PeakTrader.com Forum Index PeakTrader.com
Economics, Portfolio Optimization, and Technical Analysis
 
 FAQFAQ   SearchSearch   MemberlistMemberlist   UsergroupsUsergroups   RegisterRegister 
 ProfileProfile   Log in to check your private messagesLog in to check your private messages   Log inLog in 
Log inFast Charts

Output Gap

 
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles
View previous topic :: View next topic  
Author Message
administrator
Site Admin


Joined: 28 Dec 2005
Posts: 11966

PostPosted: Tue Feb 10, 2015 7:15 am    Post subject: Output Gap Reply with quote

PeakTrader:

The output gap may be greater, because older workers are working longer.

“In 1975, nearly 35 percent of the labor force was 55 and older, but that figure had fallen to about 29 percent by 1993.

Since then, labor force participation for this group has risen steadily, peaking at 40.5 percent in 2012.

In 2013, it barely declined, with 40.3 percent of older workers still in the labor force.

Workers 55 and older have among the lowest unemployment rates, and those under 35 among the highest.”

http://www.cleveland.com/business/index.ssf/2014/06/older_workers_stay_on_job_past.html

****

The Rage says: “where is the gdp surge showing the 2014 employment surge?”

Maybe, it went to reduce the budget deficit.

Here’s a couple of charts:

http://taxfoundation.org/blog/cbo-budget-deficit-will-shrink-it-continues-climb

****

To assume this is not a cyclical phenomenon is to assume there was a sudden and sustained downshift in potential output.

The output gap should’ve been closing, at least slowly, since 2009.

The explanation why that didn’t happen seems to be extraordinary factors weighing on growth.

We haven’t really recovered after the trough in 2009. It’s approximately an L-shaped “recovery.”

****

Some factors why the economy didn’t recover may be the housing bust, terminating “too-big-to-fail,” the student debt boom, ACA, excessive regulations, and more progressive taxes (from “negative taxes” to “middle class” taxes, along with lower-income subsidies).

Also, there may be a slow structural decline in potential output, in part, because of a decline in higher-skilled workers, while the Baby-Boom generation retires.

Education Is the Key to a Healthy Economy
April 30, 2012

“California…once a leader in education, it is now ranked behind 40 other U.S. states in math achievement, placing it at the level of Greece.

But the averages mask the truly sad story in the Latino population, soon to become California’s dominant demographic group.

Hispanics attending school in California perform no better than the average student in Mexico, a level comparable to the typical student in Kazakhstan.

An alarming 43% of Hispanic students in California did not complete high school between 2005 and 2009, and only 10% attained a college degree.”

****

Federal employment is too small to make much of a difference:

http://www.opm.gov/policy-data-oversight/data-analysis-documentation/federal-employment-reports/historical-tables/total-government-employment-since-1962/

Non-farm employment, which excludes government workers, is much bigger:

http://research.stlouisfed.org/fred2/series/PAYEMS/

---

Not Posted:

Here's another view (which also cites Menzie Chinn):

"Using the 1870-2007 trend, there doesn’t appear to be anything particularly unusual about the projected path of GDP per capita."

My comment: The assumption is Europe and Japan rebuilding their economies and the U.S. Information Revolution boosted U.S. per capita real GDP above normal growth, from 1946-2007.

https://growthecon.wordpress.com/2015/02/10/is-the-u-s-really-below-potential-gdp/

****

baffling, how would Obama have “the luxury of adding 1.5 million public sector jobs through this recovery rather than austerity induced half a million job loss.”?

The weak recovery from the severe recession affected government employment and tax revenues.

****

baffling, you were talking about Obama didn’t have the “luxury” of public sector jobs, like Reagan and Bush.

Without a recovery, Obama wouldn’t have that luxury.

He certainly tried harder than Reagan or Bush:

Chart of federal surpluses or deficits as a percent of GDP:

http://research.stlouisfed.org/fred2/series/FYFSGDA188S

****

baffling, you won’t accept the fact that when government, led by a rigid ideologue with little understanding of economics, adds anti-growth policies to pro-growth policies, the result can be expensive and weak growth.

****

baffling, two anti-growth factors, since 2009, I cited recently are:

1. Piling on more regulations, e.g. in finance, health care, energy, housing, transportation, environment, etc. on top of the $2 trillion a year in federal regulations, which the economy has been unable to absorb.

2. Creating greater disincentives to work through more progressive taxes (from “negative taxes” to “middle class” taxes) and more welfare payments.

---
Back to top
View user's profile Send private message
Display posts from previous:   
Post new topic   Reply to topic     PeakTrader.com Forum Index -> Articles All times are GMT - 8 Hours
Page 1 of 1

 
Jump to:  
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot vote in polls in this forum


Powered by PeakTrader 2.0.8 © 2001, 2002