In April 2018 Congressional Budget Office issued a report on the state of the federal budget in light of the “Tax Cuts and Jobs Act” enacted in December 2017, the “Bipartisan Budget Act” enacted in February 2018, and the “Consolidated Appropriations Act” enacted in March. The CBO…
In the closing paragraph of my last entry I offered two hypotheses about the post-2008 US economy. The first is that “real GDP has shifted to a lower path because of a shrinkage in the economy’s productive capital stock — a problem that better monetary policy (not…
The familiar chart below illustrates the depth of the decline in real output during the 2007-09 Great Recession (the shaded period), and the failure of the recovery to return real output to its “potential” path (in other words, to eliminate the estimated “output gap”) during the subsequent…