CERF Blog

Modern economic theory has come to think of important macro-economic events as caused by shocks. The types of shocks are usually organized into four broad categories: supply shocks, demand shocks, policy shocks, and bubbles/debt shocks. United States examples of very large shocks include the recession of 1974, (a supply shock), the Great Depression, the 1981… Read more

The Fed’s national wealth report for the second quarter is out today. For a New-Classical Macroeconomist, this is one of the most important data releases. Wealth is one of the most important theoretical drivers of consumption, and it is one of the drivers in our forecast model of the United States economy. National wealth, i.e.… Read more

The August employment report is out this morning. The United States unemployment rate rose slightly from 9.5 to 9.6 percent, driven more by labor force gains than employment losses. The non-farm job losses occurred in the public sector, the largest component of which was likely related to the Census wind-down. The bulk of the Census… Read more

The FDIC’s quarterly banking profile, providing data for quarter 2, was released today. The number of 2010 United States bank failures will likely exceed the 2009 failures, the FDIC reported. This was as I reported in this space back in May. Thus far this year there have been 118 bank closings, which compares to about… Read more

The Bureau of Economic Analysis released their second estimate of United States 2010 second quarter Gross Domestic Product today. The revised estimate of 1.6 percent real GDP growth is much lower than the initial estimate of 2.4 percent, but some commentators spoke of this release in favorable terms, as it was higher than pre-release estimates… Read more

The United States unemployment rate held steady at 9.5 percent, a result of losses in both jobs and the labor force. The job losses occurred in the public sector, the largest component of which was the Census wind-down. While the long-term unemployed slipped a bit from 6.8 million to 6.6 million, 6.6 million remains a… Read more

The Bureau of Economic Analysis released its first estimate of the United States 2010 second quarter Gross Domestic product growth rate today. Their estimated 2.4 percent growth rate was below most economists’ expectations, ours included. They estimate that consumption expenditures grew very mildly at 1.6 percent, investment expenditures grew massively at 29 percent, government expenditures… Read more

I discussed three stylized possible equilibria for the United States economy in a July 18 blog. The best equilibrium, one with rapid job and GDP growth and low inflation was relegated to an unlikely possibility at this time. The worst equilibrium of the three, the “bad-deflation” scenario, was one where debt-laden and cash-strapped consumers hold… Read more

Previously published on NewGeography.com on 6/19/2010 The most fanatical Keynesians are losing their composure. Brad DeLong, a prominent Berkeley economist and Keynesian, is virtually yelling that “We Need Bigger Deficits Now!”, emphasis his. Paul Krugman does DeLong one better, calling proponents of fiscal responsibility madmen. They are following the gospel of John Maynard Keynes, who… Read more

Previously published on NewGeography.com on 7/11/2010 A year ago we were hearing all about green shoots. Analysts claimed to find them everywhere. Today, we never see the term. In fact, there seems to be a growing malaise. By the end of June the first quarter’s Gross Domestic Product (GDP) estimate was revised downward a full… Read more