Like the folks writing at Mahalanobis, Marginal Revolution and Free Exchange, I was rather surprised to see Berkeley Professor Brad DeLong claim, “A normal person would not argue that the New Deal prolonged the Great Depression.” Since Brad is a smart guy, I think it might be time for me to acknowledge my freakiness.
International Economics at the AEA/ASSA: Selected Items
The Allied Social Sciences Association (incorporating the AEA, the Econometric Society, the International Economics and Finance Society and many other groups) meetings took place in Chicago this last weekend. I wasn’t able to go to that many sessions, but I did attend a few related to international issues.
Recession probability
Yet another tool to try to assess the probability of a recession.
Combining forecasts
I have been suggesting that the best statistical approach, when confronted with conflicting signals such as the employment estimates from the BLS payroll survey, the separate BLS household survey, or the huge database from the private company Automatic Data Processing, is not to selectively throw some of the data out but rather to combine the different measures. Judging from some of the comments this suggestion has received both
Employment still holding up (I think)
Another week of some wildly contradictory employment indicators.
President Bush on Economics
On Wednesday, the President writes in a Wall Street Journal op-ed (sub. req.):
December auto sales
Auto sales data released today look just great, as long as your name is Toyota.
Fiesta Bowl
Could be the greatest game in the history of college football, says Matt Zemek.
Low Real Rates Disappear…but the Deficit Remains
I’ve been looking at real long term interest rates as proxied by nominal rates minus expected inflation. The problem of course is finding measures of expected inflation. Subtracting off the ex post rate (appropriate under the rational expectations hypothesis) can lead to misleading inferences — and is not practicable for current measures of long term rates. Using ten year constant maturity rates and the Society of Professional Forecasters 10 year horizon CPI inflation rates yields the following picture.
What will the Fed do next?
Probably nothing.