SAO PAULO | By Marcus Nunes | In “Mind the (spending) gap,” Atif Mian and Amir Sufi of Princeton and Chicago, respectively, are on the right track but go about it the wrong way and so arrive at a wrong conclusion. They wonder: We all know that households cut back on spending dramatically during the Great Recession. Are they spending now? Has spending caught up to the trend the United States was on before?
SAO PAULO | By Marcus Nunes | David Andolfatto has an interesting take: “The question is this: Would you expect the labor market in the U.S. border states to look more like the Canadian labor market or more like the U.S. labor market?”
WASHINGTON | By Pablo Pardo | Federal Reserve’s Beige Book is like a breeze of fresh air for those who think that economic analysis relies too much on data and math. The famous Book is made just by using non-systematic, non-quantitative inputs. Maybe that is not too effective to estimate until the last decimal the future evolution of the GDP deflator, but it is extremely precise to determine the current state of affairs of the economy.
SAO PAULO | By Marcus Nunes | The strong counteracting monetary policy response to permanent Social Security benefit increases likely explains why their effects were relatively short-lasting and did not spread to broader economic indicators, say Christy and David Romer.
NEW YORK | By Robert Johnson via Next New Deal | The pensions crisis has far-reaching implications for the future of the U.S. economy: the state and local government sector is about 14 percent of the American workforce. What broke the system, and how do we fix it? Beyond the economic crisis, which put enormous pressure on state and municipal budgets, poor decision-making and the influence of big money interests has led to the underfunding of some state and city public pensions.
SAO PAOLO | By Marcus Nunes | In his recent post at Econlog Scott Sumner writes “Questions that have no answers”: There are some questions that have no answers. One example is the question: “Was monetary policy too expansionary during the housing boom?” The only sensible answer is “it depends.” It’s not clear what the Fed was trying to do during this period.
LONDON | By Joseph Abate at Barclays | For a global 21st century economy, there is a surprising amount of US paper currency circulating. Total US currency outstanding is approximately $1.2trn, which on a per capita basis works out to $3,800.
SAO PAULO | By Marcus Nunes | According to Alan Goolsbee, as Mr. Bernanke prepares to depart at the end of January and the Fed has initiated the exit-strategy countdown with the start of tapering, it is time to take stock of the QE Era—and time for the critics to admit they were wrong.
LONDON | By London analysts | Since the end of the most recent recession, US consumer confidence has remained on an upward trend, despite several negative shocks from government policy. Given this track record, we expect the fall in confidence related to the federal shutdown to be short-lived.
SAO PAULO | By Marcus Nunes | For less bounce! The Philly Fed has called the measure of GDP obtained from “crushing” the usual measure of GDP (expenditure based) and the income-based measure GDI GDP plus…