By the way, here’s a graph of actual real U.S. GDP and its major components relative to their long-term (1970–2007) trendlines through the end of 2013. Note how things fell off a cliff in the recession. GDP, consumption, and government spending are all about 15% below where they’d be had they continued to grow in line with their long-term trend. (The hysteria over out-of-control government spending looks ludicrous in the light of this graph.) Investment is about 25% below where it “should” be. thanks largely to the housing collapse, though it’s staging something of a recovery. The other components have yet to begin closing the gap, because the recovery’s been so weak.
Posted by: Doug Henwood | March 31, 2014
GDP etc. in a deep funk
Posted in U.S. macroeconomy | Tags: consumption, gaps, GDP, government spending, growth, investment
Responses
Leave a Reply
Categories
- announcement
- autobiography
- begging
- Bernie
- clarification
- complaint
- conference talk
- corporate behavior
- debt
- education
- Elizabeth Warren
- fact-check
- fascism
- fiscal politics
- gloating
- gratitude
- Hillary
- housing
- Interview
- job market
- journalism
- labor
- links
- money
- Obamacare
- obit
- observation
- oldie
- other articles
- photojournalism
- pictures
- polemic
- poll
- presidential politics
- proposal
- query
- questions
- quote
- radio
- radio commentaries
- report
- research roundup
- self-promotion
- social democracy
- social spending
- socialism
- statistics
- stock market
- talk
- Trump
- U.S. macroeconomy
- Uncategorized
- unions
- update
- video
Those are useful graphs Doug, thanks, but I don’t know how you produced them, because how did you calculate the 1970-2007 trend line? In my Phd studies in 1987 I looked at the difference between actual GDP and what real GDP would have been, if it had continued to grow at the same average rate it did in 1947-1973 (the average rate was about 4%). I don’t think it makes so much sense to use 1970-2007 as a basis for the trend line, since that period already covers different era’s of slower and faster growth.
By: Jurriaan Bendien on April 19, 2014
at 7:17 am
Trend lines are pretty crude measurements but this one just highlights how weak the recovery has been.
By: jeff on April 21, 2014
at 7:54 am