Is Stanford's John Taylor -- who, according to this measure is the 10th most influential economist in the world -- exhibit A for the corrosion that occurs when politics meets academic economics? In a blog post last week titled "National Accounts Show Stimulus Did Not Fuel GDP Growth," Taylor writes: Along with the news that real GDP growth improved from -0.7 percent in the second quarter to 3.5 percent in the fourth quarter, the Bureau of Economic Analysis (BEA) released detailed National Income and Product Account tables...These tables make it very clear that the $787 billion stimulus packag
Dan Gross: Rising U.S. stocks are a sign of growing foreign markets. CBO brief summarizing 28 gov't programs in support of housing. Mark Zandi says small business needs public help. Fed could face pressure from lawmakers to extend housing support. Being sad may be good for you.
Judging from Jeopardy, economics needs a lot more popularizing. Is America's long-term unemployment problem looking downright European? The 'did Lehman cause the crisis?' debate continues. Roubini says "reckless" U.S. policy will lead to biggest bubble ever. Nate Silver gives 5-to-2 odds that gay marriage in Maine will be affirmed. David Warsh: Carmen Reinhart is the most influential female economist around.
It's a truism that the average investor (i.e. one who doesn't get paid to pick stocks) is better off putting his money into a passive index fund than paying a pro to choose stocks for him.
Steve Levitt gets no love from his own school. Top CEOs summoned by the Fed over pay. Krugman and Sumner agree, for once: The GDP numbers need to get a lot higher. Cowen on the foreign-ization of academic economics. Dan Gross: Reports of newspapers' death greatly exaggerated.
That's the conclusion of a new St. Louis Fed study by David Wheelock and Paul Wilson. In the two decades between the mid-80's and 00's, the number of commercial banks fell by 50% while the average size per institution surged by an inflation-adjusted 500%.
The Fed's not about to take away the punch bowl. Correlation of the day: A Phillies World Series win could be bad sign for the economy. Justin Fox: Are finance professors to blame for crisis? Before Freakonomics, there was Steve Landsburg, who is now blogging. Has Obama soothed our animal spirits? Somebody's still creating CDOs.
The big market paradox of the past few months has been the differing signals coming out of the stock and U.S. Treasury markets. Stock prices have been roaring since early March, up over 50%. That should be a strong signal that economic conditions are on the upswing. But even though today's GDP report does show that the recession may have ended in the second quarter, Treasury yields have remained flat since the spring -- showing that there are some big doubts about the strength of a recovery. But Paul McCulley at Pimco says that this isn't really any sort of paradox at all.
Leonhardt on what one bad Obama proposal implies about future deficits. Pimco's Bill Gross says assets are overvalued worldwide. Roadsigns: Manufacturers are still cutting inventories; new home sales fall. Wharton's Jeremy Siegel defends efficient markets. On the intersection of politics and physics.
A new NBER paper (ungated version) from Stanford's Caroline M. Hoxby finds that even as it's grown increasingly difficult to get into a top university, the average selectivity of all colleges has actually fallen over time: students used to attend a local college regardless of their abilities and its characteristics. Now, their choices are driven far less by distance and far more by a college's resources and student body. What's interesting is that the change in selectivity is driven largely by smarter students choosing to go to universities with similarly smart students.