Reader Econned asks me for a critique of ecological monetarism. I don’t have one overall assessment, but I will say that I do not understand (1) how Cameron Harwick came up with the conclusion that the case for ecological monetarism was proven by inflation outcomes, and relatedly (2) how the below graph was constructed, which I believe is the basis for that conclusion.
GDO, revised GDP for Q2
While GDP is revised down, GDO matches my guess from last month.
The 2022H1 Recession Call in Hindsight, the 2023H2 Call in Context
Back at the beginning of this year, Mr. Steven Kopits asserted that the Philadelphia Fed’s early preliminary benchmark supported a recession in 2022H1, to wit:
2.5% Russian GDP Growth in 2023: Finance Minister
That’s from a Reuters report a few days ago. I think it’s important to (1) keep in mind what forecasters are saying, and (2) what GDP ex-military spending looks like.
Blue line (pink line) in Figure 1 below shows the IMF July (OECD June) GDP forecasts.
“The Problems with China’s Economy…”
The real challenge is for the government to explicitly recognize that without a strong relationship with its private sector, its hopes of transforming the economy into a high-tech one capable of generating more productivity and employment growth are unrealistic. It needs to back this recognition up with concrete measures to support the private sector, including financial-sector liberalization that will help direct more resources to private businesses rather than state-owned ones. Transparency about information and about its policymaking process will help the government a lot more.
The Atavistic Component of Consumer Sentiment
One of the enduring mysteries of the past two years is why measured economic sentiment remains so sour despite objectively good economic outcomes.
Q3 GDPNow at 5.9% (SAAR)
To see how dramatically this bean counting approach deviates from consensus, consider this graph:
Divisia M4 and the Price Level
Posit money includes everything in M1-M3 and Treasurys per John Hall (says use broad divisia aggregate). Estimate a regression of log GDP deflator divided by Divisia M4 and real GDP over the 1967-2019 period (Engle-Granger).
QCEW Release and 4 Measures of NFP Employment
Here’s a picture of employment, normalized to 2022M03.
If Child Labor Is OK, Why Not Poorhouses?
From WIZM:
Children ages 14 and 15 would no longer need a work permit or parental permission to get a job under a bill Republican Wisconsin lawmakers released last last week.
The proposal comes amid a wider push by mainly Republican state lawmakers to roll back child labor laws, despite the efforts of federal investigators to crack down on a surge in child labor violations nationally.