Data released today by the Bureau of Economic Analysis showed a decrease of 0.1 percent in U.S. real GDP for the fourth quarter of 2012. If confirmed, that would mark the first quarterly drop in real GDP since the recession ended in mid-2009. Of course, we should always take the advance estimate of GDP with … Read more
News that the US economy contracted in Q4 for the first time since the recession ended is a shock. However, the 0.1% contraction (annualized) is an exaggeration of the economy’s weakness. A confluence of factors took a toll. The preliminary estimate is that inventories took 1.35% off GDP. Also with an incomplete information set, the … Read more
I recently came across a video of one of my talks on the Global Financial Crisis, or, Global Economic Crisis, that provides a clear antitdote to orthodox thinking. You can view it here: “The Financial Crisis Viewed from the Perspective of the Social Cost Theory”, Social Cost Workshop, Wright State University, Ohio, April 27, 2012; … Read more
Summary: The 21st century holds many economic challenges for the world. Rivals (eg, China). Therobot revolution (job losses from the next wave of automation). And slowing technological growth, an essential driver of the US economy. This is a follow-up to Has America grown old, and can no longer grow? Or are wonders like the singularity in our … Read more
In a series of posts[1] [2] [3] [4] [5] over the last couple of months, fellow Economonitor blogger L. Randall Wray and I have been exploring the conditions under which the government’s debt can be said to be sustainable. Wray writes from the point of view of Modern Monetary Theory (MMT), while I adopt a … Read more
In a previous post in this series, I criticized proposals to raise the eligibility age for Social Security and Medicare. It is already getting harder to save enough for a comfortable retirement; raising the eligibility age would just make it still more difficult. In this installment, I turn to policies to encourage retirement saving, explaining … Read more
The confrontation of two views of modern capitalism – neoliberal capitalism and state capitalism – will determine the social market economy that forms the New Pragmatism in the future. Even the International Monetary Fund, for many years the hub of economic orthodoxy, admits that policy should be focused on increasing tax revenue, rather than on cutting … Read more
Speaking with CNN’s Poppy Harlow at Davos, RGE Chairman Nouriel Roubini reiterated the biggest outlying risks to the global economy: U.S. fiscal woes, the eurozone sovereign debt crisis, a potential China hard landing, and geopolitical risk in the Middle East. Nouriel argued that the worst scenario need to materialize for a meaningful impact on global … Read more
In his novella Chronicle of a Death Foretold (Crónica de Una Muerte Anunciada in the original Spanish), Gabriel Garcia Marquez commences at the end of the story gradually revealing the events leading up to a murder. The non-linear telling creates an unusual tension. With the conclusion known, only the precise steps leading to the tragedy remain unclear. The … Read more
As the world economy limps into 2013 with an outlook of continued sluggish growth, it appears the greatest obstacle to economic recovery in the New Year is not only bad economic policies. It is also the threat of more bad economic policies, especially ones that threaten the very institutions underpinning the market economy. Policy uncertainty … Read more