Recession, employment, risk modelling, and multipliers

The IMF says that things aren't so bad anymore! They're seemingly less bad than previously thought. They credit monetary and fiscal policy, apparently (I wonder how that'll go in the macro debates?). Feel free to check out the video of the press conference and the actual report.

Robert Reich makes sure we know what the employment numbers really mean.

The Baseline Scenario tells us about the problems of risk modelling. VaR = bad? I think people are being too harsh, though a company shouldn't use one model and nothing else to evaluate risk.

Via Thoma, Krugman talks about multipliers. He says 1.5 is a good estimate for right now.

Africa, college gards, unemployment and stocks, children, and cheap condos.

William Easterly challenges Sachs in development issues, pointing out problems with Sachs's arguments, and problems in aid money. I think Easterly's position is often overstated by others--Easterly doesn't think that we shouldn't provide aid to Africa, necessarily. Easterly, instead, recognizes that much aid to Africa is wasted, and helping Africa requires some non-monetary reform.

Mike Shedlock tells us how hard the job market is for new college graduates. This isn't anything new, I think, but it is important. We know the job market is bad, Mike just tells us that it's also bad for recent college grads.

Felix Salmon shows us that unemployment and stocks are more coincident than we may have thought. I'd like to see more historical data, though it'd be understandable for unemployment to be more coincident with large changes in stock markets, unemployment being a less sensitive indicator, and both potentially being affected by other economic phenomena. Still, I'm not sure I buy it. The decline in the stock market from 2007 - 2008 alone seems within normal fluctuations and doesn't quite justify the rising unemployment rate.

Nancy Folbre warns us that kids may be the most severely effected by the recession. Parents' job loss can lead to instability in the home, which hurts education and hurts physical health due to lower quality food.

The amazing Tata is making $8000 condos. I wonder if this sort of thing will catch on in other parts of the world, as land becomes more scarce. Certainly, I would think this sort of thing would be popular among college students.

Maternity leave, Jamaica, Zimbabwe, the world, Venezuela, and the US federal budget

The Economic Policy Institute points out that the United States is severely lacking in maternity leave benefits. I wonder how that affects our national birth rate.

I've heard a lot about problems in Jamaica recently--I was surprised, and I think this article reflects why I was surprised. Socialism doesn't work.

The IMF provides an update on Zimbabwe. As you might expect, things aren't going so well there.

Simon Johnson reminds us that the rest of the world matters, too. Since the US economy is 20-25% of world output, they have an impact on us.

Speaking of the rest of the world, there's apparently some research showing how Venezuela's Chavez has hurt his opposition. This isn't a surprise to those who have been following Venezuela, but it's nice to see the research.

Lastly, the Obama Administration takes a jab at trimming the federal budget.

Krugman on the IMF and stress tests.

Calculated Risk reports on a Krugman interview. I have to say--Krugman might be right on the state of the economy and on the state of the stress tests, but what he says in the interview is quite misleading.

First:

"We have some real real problems. They are not going to go away through self-fulfilling optimism. One of the little things that has been reported is that the IMF now - International Monetary Fund - has upped its estimate of losses on bad loans to $4 trillion."

The IMF upping its losses estimate isn't a problem. Forecasts aren't problems. The causes of low forecasts can be problems. That is to say, the bad stuff happened before, and the forecasts reflect the past. Bad stuff may also happen in the future, but the IMF forecast only reflects the scale of some problem.

Second:

"I think we can say pretty clearly that if the stress tests were saying that every thing was fine, they probably wouldn't be eager to postpone the release of that."

Maybe, maybe not. Remember that good results of the stress tests don't mean that we have no problems. Postponing the release of the results of the stress tests may be the treasury's way of keeping optimism in check (as Obama has been trying to do, recently). Or, they may want to make sure to have their report as complete as possible before releasing any information, which is important for both good news and bad news. Really, we can't say anything pretty clearly about the postponement of the stress tests.

Technology, the Fed, the global recession, hiring, and trade

Lynne Kiesling has some interesting posts on smart grid technology. I'm looking forward to this stuff in the future.

Ben Bernanke says that he is glad to work at the Federal Reserve. "Economics is only useful to the extent that it helps people..."--very true.

Academic hiring is down, unsurprisingly. People tend to think lawyers can still make money, but apparently law firms are laying off lawyers, too.

U.S. trade deregulation provided for around 25% of trade growth. Seem obvious? Well, maybe not to people who are advocating protectionist policies.

Global Recession Status map. On the other hand, Chavez says that the global recession has not affected Venezuela.

Christina Romer's Lessons from the Great Depression.

Another thought on the unit-root-vs-trend-stationary Krugram-Mankiw debate, this time from David Altig at the Federal Reserve Bank of Atlanta.

Research on the question: Does Money Bring Happiness? Some research says yes!

James Kwak provides Nationalization for Beginners.

Dani Rodrik on the problem with economists. He says we need to use multiple models, not just the one we believe.

Geithner starts to get some help. Geithner has been scrambling to get stuff done.

The IMF reports the costs of the financial crisis.