Larry Summers’ recent speech (and Paul Krugman’s paean to it) have brought the issue of secular, decades-long stagnation to the front of the econoblogosphere agenda. Tyler Cowen, of course, made it prominent some time ago. But he posited a tech cause: we’ve picked the low-hanging innovation fruit. Summers, Krugman, et. al. suggest that policies and […]

Well lets try again (two hours of draft having just disappeared)/ The above figure is II.D6 from the 2011 Social Security Report. The reasons why I didn’t use the 2013 version will become clear later, short version is it doesn’t show ‘The Shape of Solvency’ while the longer version is, well, long. This figure shows […]

The 3rd quarter labor share number came out yesterday. I was expecting 96 to 96.4. The number is 96. Here is the update for effective demand and potential GDP. Potential GDP (center of the business cycle) is still cruising right on the lower trend line. Stable and consistent. It has actually decreased some. Effective demand […]

Capacity utilization is telling a very unusual story. Information technology –computers & peripherals, communication equipment and semiconductors — is operating at recession levels. Part of the story is import tablets and smart phones displacing personal computers. But there has to be more to the story. Meanwhile, the rest of industry appears to be operating at […]

Wikileaks reveals one chapter of 29 chapters, 5 on trade. Via wikipedia Fast_track (trade) means… Crooks and Liars points to key issues: The longest section of the Chapter – ’Enforcement’ – is devoted to detailing new policing measures, with far-reaching implications for individual rights, civil liberties, publishers, internet service providers and internet privacy, as well […]

From Thomas Dewar, Public Citizen News release: Quote: “… Also fueling congressional opposition to Fast Track is the abysmal outcome of the Obama administration’s only major trade pact to date, the U.S.-Korea FTA, which is the template for the TPP.  In contrast to Obama’s promises that the Korea deal would boost exports, in the agreement’s […]

I was up late last night tinkering in the “equation workshop” to calculate the center of the business cycle (potential GDP). The equation is opening up my eyes to some new insights. The center of the business cycle is an important concept. It is the core foundation of the real GDP business cycle. Ultimately the […]

Columbia U. Conference Shows Incentives Pervasive but Controls Work  Day one of the Columbia International Investment Conference in New York has concluded, and the takeaways are very clear. The topic is investment incentives, prompted by Louise Story’s “United States of Subsides” series last December. Story moderated panel 1, which covered the pervasiveness of subsidies. How […]

Ah now Kevin Drum wrote about something I know something about. He notes a post by John Cochrane and said he was licking his lips waiting for the Delong/Krugman demolition which, however disappointed him.

Many economists say we still have a big output gap and that we will eventually return to the potential GDP trend from before the crisis. It is not a wise view. Let me reveal a mystery to explain. The following graph shows annual % growth for real GDP and potential GDP (center of business cycle). […]