June 30, 2021 — One obstacle to productive public discourse and deliberation is a syndrome whereby the media, whether mainstream or otherwise, present policies in a manner that could be called “false imbalance.” No, I don’t mean “false balance.” False imbalance is quite different. It refers to the temptation to cast in a negative light, policies that in fact are reasonable attempts to balance competing objectives. Examples can be drawn from health care, fiscal policy, and monetary policy.
March 27, 2021 — It has been a year since the US and the world went into recession. Because of its origins in the sudden pandemic, it was possible to reliably discern the advent of the recession before it was reflected in any of the standard economic statistics, which is rare. (I hope it shocks no one to learn that economists can’t normally predict recessions.)
By the end of the second quarter of 2020, US GDP had fallen 11 %. This record plunge took the US economy from a level that is estimated to have been 1.0% above potential output at the end of 2019, to a level 10 % below potential in mid-2020. Potential output is the level of GDP that is produced when unemployment is at its so-called natural rate, the capital stock is operating at the capacity for which it was designed, buildings have their normal occupancy rates, etc.
January 28, 2021 — High among the many priorities of newly-inaugurated US President Joe Biden are the challenges of an economy that appeared to be slowing down as the new year started, with the latest employment numbers looking bleak. A fourth-quarter slowdown in the US recovery from the horrendous second quarter could be attributed to the expiration of some of the bipartisan stimulus programs that were passed by Congress in March of 2020, or to the third wave of Covid-19, or to both factors. Even if Covid-19 abates during the course of 2021 and pent-up consumer demand then kicks in, the US faces challenges right now, in such areas as schools, infrastructure investment, state and local finances, and especially the fight against the pandemic itself.