Top officials from two U.S. government economic-statistics agencies said their measurement tools are understating growth and overstating some components of inflation by modest amounts, while cautioning that this doesn’t explain the sluggish expansion in recent years....Bloomberg
Following weeks of stock market turmoil, China has confounded expectations that its economic growth would slow further in the second quarter, with gross domestic product rising by 7%.
Analysts had widely predicted that economic growth would dip from 7% in the first quarter to around 6.8% in the second.
However, GDP held steady, officials from China’s National Bureau of Statistics claimed on Wednesday morning. The figure still represents the lowest level of growth since the 2009 global financial crisis but is in line with Beijing’s official target for 2015 of “around 7%”.
“The national economy has been running within proper range and the major indicators picking up steadily, showing moderate but stable and sound momentum of development,” China’s National Bureau of Statistics said in a statement.Western economists flummoxed.
GDP Shows The Economy is Growing too Slowly to Improve EmploymentEconomic Policy Institute — Quick Takes
Time and time again, Japan sticks out like a sore thumb that those preaching the unsustainability of government debt want to sweep under the rug with the "Japan is a special case" story (a country fixed effect). But it seems more likely that Japan's economy is behaving exactly as you might expect given that it issues debt in its own currency. In other words, Japan is just a normal case pushed to the extreme.Tim Duy's Fed Watch
This five part series will explore at length (warning!) and in detail (another warning—wonk alert!) the MMT perspective on the debt ratio and fiscal sustainability. While the approach suggests a macroeconomic policy mix and strategies for both fiscal and monetary policies that most neoclassical economists currently believe are unsustainable, ultimately the MMT preference for a significant role for fiscal policy in macroeconomic stabilization is shown to be consistent with traditional neoclassical views on fiscal sustainability.
This third part discusses the historical behavior of US interest rates on the national debt in the context of fiscal sustainability.
Interest Rates vs. Growth Rates HistoricallyNew Economic Perspectives
Countries with high public debt tend to grow slowly – a correlation often used to justify austerity. This column presents new evidence challenging this view. The authors point out that correlation does not imply causality – it may be that slow growth causes high debt. They argue that policymakers should be wary – the case for cutting debt to boost growth still needs to be made.Read it at Vox.eu
