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BlogAn update on the Fed and the debt-limit impasse
A deal was reached over the weekend by congressional leaders and the President to resolve the debt-ceiling impasse. By that point, it was clear that the possible way out described by John Carney in a blog post to which we linked on Thursday would not be feasible. Nonetheless, the Fed’s ability to supply cash as [...] -
Blog
Gross Distraction
Bill Gross has weighed in on the debate about excessive sovereign debt, invoking a study produced by Kenneth Rogoff and Carmen Reinhart that purports to show a negative relation between debt and economic growth. The “Maginot line” is a debt ratio of 90%, beyond which economic growth slows by 1%. Yet Mr. Gross does not [...] -
Blog
GDP Revisions and Our Looming Policy Masochism
The economy grew at an unflattering 1.3% annual rate in the second quarter, while first quarter GDP growth has been revised downwards to a wretched 0.4%. Against the backdrop of these abysmal numbers, the US government appears poised to do its best to make matters worse. Even if the debt limit negotiations generate an agreement, [...] -
Blog
A longer-term Keynesian approach to macro policy
Many influential mainstream Keynesian economists continue to support high deficits until the nation’s yawning jobs gap is closed. As Laura D’Andrea Tyson observes in a thorough and helpful blog entry posted this morning, this is not a fine-tuning problem requiring a careful weighing of priorities, given the current state of the job market: Like many [...] -
Blog
Will there be a Fed shutdown?
In a recent blog piece at the CNBC website, John Carney offers this interpretation of the federal debt ceiling (see also Felix Salmon’s more recent comment): “The debt ceiling applies to the face amount of obligations issued under Chapter 31 of Title 31 of the U.S. Code—basically, Treasury notes and bills and the other standard [...] -
Blog
Private-sector debt ratios still high by historical standards
With all the recent coverage of the federal government’s debt-limit impasse, it has been some time since the private sector’s financial picture has received much attention in the popular press. Nonetheless, there seems to be little news, as the most recent flow-of-funds data release from the Fed depicts a continuation of trends that have held [...] -
Working Paper No. 680The Levy Institute Measure of Economic Well-Being: Estimates for Canada, 1999 and 2005
This report presents estimates of the Levy Institute Measure of Economic Well-Being (LIMEW) for a representative sample of Canadian households in 1999 and 2005. The results indicate that there was only modest growth in the average Canadian household’s total command over economic resources in the six years between 1999 and 2005. Although inequality in economic […] -
Working Paper No. 679
The Levy Institute Measure of Economic Well-Being, France, 1989 and 2000
We construct estimates of the Levy Institute Measure of Economic Well-Being for France for the years 1989 and 2000. We also estimate the standard measure of disposable cash income (DI) from the same data sources. We analyze overall trends in the level and distribution of household well-being using both measures for France as a whole […] -
Working Paper No. 678
What Ended the Great Depression?
Conventional wisdom contends that fiscal policy was of secondary importance to the economic recovery in the 1930s. The recovery is then connected to monetary policy that allowed non-sterilized gold inflows to increase the money supply. Often, this is shown by measuring the fiscal multipliers, and demonstrating that they were relatively small. This paper shows that […] -
Blog
Do we need federal debt at all?
(Click figure to enlarge.) Could the government loan the money to itself? The federal government is expected reach its debt limit of $14.29 trillion early next month. Normally, the government more or less indirectly sells a large amount of Treasury securities to the Fed, which is technically a private entity, separate from the familiar government [...] -
Working Paper No. 677
The Global Crisis and the Remedial Actions
The global financial crisis has now spread across multiple countries and sectors, affecting both financial and real spheres in the advanced as well as the developing economies. This has been caused by policies based on “rational expectation” models that advocate deregulated finance, with facilities for easy credit and derivatives, along with globalized exposures for financial […] -
Working Paper No. 676
Quality of Match for Statistical Matches Used in the 1989 and 2000 LIMEW Estimates for France
The quality of match for each of four statistical matches used in the LIMEW estimates for France for 1989 and 2000 is described. The first match combines the 1992 Enquête sur les Actifs Financiers with the 1989–90 Enquête Budget de Famille (BDF). The second match combines the 1998 General Social Survey (EDT) with the 1989–90 […]