Jim,
Let's keep in mind that there is a crucial
difference between a "slowdown" (reduction
in the rate of still positive growth) and a "recession,"
actual negative growth. One of the reasons why
those downturns go fast once they start is for the
oldest of Keynesian reasons, one rapidly being
purged from the new wave textbooks following
Mankiw, the multiplier effect.
BTW, the unemployment rate in many Western
European countries is now lower or nearly as low
as in the US, although it is still considerably higher
in three big ones, Germany, France, and Italy, thus
making the overall EU average notably higher.
Barkley Rosser
-----Original Message-----
From: Jim Devine <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
Date: Monday, December 04, 2000 12:21 PM
Subject: [PEN-L:5469] Re: Re: Re: the downturn
>Barkley wrote:
>> Funny thing is that the latest forecasts in
>>The Economist have positive growth rates for
>>the next year for all the leading economies.
>
>Even positive growth rates can be a problem if the growth isn't fast enough
>to absorb increases in the labor force and deal with the fall in demand
>that occurs (cet. par.) as labor productivity rises.
>
>>But, it does seem that things are slowing down.
>>And, historically, downturns have always been
>>badly forecast, and even the short ones tend
>>to go down sharply.
>
>forecasting seems a matter of choosing which macro-variables are best to
>extrapolate.
>
>in a different message, Barkley wrote:
>> For what it's worth (not necessarily all that much),
>>in this mornings macroseminar in my department,
>>the most right-wing member who is also a professional
>>investment adviser declared that the recession in the
>>US actually began on Oct. 1.
>
>Yesterday's L.A. TIMES had an article by a conservative (John Makin of the
>American Enterprise Institute) predicting a serious recession and another
>set of conservatives (Martin and Kathleen Feldstein) arguing that it's good
>that the US economy is slowing down.
>
>Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
>
>
