Category Archives: recession

NBER Eggheads Finally Proclaim Recession

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The National Bureau of Economic Research today announced that its Business Cycle Dating Committee had officially determined a peak in economic activity at December 2007, which signals the start of the recession.    I am a member of the committee.    Though I speak only for myself, not the committee, I offer my views on two questions of possible interest: 

(1)   Who needs the NBER Business Cycle Dating Committee (BCDC) anyway?

(2)   Why did we pick December 2007 as the starting month of the recession? read more

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A Few Tax Policy Suggestions for Our New President

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Three areas that President Obama will have to address during his term in office are the recession, energy and the environment, and the long-run fiscal outlook.    The recession is the most urgent.  But the long-run fiscal outlook will be the most difficult.   Social Security and Medicare would have made addressing the long-run fiscal outlook difficult in any case.  (Did you know that the first baby-boomers are starting to draw Social Security this year?)   The Bush tax cuts of 2001 and 2003 made it worse.  The rapid spending increases of the last eight years made it still worse.   The financial crisis and recession are now making it still worse.  To be clear, fiscal stimulus today is appropriate, given the weak economy.  The trick is to combine it with the minimum damage to future budgets.   
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NOW Are We In Recession?

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Is the United States in recession?   If one looked solely at the adverse shocks that have hit the economy over the last year, one would infer an unusually high probability of a recession.    If one consulted some of the most import economic measures over the last year, one would say the country clearly entered a recession last January.  If one gauged the popular mood, one would hear, “Of course we are in recession !” 

 

The one criterion that has been missing is the one criterion that people most commonly have in their minds as the definition of a recession:   two consecutive quarters of negative growth.   This morning, October 30, the Commerce Department released the advance estimate of GDP for the 3rd quarter.   It showed a decline.   The decline was small:  just 0.3 per cent at an annual rate; and it is only one quarter, not yet two.    But at this point there can be little doubt that we are really truly in recession.  read more

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