Monday, October 3, 2011

It Could Be Worse!

Sumner's 6%-6%-5%-5% is a very modest expansion in nominal GDP, leaving it far below the trend of the Great Moderation. However, it could be worse. Compare Sumner's proposal to the trend of the "Recovery" from the Lesser Depression.

The growth path the economy is on now is shown in brown, and Sumner's proposed growth path is in green. Of course, the Fed isn't even targeting the 4.3% average growth rate of NGDP since the trough. Moving to Sumner's growth path is not only a modest improvement, it will help prevent the economy from getting worse.

1 comment:

  1. It could be worse or could be better, but we just need to make sure we do everything with proper planning instead of trying anything over the top. I always keep it very straight forward which is greatly helped by OctaFX broker and with their mind blowing facilities and features including small spreads from 0.1 pips to high leverage up to 1.500 while there is also 50% bonus on deposit which is use able, so that helps me with working and makes me entirely relaxed with doing everything.