BusinessWeek Online -- Economics Unbound

Why is real GDP growing in a recession?

Tue, 02 Dec 2008 12:10:48 -0500

As I noted yesterday, we have now been in recession for a year, but reported real GDP has actually risen. How can that be? I've looked a bit deeper into this. One of the big problems, I think, is the...

The Recession is A Year Old

Mon, 01 Dec 2008 12:06:09 -0500

Yes, we have been in a recession for a year--even though real GDP is up. The current downturn began in December 2007, according to the National Bureau of Economic Research. The Cambridge-based organization, which traditionally provides the beginning and ending...

The Textbook is Here!

Sun, 23 Nov 2008 13:20:11 -0500

Sorry to interrupt this stream of gloom, but my textbook is finally here! It's called "Economics:The Basics" and I wrote it for the typical person who wants to learn about economics and the economy, but doesn't want to wade through...

The Pitfalls of Obama's Plan

Sat, 22 Nov 2008 13:38:15 -0500

Now it begins. This morning President-elect Obama took the first step towards asserting himself economically. He laid out not a detailed plan but a goal: To save or create 2.5 million jobs in the next two years. The jobs would...

Should Obama announce his economic plan soon?

Fri, 21 Nov 2008 17:41:30 -0500

[Saturday morning: That didn't take long, did it?] Now that it seems likely that President-elect Barack Obama will select Tim Geithner as his next Treasury Secretary, should he soon announce his economic plan as well? Under ordinary circumstances, the answer...

Not Enough Yet

Fri, 21 Nov 2008 06:42:44 -0500

Summarizing my current views: --$3 trillion in overspending and overborrowing by U.S. consumers. Out of that: --$1 trillion in losses already absorbed by financial institutions. That's gone. --$1 trillion in losses absorbed by government recapitalization of the financial system (that's...

GM: The More Things Change...

Wed, 19 Nov 2008 18:44:55 -0500

Looking back through old Businessweeks, I came on this cover story from November 1, 1993: GM: Can Jack Smith Fix It? The answer, I guess, was no....

P.S. I Was Right About Deflation

Wed, 19 Nov 2008 17:08:23 -0500

Just to point out...back in July I wrote a post entitled "Yes, still deflation" in which I predicted that: Maybe I’m crazy, but this morning’s CPI number actually improves the odds of deflation sometime in the next year....As the economy...

Real Wages Up by Near Record--Good News?

Wed, 19 Nov 2008 13:34:47 -0500

I've been on this kick about falling real wages for most workers being a major cause of the crisis (see here for example). The cost of all sorts of things, including housing and energy and food, went up relative to...

The Problem with the Auto Industry

Sun, 16 Nov 2008 18:16:58 -0500

I wasn't going to write about the auto industry today...but then I came on a column entitled "Where's the love? I never knew Detroit was a dirty word," by Susan Tompor, in the Detroit Free Press. She writes: I didn't...

Understanding the Dismal Science

Fri, 14 Nov 2008 07:52:01 -0500

As we think about digging our way out of our current hole, it's important to remember why economics is often called the 'dismal science'. Yes, there's a history behind the term, which goes back to the 1800s. But that's not...

How Far Will Consumption Fall?

Thu, 13 Nov 2008 13:59:08 -0500

Menzie Chinn at Econobrowser does a back of the envelope calculation and comes with this: a 3% y/y decline in consumption by 09Q3; the only comparable instance of such a decline is 1951Q3, when consumption declined y/y by 2.3% (all...

Definition of Depression

Wed, 12 Nov 2008 14:15:27 -0500

When I was writing my 2000 book The Coming Internet Depression, I researched the definition of 'depression.' And of course what I found out was that there was no common accepted definition of depression. One tongue in cheek definition is...

Paulson faces reality

Wed, 12 Nov 2008 11:55:24 -0500

Listening to Hank Paulson’s speech today, one is impressed both by his flexibility and a barely-controlled underlying sense of panic. In a few short weeks, the Treasury Secretary has gone from a bailout plan focused solely on using $700 billion...

Do Crises and Growth Go Together?

Mon, 10 Nov 2008 14:14:40 -0500

Nobody likes a financial crisis. But I was just reading an interesting piece by three economists, Romain Rancière, Aaron Tornell, and Frank Westermann. They argue that ...the bottom line remains that risk-taking has positive consequences in the long run even...