Guest Contribution: “What can exports tell us about the economy?”

Today, we are fortunate to have Jay C. Shambaugh of the McDonough School of Business at Georgetown University as a guest contributor.

There has been considerable debate lately about why the U.S. economy continues to struggle. Some — notably economists on the right and some Federal Reserve Bank Presidents — have argued that concerns about future taxes and regulation are preventing American businesses from investing and hiring. Other economists have argued that we have inadequate aggregate demand in the economy and that explains slow GDP and employment growth — not fear of future government policy.

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“An Examination of U.S. Dollar Declines”

That’s the title of a blogpost by Roosevelt Bowman and Jan J.J. Groen at the New York Fed. The write:

…we examine the role of market uncertainty and currency risk premia in the pace and size of episodes of dollar weakness since 1991. We find that the most recent bout of U.S. dollar declines largely can be attributed to the recovery in global economic activity from the most recent recession.

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CBO on Income Inequality, and Interpreting OWS

Tabulating Inequality Trends

The CBO released a report on income inequality earlier this week. This means that the “inequality deniers” are having a more difficult time arguing that widening spreads an wages, compensation, or overall income are merely statistical artifacts dreamt up by liberals (see e.g. here). What is of most interest is (i) real after-tax income of the top 1 percentile has risen about 275%, and (ii) the pre-transfers/pre-tax income share of the top 1% has increased most profoundly.

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Could be worse

The Bureau of Economic Analysis reported today that U.S. real GDP grew at an annual rate of 2.5% during the third quarter of 2011. That’s below the average postwar growth rate of 3.2% and well below the 4.3% growth for an average expansion quarter. Even so, it’s better than any of the previous 3 quarters, and better than many analysts had been expecting when the quarter began in July.

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