Forecasted GDP rises yet again, with considerable dispersion.
Category Archives: Uncategorized
A Literature Review on Economic Policy Response to Covid-19
An excellent review of empirical findings regarding the various provisions is contained in this FEDS Notes article, by Elena Falcettoni, and Vegard Nygaard.
The COVID-19 pandemic has kept economists busy analyzing many aspects of economic side of the coronavirus impact. This note is meant to present an overview of what economists have analyzed regarding the implications of two of the main components of the CARES Act that affect individuals: the increased UI benefits and the stimulus checks. We present the findings from the literature on these two policies with an eye on potential future governmental interventions.
Taken together, these two components have been effective at providing stimulus and lowering poverty. In the aggregate, Kaplan et al. (2020) (PDF) find that the initial UI benefits and stimulus payments boosted aggregate consumption by 2 percentage points, while Bayer et al. (2020) show that the CARES transfers reduced the output loss due to the pandemic by up to 5 percentage points.
Complete note here.
Update to the Comment Moderation Policy
Comments should be directed to the topic of the original post, and commenters should restrict themselves to civil discussion of the substance of comments. In addition, racist, misogynistic comments and use of profanity will not be permitted.
Effective immediately, failure to adhere to this policy will constitute cause for editorial action.
Per James Hamilton and Menzie Chinn
On the Consequences of Inflammatory Language Use on Social Media
Remember assertions that the use of the term “China Virus” in the stead of SARS-CoV-2 or Covid-19 was not only appropriate, but desirable? From Time:
Since the start of the pandemic last spring, Asian Americans have faced racist violence at a much higher rate than previous years. The NYPD reported that hate crimes motivated by anti-Asian sentiment jumped 1,900% in New York City in 2020. Stop AAPI Hate, a reporting database created at the beginning of the pandemic as a response to the increase in racial violence, received 2,808 reports of anti-Asian discrimination between March 19 and December 31, 2020. The violence has continued into 2021, and President Joe Biden signed an executive order denouncing anti-Asian discrimination shortly after taking office in January. While anti-Asian violence has taken place nationwide and particularly in major cities, the uptick in attacks in 2021 has been particularly focused in the Bay Area, especially in San Francisco and Oakland’s Chinatowns.
Well, Steven Kopits, the Asian-American community of America thanks you.
See also WaPo.
An Alternative Proxy Measure for Slack
In this blog, we’ve recently covered production function/bean counting, inverted Phillips curve, and statistical techniques for estimating the level of potential GDP relative to actual GDP — that is the extent of economic slack. Struyven/Hatzius/Bhushan at Goldman Sachs estimate slack at several percentage points greater than that implied by the CBO measure.
Do Not Add Chain Weighted Quantities, Illustrated
I’ve discussed in an earlier post the fact that the sum of chain weighted quantities does not usually sum to the corresponding total chain weighted quantity. Here is a more recent example, that demonstrates the dramatic shifts in relative prices of consumption types.
Some Economic and Statistical Terms (Mis)Used in This Blog’s Comments Section
These are all terms that have been misused in comments on this blog (all by one person!). For purposes of facilitating coherent discussion, I provide some short definitions.
Musings on: “What the he** do you teach your students, Menzie”
Steven Kopits argues about the relevance of market imperfections, to wit:
What the hell do you teach your students, Menzie? “Well, you know, here’s the theory, but let’s not get carried away with it in real life.”? Why would anyone want to be an economist when the bulk of your views seem to revolve around exceptions to the rule, about presumptions that you are smarter than the market or that markets don’t work?
Business Cycle Indicators as of January 26th
New information coming out on Friday, employment in a week and a half. For now:
Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for January as of 1/26 (blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP in Ch.2012$ (pink), all log normalized to 2020M02=0. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (1/4/2021 release), NBER, and author’s calculations.
Farm Income during the Trade War
Farm income rose – but income from selling farm products fell. Were it not for direct farm support, income would’ve fallen.