In a November 26 commentary, Nobel Prize-winning economist Paul Krugman lamented that the standard economics of most of the postwar era appears to have been forgotten, leading to a “Dark Age of macroeconomics,” which is preventing the government from taking appropriate actions to deal with the economic crisis.
On November 24, the Congressional Budget Office issued its quarterly report on the impact of the Recovery Act. It estimates that GDP is between 1.4 percent and 4.1 percent higher, and between 1.4 million and 3.6 million jobs have been created as a consequence.
In a November 19 speech, Federal Reserve Board chairman Ben Bernanke discussed the limitations of monetary policy to stimulate the economy without support from fiscal policy. Said Bernanke: “A fiscal program that combines near-term measures to enhance growth with strong, confidence-inducing steps to reduce longer-term structural deficits would be an important complement to the policies of the Federal Reserve.”
On November 18, the Council of Economic Advisers issued its quarterly report on the impact of the Recovery Act. It finds that the level of GDP is 2.7 percent higher and employment at least 2.7 million higher as a result of the legislation.
A November 16 study by economist Michael Mandel argued that adjustments to regulatory policy should be considered as countercyclical stimulus measures.
And on November 16, the European Central Bank published a working paper that examined the impact of fiscal stimulus in Europe. It found that in 4 out of 5 economic models examined stimulus was actually contractionary.
On November 14, the Los Angeles Times hosted a symposium with 8 economists, including me, on how to stimulate economic growth.
On November 12, the Journal of Economic Perspectives published an article by economists Alan Auerbach, Bill Gale, and Benjamin Harris examining fiscal policy in light of recent experience. They say that it has altered economists’ knowledge of the effects of fiscal policy in a number of ways.
In a November 10 report, ProPublica was skeptical of Obama administration claims that most stimulus projects came in on time and under budget.
In a November 7 commentary, economists Joshua Aizenman and Gurnain Kaur Pasricha forecast debt-to-GDP ratios for the OECD countries. They argue that effective fiscal stimulus may not add to the debt burden by raising economic growth. A longer version of this commentary is available here.
On October 27, the House Committee on Transportation and Infrastructure published a study showing that 91 percent of the public works projects funded by the stimulus legislation were under contract.
I last posted items on this topic on November 3.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Read his most recent column here . Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).