May 27 2008
Welker’s daily links 05/26/2008
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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.
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