The era of ultra-low interest rates is upon us and is likely to remain for a good while (see Buoying the Economy: An Era of Ultra-Low Interest Rates, July 13. 2020 and The Fed’s New Game Plan: Radical?, August 31, 2020). The Fed has committed to keeping its target for the policy interest rate—the overnight … Continue reading The Impact of Ultra-Low Interest Rates
More Fiscal Stimulus Justified? A Contrarian View
The economic news of late—retail sales, labor market data—and the COVID-19 outbreaks and tighter restrictions has been somewhat discouraging. Many have concluded that the recovery has come to an end, and more fiscal stimulus is needed. The incoming president is proposing nearly $2 trillion in new stimulus—on top of the $0.9 trillion recently enacted. Such … Continue reading More Fiscal Stimulus Justified? A Contrarian View
January 6, 2021 Presentation
THE NATIONAL ECONOMY: RECOVERING FROM THE COVID-19 SHOCKDownload Presentation
Taking Stock of the Economic Recovery
The start of the year is a good time to take stock of where the economy has been and where it is headed. The COVID-19 shock in early 2020 led to the sharpest contraction in output on record. The table below shows that real GDP plunged 9 percent in the second quarter (at a quarterly, … Continue reading Taking Stock of the Economic Recovery
The Demise of This Expansion is Greatly Exaggerated
Like the impending death of Mark Twain, the recent commentary suggesting that this economic expansion has lost its life is considerably overstated. Much has been said about the uptick in new claims for unemployment insurance, shown in the chart below, and its link to the restoration of restrictions by many governments in response to the … Continue reading The Demise of This Expansion is Greatly Exaggerated
The Ins and Outs of This Recovery
The recent news on retail sales and job claims, along with renewed outbreaks of COVID-19, seem to be suggesting that we are in for a long, dark winter. The zip in the economy seems to be gone. However, it is worth putting recent developments in perspective. The economy still has forward momentum. Recall that the … Continue reading The Ins and Outs of This Recovery
Has the Recovery Topped Out?
Many analysts are worried about the recovery losing steam, especially in the face of renewed outbreaks of COVID-19 and the absence of more fiscal stimulus. Yet the unemployment rate fell to 6.9 percent in October, down nearly 8 percentage points from its peak six months earlier in April. To put this information in perspective, it … Continue reading Has the Recovery Topped Out?
Redistribution: Votes Versus Income Shares
While income redistribution has always been a hot topic, the debate has become more intense in recent years. In part, this has reflected stagnation in median family income. Also, standard measures of income distribution had been showing growing inequality in the distribution of income. However, inequality decreased and median family income improved in 2018 and … Continue reading Redistribution: Votes Versus Income Shares
What’s the Market Telling Us?
Isn’t the stock market supposed to be a barometer of the economy? Yet, while the market climbs, hasn’t news on jobs and the economy been mixed? New claims for unemployment insurance seem stalled at a high level and many businesses are struggling, if not failing. Isn’t there a disconnect? Could the market be headed for … Continue reading What’s the Market Telling Us?
The Economy: How Are Things Looking Now?
Analysts seem divided on where the economic recovery from the COVID shock stands. Some see recent news to be pointing to a still-vigorous expansion—a “V”-shaped recovery. But others read the news, including new COVID outbreaks, to be suggesting that the expansion is stalling out or even receding—that is, a “W” is unfolding. Putting the various … Continue reading The Economy: How Are Things Looking Now?
Thomas D. Simpson, PH.D. 