consequences of Brexit
Here are my two pence on some of the consequences of Britain’s vote to leave the European Union.
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Guest Contribution: “Does the Economy Really Do Better Under Democratic Presidents?”
Today, we are pleased to present a guest column written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. This is an extended version of a column appearing at Project Syndicate.
Recession Risks: The View from Wall Street Economists
The Wall Street Journal‘s June survey of economists is out. Interestingly, no one’s mean forecast is for two quarters of negative growth in 2016Q2-Q3 (or even one quarter!), but the assigned probabilities of recession remain elevated.