Jim covered the salient aspects of the 2008Q4 advance release in an earlier post. A few additional points: (i) exports for sure are not adding to growth, (ii) the positive contribution from decreasing imports does not augur well for future growth, and (iii) nonresidential investment has now followed residential investment with vigor. But the key point is consumption is now collapsing at a rate comparable to the 1980 recession…
Category Archives: recession
Oh yes it’s a recession all right
The Bureau of Economic Analysis reported today that U.S. real GDP fell at a 3.8% annual rate in the fourth quarter of 2008.
Multipliers, again
From CBO Director Doug Elmendorf’s testimony yesterday, some numbers relevant to the ongoing debate over fiscal policy efficacy [1] [2]:
IMF: “World Growth Grinds to Virtual Halt…”
Well, that’s the IMF Survey title, describing the IMF’s World Economic Outlook.
Stimulus bill
House Democrats have unveiled their proposal for economic stimulus. Here’s mine.
I Hope They’re Right: The Forecast in the 2009 ERP
The Bush Administration’s last Economic Report of the President [large pdf] (Link updated 1/21/09 12:35pm Pacific) was released on Friday. From Chapter 1:
The Administration’s forecast calls for real GDP to continue to fall in the first half of 2009, with the major declines projected to be concentrated in the fourth quarter of 2008 and the first quarter of 2009. An active monetary policy and Treasury’s injection of assets into financial institutions are expected to ease financial stress and to lead to a rebound in the interest-sensitive sectors of the economy in the second half of 2009.
One of My Favorite Papers on Multipliers
Germane to some of the ongoing debates over fiscal policy effectiveness [1] [2]:
Fiscal policy multipliers are central to Keynesian macroeconomics. In this paper I explore a
possible microeconomic foundation for one fundamental theory of income determination, the
‘Keynesian cross’. My model deviates from a Walrasian equilibrium model only by the assumption
of imperfect competition in the goods market. I show that textbook fiscal policy multipliers arise as a
limiting case.
Industrial Production during Previous Post-War Recessions
Since Minneapolis Fed and others are posting various comparisons of employment and output during recessions (and pseudo-recessions — see the discussion at Spencer at Angry Bear), I thought I’d post an analogous picture of industrial production.
Signs of a thaw
Yes, I saw the discouraging headlines. But I also see signs of hope in last week’s economic news.
Estimated Impact of “American Recovery and Reinvestment Plan”
By way of Paul Krugman, here is the estimated impact on employment provided by C. Romer and J. Bernstein.