On the one year anniversary of the passage of the ARRA, it seems appropriate to recap, not what the academics say, but what the business sector forecasters say about the impact of the stimulus package.
The new normal
Also included in Federal Reserve Chair Ben Bernanke’s statement to Congress last week were some guidelines for what we might expect Federal Reserve decisions and communications to look like as we make the gradual adjustment to more normal conditions.
The December Trade Release: Implications for GDP Growth, Rebalancing, Doubling Exports and the US-China Deficit
The December trade release surprised some observers in terms of the rise in imports. [0] I think there are some other interesting implications. First, the implied downward revision in GDP is minimal. Second, the drop was less pronounced in the ex-oil trade balance. Third, although real trade flows are rising from their troughs, they have not re-attained pre-Lehman levels. Fourth, the US-China goods trade balance continues to improve.
Bernanke on the Fed’s balance sheet
Federal Reserve Chair Ben Bernanke last week released a statement of how the Fed intends to manage its bloated balance sheet over the next few years. Here I offer my interpretation of what his plan involves.
Economic Report of the President, 2010
Fiscal Situation: A Cross-Country Perspective
Torsten Slok has a whole set of interesting pictures, two of which are particularly relevant in thinking about the US fiscal situation as compared to other advanced countries.
The Heritage Foundation Confuses Me
The Heritage Foundation critiques the CEA assessment of the stimulus. In WebMemo #2799, Dr. Campbell writes:
The CEA’s method, in brief, compared a statistical forecast of the economy based on historical patterns (no stimulus) with the actual economic results in 2009. On this basis, it claims that there are 2 million more jobs in the economy than otherwise would have been the case. The CEA then concludes that this difference between this statistical forecast and the actual results were the effect of the stimulus.
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Letting the EGTRRA and JGTRRA Provisions Expire
Or, what would happen if we “Let Bush Be Bush”. Recall the 2001 and 2003 tax cuts were written to expire, for the most part, in FY2011. The impact of extending those cuts (along with some others) is strikingly depicted in this Figure from the Center for Budget and Policy Priorities (h/t Brad Delong).
Reactions to last week’s economic data
Here I offer some thoughts on last week’s numbers for employment, auto sales, and commodity prices.
Federal Debt: More Time Series
Augmenting my previous post, here are two additional graphs, motivated respectively by comments by Econbrowser readers Eric Swanson (for Figure 1) and Cedric Regula and tim kemper (for Figure 2).