Last week, I sent e-mail messages to the 177 members of the National Bureau of Economic Research’s program on economic fluctuations and growth. The bureau is the nonpartisan, nonprofit institute whose macroeconomists conduct their own research and ascertain the timing of the nation’s booms and recessions. The e-mail message had just one question: “Which factor was most important for the economy’s growth from mid-2003 through the end of 2006?” It offered the economists five possible responses:
a. The tax cuts signed by President George W. Bush
b. Pent-up demand following the recession, the corporate scandals and the invasion of Iraq.
c. Both (a) and (b) were important.
d. Neither (a) nor (b) was important; it was the regular business cycle.
e. There’s no way to tell now.
I’m shocked that any economist would answer this silly pop quiz. While 49 responded, many responded by writing their own essay – that is, offering an answer not listed. Good for them. Alan Blinder and Robert J. Gordon noted the role of low interest rates. But this was my favorite answer:
Robert E. Hall of Stanford wrote that “the U.S. economy recovered from every single recession it ever had, so the growth in 2003-2006 was generally part of the normal cyclical recovery.”
In case you are wondering, Altman lists the two economists who selected (a).