Archive for the ‘New Posts’ Category

No Virginia, There Is No Such Thing As Expansionary Contraction

June 10th, 2011

A lot of people have recently asked me why we’re stuck in this policy vise-grip, targeting spending cuts and deficit reduction when we should be targeting job growth. There’s no single perp here—there are numerous explanations, including politics and ideology of course, the changing views of the electorate on the effectiveness of Keynesian interventions, and… Read more

Friday Afternoon Musical Interlude

June 10th, 2011

It’s time to make it funky.  Obviously, you’ve got to start with James Brown. But I’ve always loved the funkulation of this particular Stevie Wonder jam, “I Wish.”   That kickin’ bass line starts it off and it just rocks steady from there on in. Plus, given the logjam in the current jobs debate, the sentiment—“I… Read more

See What I Mean?

June 10th, 2011

Just a quick follow up to the slow-growth post from last night. The figure below shows an unemployment rate forecast, kindly provided by Mark Zandi of Moody’s Analytics. Based on the type of relations I presented last night, this forecast clearly presumes above trend GDP growth, which in turn assumes current headwinds are largely temporary. … Read more

Growth, Sure…But How Much?

June 9th, 2011

Jackie Calmes had a slightly hopeful piece in the NYT today, noting how policy makers are recognizing that they might need to pivot a bit from the budget deficit to the jobs deficit: “Recent signs that the economic recovery is flagging have introduced a new tension into the bipartisan budget negotiations, giving rise to calls… Read more

But Dad…The Bond Market Said I Could!

June 9th, 2011

The bond market is like the proverbial mama in the old adage, “If mama’s not happy, then nobody’s happy.” Ever since the Clinton years, when the bond vigilantes—investors who would demand crippling high returns if we failed to obey them—allegedly ruled, more policy than you’d like to think is deeply influenced by warnings of how… Read more