General Discussion

Jim Lane

(11,175 posts)

33. It's the two meanings of "recession"

Sat Apr 27, 2013, 01:12 PM

Apr 2013

The public uses it to mean "hard times" -- high unemployment or the like. Economists use it to mean "downtrend" -- two consecutive quarters of negative real economic growth. (In this context, "real" means "adjusted for inflation" -- two consecutive three-month periods in which the GDP fell from the previous quarter's GDP, once you value all the goods and services produced in each quarter by the same standard, not by then-current prices.)

We are not currently in a downtrend. The recovery has been weak by historical standards, though, and we still have unacceptably high unemployment. Further stimulus measures are needed.

Tax cuts do have a stimulative effect. In terms of how much stimulus bang you get for each deficit buck, though, tax cuts are less effective than other measures. Even among spending measures, the stimulative effect differs. For example, unemployment insurance payments are at or near the top of the list, because the beneficiaries spend almost all that money fairly quickly.

Edit history

Please sign in to view edit histories.

Recommendations

0 members have recommended this reply (displayed in chronological order):

33 replies

= new reply since forum marked as read

Highlight:

Lame-ass response by Rogoff-Reinhart in today's NYT OpEd piece... [View all] CTyankee Apr 2013 OP

I'd expect them to be a little more contrite. MannyGoldstein Apr 2013 #1

Actually, good for them. In any case, we should not become the defenders of astronomical debt. reformist2 Apr 2013 #2

the problem with the "astronomical debt" argument is that it plays into the CTyankee Apr 2013 #3

We need to tell the truth - huge debt *is* bad, but higher taxes on the wealthy is the solution. reformist2 Apr 2013 #15

Increasing taxes is the opposite of a keynesian stimulus. mathematic Apr 2013 #13

Well, I thought we were recovering and no longer in a recession. Isn't that what Obama said? reformist2 Apr 2013 #14

It's the two meanings of "recession" Jim Lane Apr 2013 #33

It depends on who's taxes you're talking about. Alva Goldbook Apr 2013 #31

No, Keynesian stimulus does not suggest increased taxes during a downturn. lumberjack_jeff Apr 2013 #19

We're not in a downturn. Or are you saying our party lied in 2012? reformist2 Apr 2013 #20

Yes. Our party lied in 2012 lumberjack_jeff Apr 2013 #21

Median Househols Income... whttevrr Apr 2013 #28

"household" and "family" are two different things. lumberjack_jeff Apr 2013 #32

You increase the taxes in the good times. LiberalAndProud Apr 2013 #25

Yeap you can increase gov spending and decrease taxes on the middle class too uponit7771 Apr 2013 #26

Don't know what Krugman will say, Benton D Struckcheon Apr 2013 #4

well, they had to get the results they desired SOMEHOW! CTyankee Apr 2013 #5

Latest GDP results and interpretation Benton D Struckcheon Apr 2013 #6

PK's response just posted: http://krugman.blogs.nytimes.com/ CTyankee Apr 2013 #9

How did something that was not peer reviewed ever get the attention it did? Sanity Claws Apr 2013 #7

It's hard for a peer to review a manuscript when the authors don't reveal their data. byeya Apr 2013 #8

That such a situation drives crucial policy decisions for whole governments CTyankee Apr 2013 #12

Because edhopper Apr 2013 #11

Krugmans comments are now up BootinUp Apr 2013 #10

Don't miss the reader comments -- markpkessinger Apr 2013 #16

R&R have managed some serious jujitsu, making Dems defend high debt and deficits... reformist2 Apr 2013 #17

That's the problem. The public has been mesmerized by repubs harping on CTyankee Apr 2013 #18

It's not about "defending debt and deficits . . ." markpkessinger Apr 2013 #22

it's just fucking common sense librechik Apr 2013 #23

Unfortunately, too many people buy into the household budget analogy . . . markpkessinger Apr 2013 #24

exactly--what family has the ability to print money or invent a job librechik Apr 2013 #29

Not to mention . . . markpkessinger Apr 2013 #30

And still they ignore Krugman... Sekhmets Daughter Apr 2013 #27