Jim noted recurrent delays in the long heralded recession in his Thursday post. Here are some additional reflections on where economic activity has been, and where it is heading, relying on additional data. GDPNow (which hit the mark for Q1 growth) indicates continued growth through Q2. S&P Global Market Insights (nee Macroeconomic Advisers) indicates a plateau has been reached. Final sales (i.e., GDP ex. inventories) suggests continued growth.
Guest Contribution: “Restructuring Debt of African Commodity-Exporters”
Today, we present a guest post 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. A shorter version appeared at Project Syndicate. I would like to thank Sohaib Nasim for valuable assistance on this month’s commentary, as well my others this year.
The Godot recession
Everybody’s waiting for it, but it’s still not here yet.
Continue reading
Best Guess on the Recession Start Date
I was asked about my guess for the recession’s start. I said consensus was for 2nd or 3rd quarter this year, about 6 months from now. Then I wondered a bit. According to Miller (2019) (discussion here), the highest AUROC at 6 month horizon is the 5 year-Fed Funds rate spread. What does this spread indicate?
On Illiteracy
Reader JohnH writes about the discourse on Econbrowser:
Amazing the Krugman’s minimalist treatment of inequality far exceeds what I see mentioned here!
Dollar Value and the NIIP
Larger and larger gross cross-border holdings lead to bigger swings in the NIIP to GDP ratio.
Assessing the Cross-Taiwan-Straits Military Balance
400 Harpoon missiles to Taiwan is a good development. But clearly more is going to be necessary. A leaked document recounted in WaPo assesses the current military situation.
Plain Vanilla Term Spread Recession Probabilities
Anxiety provoking graphs generated while prepping for lecture.
So You Want to Slow Down Debt Accumulation …(while exempting Social Security and Tax Increases)
Center for a Responsible Federal Budget (CRFB) has an app for you to try it out, here.
CDS’s on One Year Treasurys
Phillips/Krupa at GS note exhaustion of emergency measures to avoid the debt ceiling could arrive earlier than expected. Insurance costs have risen to above 2011 levels.