Arnold Kling  

My Economic Forecast

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It is here. This is a very difficult thing for me to do, because economic forecasting is done under the hydraulic paradigm that I think we should try to abandon. Anyway, a sample:


Traditionally, fiscal stimulus would increase the demand for automobiles and for other consumer durable goods. Growth in these sectors would then spill over into the rest of the economy. Today, however, many of the automobiles, televisions, and other durable goods that Americans buy are manufactured abroad. Much of the low-skilled labor that meets American demand for these goods works overseas. Thus, the ability to increase employment in this country by stimulating demand for consumer durables is not what it used to be.

...I expect that growth in real GDP will pick up strongly over the next year, as pent-up demand for new household formation and durable goods purchases produces a strong rebound. However, for reasons given above, employment growth will be sluggish while inflation pressures will slowly build.

We'll see. If I were you, I would give more weight to the views of Jim Hamilton than to mine. But do go back and read this lecture, linked to in my article.

It is interesting to see in the comments at the Pajamas Media site I am accused of being an Obama shill. If they also read this, they might think I'm even more in the tank for the Democrats.


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COMMENTS (3 to date)
Colin K writes:

I'll bet if you posted the article on the HuffPo, you'd be called out as a neocon mountebank.

It's all about signaling, not content. People are looking for a clear sign to determine whether you're going to give them bias confirmation or blasphemy. When you fail to lay the usual burnt offerings at the altar, the loudest members of the mob are liable to shout "Witch!"

This is why I pay very little attention to any blog that is exceptionally popular. The best way to build an audience is to give them a cocaine pellet every time they push the button.

david writes:

@ Colin K

I don't know; MR is very popular, but Tyler Cowen seems to enjoy enraging his audience with non-party-line comments.

Although reading all the sanctimonious I'm-so-disappointed-in-you-sir,-how-could-you-think-this comments is perhaps half the fun.

fundamentalist writes:

I expect stagflation next year with a rising stock market as the new money from the feds goes into assets instead of new production.

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