Busy at a conference today, so I must be brief, but the growth in real GDP underwent a large revision for Q3 of this year: up to 3.6% from 2.8%. Sure, that good news, but it warrants a closer look, because it could easily, and mistakenly, get sandwiched into a “green shoots” narrative that would [...]
The Center for American Progress just released a paper I wrote, quite germane to the POTUS’s speech yesterday, about the impact of inequality on growth. It’s called, “The Impact of Inequality on Growth.” I know…how do I come up with such cleverness. You could read the exec sum, but frankly, you’d do much better reading [...]
Over at the NYT Economix blog…stop the presses: the Phillip’s curve has flattened! What it is and why it matters.
Hmmm…you’ve got Bernanke saying the US economy is getting better and, as per incoming data, the Fed will at some point slowly start to pull back support. And you’ve got the OECD doing what all forecasters do these days: marking down their estimates for future growth and warning of various headwinds. Meanwhile, mixed in with [...]
Paul K was as impressed with the recent words of Larry S as I was, and he (Paul) elaborated in interesting detail. I’d like to further elaborate and pose a question to Paul and Larry (really, Larries—Summers and Ball) and, of course, anyone else who’d like to weigh in. One reason Larry’s analysis is so compelling [...]
So, let me get this straight. I leave the country for a week, and you still haven’t fixed the federal budget…or the health care website?! C’mon, people. Back from a great trip to London, still one of the world’s truly great cities. Just walking around is a blast. I did prolific gum flapping, and will [...]
I write to you from the UK where I’ve been talking a lot about the policy responses to the global downturn, known in the US as the great recession. In a word, I’d say that many in the political, economic, and investment community are still trying to figure out why it’s been so difficult for [...]
Over at the NYT Economix blog, based on an important new paper by Federal Reserve economists. Be sure to look at all the panels in their figure 1.1 (I just used one for the NYT piece).
An upside surprise to this AMs GDP report–up 2.8% over the quarter (at an annualized rate), when expectations were for 2%. The source of the acceleration is largely from the volatile inventory sector, so I wouldn’t read too much into it. Given generally tepid consumer and (non-residential) investor demand, both of which were pretty blah [...]
In a post the other day about the Federal Reserve and inflation, I noted that a commonly used rule to gauge where the Fed should set the Federal Funds Rate (FFR) was pointing at around -2% right now. However, I noted that: …if you tweak that calculation in a way that I think you should, [...]
I talk a lot, as one should, about market failures. But government failure is unfortunately, increasingly worthy of attention. Over at the NYT Economix blog.
Over at the NYT Economix Blog.
In a refreshing break from all the health care mishegoss, I keep running into people who want to talk about this idea that faster inflation would help the economy pull out of its growth slog. Since I view faster growth as an extremely laudable and overlooked goal, allow me to say a bit more about [...]
Very interesting piece in today’s NYT on how more inflation would actually be helpful right about now. That’s probably counter-intuitive to a lot of readers so let me elaborate. To be clear, none of us would be calling for faster price growth were it not for the fact that inflation is really low. This chart [...]
Running out so more to say on this later—it is, um, kinda important. But cutting to the chase, our too-slow job growth is a function of our too-slow GDP growth, and a big part of that is fiscal drag and other intangible nastiness emanating from our dysfunctional politics. In other words, that stuff has a [...]
Well, that was expected. Janet Yellen will be nominated by the President tomorrow AM as the next chairperson of the Federal Reserve. It’s not over ‘til it’s over, and it hasn’t started yet, but I suspect she’ll be approved by the Senate. (After the Summers mess, you can bet the admin took the temperatures over [...]
Besides this newspaper account of negative multipliers in action, you’re probably hungering for more information on the economic impact of the shutdown. –In terms of direct costs, which are lower than total costs (as you’ll see below), that of course depends on how long it lasts, but we’re likely talking single-digit billions. The three-week shutdown [...]
–The House actually pinged two bills back to the Senate: one that conditions funding the gov’t on defunding the health care law, and the other that exempts military pay from the shutdown. I suspect the Senate will unanimously approve the latter. The former will lead to the shutdown. –There’s a line of thought (e.g., from [...]
Bin Appelbaum makes a fair point, via Federal Reserve governor Jeremy Stein, that clarity and predictability are important communication skills that the Fed could sharpen these days. It’s a view that’s derived from the confusion markets experienced when the FOMC (the committee that decides on monetary policy) surprised everyone—(though not me!)—by holding off on when they [...]
I’ve already given Ben&Co. a shout out for holding off on the taper, i.e., continuing their monetary stimulus at the same pace instead of beginning to dial back the asset-buying program. Clearly and appropriately, they were motivated by continued weakness in the macro-economy and the job market. The recovery remains fragile, and higher interest rates [...]
Well, how about that? The Fed just surprised everyone and decided to hold off on the taper for now. I suspected they might, given the set of factors I mentioned this AM. From their statement–very much a “yes…but” kind of thing: Some indicators of labor market conditions have shown further improvement in recent months, but [...]
We’re all on shpilkes here at OTE waiting for the outcome of the Fed’s Open Market Committee meeting to wind up later, with the statement due out at 2. The question, of course, hinges on the taper–if and how much they’ll reduce their monthly asset purchases targeted at lowering longer-term interest rates. A few thoughts [...]
Though not of the change of guard part that’s understandably the rage this AM. This is about the pressing matter of their FOMC meeting this Tues/Wed, wherein they’ll decide whether to start tapering off the amount of their monthly asset purchases, current $85 billion/month. The thinking on the street is that the Fed will decide [...]
I’m surprised but not shocked. Damien Paletta and Kristina Peterson of the WSJ were the first I saw to report that the math for getting the President’s alleged front-runner out of the Senate Banking Committee was getting awfully tough. Though I found Larry to be a strong Keynesian ally during the worst of the great [...]