It might be growing in real terms, but if nominal growth sinks below the zero line then the servicing of debts becomes onerous and can lead to liquidity traps that implode financial markets.. much prefer your even tone, professor. When you combine his dour and aggressive tone with his string of huge misses, he deserves to be professor of economics for the Daily Reckoning not NYU. My GDPbased recession probability index is constructed and review of its historical performance are available here. Nouriel Roubini is officially joke in my book.
Prices are down you say in ref to neg PCE? and if housing continues the trend evidenced by the last quarters of RI, think we will see some real house price declines as those official wage increases are not swelling the house buyer pool. It is intended as an alternative to the announcements made by the National Bureau of Economic Research, which, although highly authoritative and reliable, often fail to be made public until years after recession has started. To his discredit, hes predicted about of the last economic catastrophes. much prefer your even tone, professor.
If that floor in housing does not appear soon, that soft landing just might be quick sand IMO. But it is nominal, not real GDP that reflects the return on nation? s capital, and nominal GDP that points towards our ability to pay debts expressed in nominal terms should be viewed in similar fashion when analyzing growth. This index is not forecast of where the economy was as of 2006Q3, using the latest GDP data to form that assessment. How can you take guy like Roubini seriously?
Since almost all yields reflect real plus an inflationary component, it stands to reason that the ability to pay our bills. Prices are down you say in ref to neg PCE?
To his discredit, hes predicted about of the last economic catastrophes. By so doing one can understand, for instance, why deflationary environment can be so deadly to modernday, debtladened economy. really was pulling for him on the growth call for the last quarter and thought he made some decent points, even given what seems to be very poor record of prediction. This index is not forecast of where the economy was as of 2006Q3, using the latest GDP data to form that assessment. Background on how the recession probability index declined slightly from 9. 3 for 2006Q2 to 9.
Tags: ge, liquidity
