The Council of Economic Advisers just released an interesting paper examining the macroeconomic harm from the government shutdown and debt limit brinksmanship. To do so, they created a Weekly Economic Index from data that are released either daily or weekly (and weren’t delayed by the shutdown). These data include measures of consumer sentiment, unemployment claims, retail sales, steel production, and mortgage purchase applications.
The headline result: They estimate that the budget showdown cost about 120,000 jobs by October 12.
Looking ahead, I wonder whether this index might prove useful in identifying future shocks to the economy, whether positive or negative. As the authors note:
In normal times estimating weekly changes in the economy is likely to detract from the focus on the more meaningful longer term trends in the economy which are best measured over a monthly, quarterly, or even yearly basis. But when there is a sharp shift in the economic environment, analyzing high-frequency changes with only a very short lag since they occurred can be very valuable.
P.S. I am pleased to see CEA come down on the right side of the “brinksmanship” vs. “brinkmanship” debate.
Reblogged this on owenzidar.
Of course the “right side” is the one you agree with. To think is to ponder, not to work from a desired result backwards.
Where is the study on the economic harm the government causes on a daily basis just by functioning as a bloated morose inteloper sucking the wealth of its citizens away and repurposing it to the banks and the corporations who own the government?
An economist who can’t understand numbers is like a writer who doesn’t understand language. Is it a problem of understanding or is it being paid not to understand?
The harms our government inflicts on the citizens who pay for it are real, from the IRS to the NSA surviellance state, to corporate prisons and mandated urine testing. You don’t have to scratch deep to find the monster consuming us with worthless laws and a prison of fear and a future without hope based on a currency of fools.
What hath the FED wrought? It looks like chaos and slow motion collapse in a prison state. Where are our freedoms, where is our economic choice?
We are prisoners of a fiat currency becoming more worthless day by day.
“The purpose of the state is to terrorize its citizens.”.. Aldous Huxley