May 27 2008
Welker’s daily links 05/26/2008
Published by Jason Welker at 12:30 am under
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How low can America grow? | Free exchange | Economist.com
A question I have been pondering is whether slow GDP growth combined with high inflation actually means that negative GDP growth. In other words, with GDP growing around .2% and the price level at around 4%, is the US actually experiencing negative real GDP growth of -3.8%? According to this blog post, NO:
“it’s not true that high inflation means real output growth is negative, since the GDP figure quoted is itself a real figure. (Although many observers, like Barry Ritholtz, believe that official inflation numbers are understating inflation). But discussions about whether a recession might be u-, or v-, or curlicue-shaped seem a bit off at the moment. Instead, the economy is essentially flatlining just a hair above zero growth. “
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This is a cool little tool for calculating the rate of inflation. Plug in any two years and see how much “buying power” a dollar had in one year relative to another. Great for illustrating Consumer Price Index. From http://www.bls.gov/CPI/
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Buffett says U.S. is in recession – May. 25, 2008
“I believe that we are already in a recession,” Buffet was quoted as saying. “Perhaps not in the sense as defined by economists. … But people are already feeling the effects of a recession.”
“It will be deeper and longer than what many think,” he added.
About the author: Jason Welker is a teacher at Zurich International School in Switzerland, where he teaches Advanced Placement and International Baccalaureate Economics. In addition to maintaining numerous online resources for economics student and educators, Jason developed the online version of the IB Economics course for Virtual High School and is currently authoring a textbook for IB Economics students for Pearson Baccalaureate which will be available in Spring of 2011. His economics student wiki won the 2007 "Best Educational Wiki" award from the "EduBlog Awards". Related posts:
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