Ed Dolan's Econ Blog

Archive for September, 2012

  • Latest GDP Revision Carries a Mixed Message for the Election: Economy Weak, but Corporate Profits Strong

    The revised third estimate of GDP for Q2 2012, released Thursday by the Bureau of Economic Analysis, carries a mixed message for the election campaign. The revised data show real GDP growing at an annual rate of just 1.3 percent in Q2, down from the already weak 1.7 percent of the previous estimate. The slowdown […]

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  • Looming Demise of Wind Power Subsidy Shows the Need to Rethink Both Energy and Tax Policy

    Wind power has been a success story of green energy. After several years of rapid growth, it now accounts for about 3 percent of all electricity produced in the United States. It has benefitted from federal support, but that support is scheduled to end on December 31, throwing the industry into a crisis of layoffs […]

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  • Could QE3 Cause the Fed to Go Broke?

    Each time the Fed undertakes a new program of quantitative easing, questions arise about the possible impact on its solvency. I addressed that concern in November 2010, at the time QE2 was announced. Here is an updated version of that post that looks at the solvency issue in the context of QE3. The Fed’s new […]

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  • Does the August Inflation Spike Mean QE3 was a Mistake?

    One day after the Fed announced a new program of quantitative easing (QE3), the BLS reported that headline inflation spiked to an annual rate of 7.44 percent in August. Does that mean that QE3 was a mistake? Superficially, it might seem so. After all, the announced justification for QE3 was that both parts of the […]

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  • Quantitative Easing: A Tutorial

    On September 13, 2012, the Fed announced a further program of quantitative easing, or QE. The program, which we will all call by its unofficial name, QE3, will consist of purchases of some $40 billion in mortgage-backed securities each month plus continuation of some existing asset purchase programs. We are told that QE is the […]

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  • August Job Numbers are a Disappointment for Democrats

    The August job numbers released today by the BLS will come as a disappointment, especially to Democrats who were hoping for a strong headline number during their convention week. The U.S. economy created just 96,000 new payroll jobs last month. An increase of 103,000 private-sector jobs was partly offset by a loss of 7,000 government […]

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  • Simplicity vs. Compexity, Goodhart’s Law, and the Financial Regulator’s Dilemma

    One of the most interesting papers to come out of the Jackson Hole conference this year, both in title and content, was “The Dog and the Frisbee.” The paper, presented by Andrew G. Haldane, Executive Director for Financial Stability at the Bank of England and co-authored by Vasileios Madouros, an economist at the same institution, […]

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