September 20, 2010
The fat lady sings
The NBER Business Cycle Dating Committee issued a statement today declaring that the bottom of the most recent recession was reached in June of 2009, with the economy in the expansion phase of the business cycle during the 15 months since then. This confirms the announcement issued by the Econbrowser Business Cycle Dating Committee last April.
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September 19, 2010
What's holding back employment growth?
I certainly agree that the most important factor holding back employment growth at the moment is low demand for firms' products and services. But I disagree with those who suggest that this is the only factor.
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Posted by James Hamilton at 08:16 AM permalink | Comments (41) | digg this | reddit
September 18, 2010
Keep on Cooking Your Eggs and Washing Your Pre-Washed Spinach Thoroughly
Fortunately for me, I don't like peanut butter. From NYT, on the Senate bill to expand FDA powers and increase funding:
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September 16, 2010
The Yuan's Course
The debate over the yuan's value is heating up again. [Free Exchange/RA] [WSJ RTE/Talley] [WSJ RTE] Here is a plot of two relevant time series.
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"Is the U.S. heading toward another recession?"
That was the title of the Minnesota Public Radio's Midmorning show, with Kerri Miller. Charles Wheelan, of The Naked Economist, and I were the guests.
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September 15, 2010
Links for 2010-09-15
Quick links on sources of job creation, recession probabilities, and alternative ways to access your favorite economic books.
Continue reading "Links for 2010-09-15"
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September 14, 2010
Three Graphs Regarding EGTRRA/JGTRRA
If (1) one is a concerned about budget deficits over the longer term, but (2) is concerned that a reversion to pre-2001 tax rates would hurt short term growth, then one should favor the partial extension of EGTTRA/JGTRRA for only those earning less the $250K ($200K for singles).
Continue reading "Three Graphs Regarding EGTRRA/JGTRRA "
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September 13, 2010
The Global Economic Crisis
Impacts, Transmission and Recovery.
This was the topic of a conference I recently attended, sponsored by the Korean Development Institute and the East-West Center, organized by Maurice Obstfeld, Dongchul Cho, Andrew Mason and Sang Hyop Lee. It was a great opportunity to hear diverse views on the progress of the world economy. The papers are here.
Continue reading "The Global Economic Crisis"
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September 12, 2010
Should the Fed try to depress long-term yields further?
I've been sharing with readers my recent research with Cynthia Wu, in which we found that the Fed could likely lower long-term interest rates further by buying more long-term securities, even though the short-term rate is essentially zero and even though the newly created reserves would simply sit idle in banks' accounts with the Fed. Here I'd like to take up the question of whether such a policy would be desirable.
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Posted by James Hamilton at 06:56 AM permalink | Comments (62) | digg this | reddit
September 08, 2010
The "Ever-Expanding" Government Sector, Illustrated
Just some numbers to bring reality into the general discussion:
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Posted by Menzie Chinn at 08:40 PM permalink | Comments (115) | digg this | reddit
The Budgetary Impact of EGTRRA/JGTRRA Extension and AMT Fixes
...According to the CBO
In evaluating the advisability of extending either completely or partially the tax cuts of 2001 and 2003 (aka EGTRRA and JGTRRA), and implementing additional fixes to the AMT, one should consider the impact on the budget.
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Posted by Menzie Chinn at 07:25 AM permalink | Comments (9) | digg this | reddit
September 04, 2010
Snapshots of the Employment Situation, August 2010
I thought I'd add a few observations on the latest employment report (other reports here: [NYT], [WSJ RTE/Izzo] [CR], [Economist's View]). First, by an alternate measure, employment is improving more rapidly than the standard nonfarm employment (NFP) measure. Second, the alternate measure increased faster than nonfarm payroll employment over the period of temporary Census hiring. Third, aggregate hours worked in the private sector continues to rise faster than private sector employment. Fourth, the NFP growth consistent with zero GDP growth is lower in the last decade, versus previous decades, even while the elasticity of NFP growth with respect to GDP growth has risen.
Continue reading "Snapshots of the Employment Situation, August 2010"
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September 03, 2010
August auto sales
August auto sales worst in 27 years, declared some headlines. While the statement may be true, I don't think it's the best way to summarize what we're seeing.
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Posted by James Hamilton at 05:33 AM permalink | Comments (16) | digg this | reddit
September 01, 2010
What Kind of Model Is Brian Riedl Using?
If one wants to be taken seriously in the world of policy analysis, one should at least use an internally consistent framework. This consideration, apparently, has not troubled Mr. Reidl.
Continue reading "What Kind of Model Is Brian Riedl Using?"
Posted by Menzie Chinn at 08:55 PM permalink | Comments (36) | digg this | reddit
August 31, 2010
Policy tools that could lower interest rates further
Even though the overnight interest rate has been stuck near zero for 20 months, are there options available to the Federal Reserve or the U.S. Treasury to bring longer-term yields down further? I have been looking into this question with Cynthia Wu, an extremely talented UCSD graduate student. We present our findings in a new research paper, some of whose results I summarize here.
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Posted by James Hamilton at 03:51 PM permalink | Comments (41) | digg this | reddit
August 30, 2010
What Can Sustain GDP Growth? Open Economy Version
With the consumer in the doldrums, residential investment unlikely to rebound in the near future, and government stimulus constrained by political gridlock, it's hard to see where the sources of aggregate demand will be. I'm going to extend Jim's search for silver linings in the latest GDP release.
Continue reading "What Can Sustain GDP Growth? Open Economy Version"
Posted by Menzie Chinn at 05:14 PM permalink | Comments (34) | digg this | reddit
August 29, 2010
New database on the maturity structure of publicly-held debt
I have been working on a project with UCSD graduate student Cynthia Wu to try to assess the potential for the Federal Reserve to continue to influence long-term interest rates even when the short-term interest rate is essentially at zero. I'll be relating the conclusions from that research in a few days. But first I'd like to call attention to a new data set that we developed on the maturity structure of publicly-held debt which may be of interest to other researchers. As Paul Krugman likes to warn, this one is just for the wonks.
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August 27, 2010
GDP revised down
The Bureau of Economic Analysis, which last month had estimated that U.S. real GDP had grown at a 2.4% annual rate during the second quarter, today revised that estimate down to a 1.6% annual rate. But the revision isn't quite as discouraging as it might sound.
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August 26, 2010
A quantitative assessment of the scientific consensus on anthropogenic climate change
From the abstract to the paper:
... we use an extensive dataset of 1,372 climate researchers and their publication and citation data to show that (i) 97-98% of the climate researchers most actively publishing in the field support the tenets of ACC outlined by the Intergovernmental Panel on Climate Change, and (ii) the relative climate expertise and scientific prominence of the researchers unconvinced of ACC are substantially below that of the convinced researchers.
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August 25, 2010
More thoughts on what to expect from the Fed
There is disagreement within the FOMC. How will it be resolved?
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Posted by James Hamilton at 03:49 PM permalink | Comments (28) | digg this | reddit
August 24, 2010
Kevin "Dow 36,000" Hassett* Speaks on "Keynesian Economics"
From Bloomberg:
The biggest Keynesian stimulus in U.S. history was a bust.
Incredibly, some Keynesians who supported Barack Obama's $862 billion stimulus now claim it fell short of their goals not because the idea was flawed, but because the spending package was too small.
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August 22, 2010
Long-term perspective on the stock market
Nobody can tell you for sure what's going to happen next in the stock market. But thanks to the nice data set collected and maintained by Yale Professor Robert Shiller we can speak with authority about what it's been doing for the last 140 years.
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