The New Economy and the Old Business Cycle
From the early 1970s, well before today's undergraduates were even gleams in their parents' eyes, labor productivity growth one percent per year... From 1994--when today's freshmen were 9--acceleration of trend pdty growth to 2.5 percent per year... On top of this superimposed business cycle...
Boom of the 1990s...
Falling NAIRU...
Screeching to a halt in 2000, when today's seniors in their second semester of freshman year...
Not screeching. More like a slow-motion traln wreck.
Unemployment: up from 4 to 5.8 percent. Would expect 6.5 percent given behavior of employment.
Employment and hours: hours down 1 percent to spring 2001. Hours now down 3 percent. 6.2 percent "hours gap."
Production peaks in early spring 2001. Falls for 9 mos. Recovers.
NBER business cycle dating committee.
-expect slow labor force growth (less than 1 percent) -potential labor productivity? -Silicon Valley producers -consumers of SV products -historical analogies -aggregate demand? -Terroris -corporate fraud -overhang -fear of low aggregate demand -defense.
-interactions? -how much does low investment slow productivity growth?
Bay Area Economic Pulse
WSJ website 2003 quarter-by-quarter consensus forecast: 1.6, 2.1, 3.8, 4.0
Write to Barsky/Killian about stagflation
Somebody uses the 0.015 percent number for the effects of deficits. Sign of the "effectiveness" of the White House spin operation. Time to bang my head gainst the wall.
Tappan Munroe on California and National Economy: in his view, no significant job growth nationwide until we get to 3.5 percent plus real GDP growth.
I have 3 million hits a month on my website. And nobody offered me $10 million in venture capital... *Sniff*
Posted by DeLong at April 29, 2003 08:33 PM | TrackBack
Am I the only one out here who worries about some weird variant of stagflation: namely low or very slow growth that can no longer keep ahead of even the modest inflationary pressures that we are beginning to see already? Just wondering...JMP
Posted by: VJ on May 1, 2003 01:59 AMThere's certainly plenty of stag to go around, but I don't see any flation. I think Core CPI last month was 0% for the month and 1.5% y/y in spite of rising import prices. Wages aren't going to rise much in this environment, and if prices rise then there is plenty of spare capacity to bring online. Productivity gains might be lower going forward, but they had been really high so that's OK.
Oil doesn't seem to be much of a problem now either. That certainly could have caused some stagflation if it went scarce.