Paul Krugman may not be that concerned by the Obama administration’s new projection that the unified federal budget deficits will sum to $9 trillion dollars over the next 10 years. But I am.
I Am Even More Confused Now…
By Richard Posner’s math…On August 25th he wrote, regarding Dr. Romer’s August 6 speech:
Reflections on the Causes and Consequences of the Debt Crisis of 2008
From “Reflections on the Causes and Consequences of the Debt Crisis of 2008,” in the La Follette Policy Report by Menzie Chinn and Jeffry Frieden:
In late 2008, the world’s financial system seized up. Billions of dollars worth of financial assets were frozen in place, the value of securities uncertain, and hence the solvency of seemingly rock solid financial institutions in question. By the
end of the year, growth rates in the industrial world had gone negative, and even developing country growth had declined sharply.
Good news on house prices
I was happy and surprised to see that the nominal
S&P/Case-Shiller seasonally adjusted Home Price Index rose by 0.75% in June for a composite of 20 U.S. metropolitan areas.
OMB and CBO Economic Projections
The WHite House has just released the Mid Session Review and the CBO the Budget and Economic Outlook: An Update. Here are the economic projections:
The market-perceived monetary policy rule
Stanford Professor John Taylor has suggested that monetary policy could be summarized in terms of a simple rule, lowering interest rates when output is too low and raising them when inflation is too high. A number of academic papers have investigated this rule from the perspective of describing what the Federal Reserve has historically done. In a new paper co-authored with Federal Reserve economist Seth Pruitt and Office of Immigration Statistics economist Scott Borger, I take a look at what monetary policy rule the market perceived the Fed to be following over different historical periods.
The Road Ahead for the Fed
Tom Keene has been doing a series for Bloomberg Radio this week on the new book, The Road Ahead for the Fed. You can listen to Tom’s interviews with me or three of the other authors who contributed to the book by clicking on a link below.
Richard Posner Misunderstands Numbers, Yet Again
Richard Posner displays his failure to understand the difference between expenditures (reported on Recovery.com) and tax rebates (not reported online, but have to be estimated).
Basic Math for the Math Challenged
Since Richard Posner has decided to exhibit his math skills again, I thought it useful to work through some math to see how one can obtain back-of-the-envelope estimates for the stimulus package. I’ll use Mr. Posner’s numbers to illustrate.
Monthly GDP Estimates: Stabilization and Upswing…for Now
Here are the latest reads on monthly GDP: