This is a corrected title of a mendacious (and typically statistically incompetent) article by Craig Eyermann in an Independent Institute blogpost (previously highlighted as Ironman of PoliticalCalculations). He writes:
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Econ 702 Exercise – The Neoclassical Model: GDP and Shocks
Consider the following model (from Garin, Lester and Sims):
r vs. g
Olivier Blanchard and Larry Summers had an interesting exchange about interest rates and secular stagnation, and target inflation rates today, at PIIE. Blanchard mentioned the evolution of r vs. g as a key issue in thinking about secular stagnation, and this spurred me to look at the data.
Recession 6 Months Away?
Following up on the proposition that the recession is seemingly always six months away (as noted in WSJ’s ‘Godot’ recession”), I thought it would be interesting to see if the market had been saying a similar thing. To wit, here’s the one year-6 month Treasury spread.
The “Godot” Recession?
From WSJ:
“It’s the ‘Godot’ recession,” said Ray Farris, chief economist at Credit Suisse. Mr. Farris found himself among a small minority of economists last fall who predicted the economy would narrowly skirt a downturn this year. Every six months, economists have predicted a recession six months later, he said. “By the middle of the year, people will still be expecting a recession in six months’ time.”
Expect More of This
House Representative Gooden’s recent comments discussed in LA Times:
Russia: Waiting for Inflation?
I found this paragraph from a Re:Russia article of interest:
January 2023 Russian GDP Growth is -3.2% y/y
Year-on-year 2022 is -2.1%.
Output: Where We’ve Been and Where We Are Relative to Potential
We have a 2nd release for GDP, and nowcasts for Q1. We also have GDP+ and a guess for GDO for Q4. This is the picture, taking CBO’s estimate of potential GDP.
If the Housing *Is* the Business Cycle, What Does this Picture Mean?
That’s what Ed Leamer noted back in 2007. Residential construction employment, spending, housing starts, new home sales, all normalized to 2021M11.