Several of the five key indicators referenced by the NBER’s Business Cycle Dating Committee are decelerating, as shown in Figure 1.
Deviations vs. Shortfalls
The Fed’s new framework, as described by Chairman Powell, mentions “shortfalls” (particularly in employment), instead of deviations of the natural rate. The output analog of this shift is moving from the deviation of output from potential (i.e., output gap) to an output slack measure. If we interpret this as requiring a focus on a Friedman-esque plucking model of maximal output, rather than potential GDP as described in most textbooks, what does this mean for where we are right now? I’d say for the short run, we are still in for a world of pain, economically speaking…
Sweden and Norway, Q2 GDP Growth
Reader Bruce Hall brings our attention to the performance of Swedish GDP, given the pandemic response they have adopted – comparing against UK, Germany, France and UK. My guess is that he wanted to show the tradeoff between lives lost and growth. Personally, I think the Sweden vs. next-door-neighbor Norway comparison is at least as interesting.
CDC Covid-19 Fatality Count and Excess Deaths
CDC has released data through 15 August as of today.
Twenty Years of GDP, and Other Random Graphs
As I was prepping slides for my macro policy course, I generated this graph:
Recovery Forecasts and Nowcasts
Guest Contribution: “The Significance of Gold’s Record $2,000 Price”
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 in Project Syndicate.
Guest Contribution: “The Fiscal Effects of the Covid-19 Pandemic on Cities: An Initial Assessment”
Today we are fortunate to present a contribution written by Andrew Reschovsky, Professor Emeritus of Public Affairs and Applied Economics at the University of Wisconsin-Madison.
No V for Thee (i.e., we’re not going to get 49% SAAR)
From Reuters:
“I think the economy is on a self-sustaining recovery and it’s a V-shaped recovery.”
Contemplating the (No Deal) Cliff
The recovery package cliff, that is. DeutscheBank research outlines what they think is likely (baseline) and what a no-deal means for disposable personal income.