Odds of a Double Dip: A Sampling of Opinions. Plus, Wolfers on Twitter
So by now you’re hopefully aware that the stock market completely bombed today. As I type, the Dow is down more than 500 points, its worst day since December 2008. (Official day’s tally is -512.76) And just like that it seems, the recovery is over. Well it was fun while it lasted; kind of.
Our resident macro economic guru Justin Wolfers has come up for air from his Twitter experiment (follow him @justinwolfers) and sent over this interesting sample of recent opinions from a handful of economically savvy folks, all giving their odds of the economy entering another recession:
Larry Summers: “at least a 1-in-3 chance.”
Marty Feldstein: “now a 50 percent chance.”
Ryan Avent: “more likely than not.”
Justin Wolfers: “40% chance and peak was 4 months ago” and “The guacamole has spoken.”
Don Kohn, Vincent Reinhart, Brian Madigan: “between 20% and 40%.”
Matt Yglesias: “precisely 31.22%.”
Brad DeLong: “the odds now are 50-50.”
Christy Romer: “The risks have gone up…compared to where we were six months ago.”
Bob Hall: “We certainly are in a more vulnerable situation now.”
Jeff Frankel: “not necessarily enough to push the probability over one half.”
Jay Carney: “we do not believe that there is a threat there of a double-dip recession.”
Justin has had a busy today on Twitter. Clearly, he flipped heads this morning. Here’s a sampling of what he’s been tweeting about: Read More »
Massachusetts Senate Race Update
In the last couple of hours, the InTrade prediction markets have moved sharply in favor of the Republican candidate Scott Brown to defeat Martha Coakley in the Massachusetts Senate race. Read More »
New Editors at Brookings
O.K., I’ll admit that I’ve done plenty of hand-wringing about the state of economics. And now I’m going to do something about it. This morning, Brookings announced that David Romer and I will be taking over as the new editors of the Brookings Papers on Economic Activity. We’ve got some pretty big shoes to fill Read More »
Co-author Confusion
When your co-author is your colleague and also your significant other, confusion often follows. Take this recent post by Arnold Kling on the causes of inequality, where he says: I think that Betsey Stevenson/Justin Wolfers marriages are another big factor. That is, when highly educated men start looking for wives who are stimulating companions as Read More »
Tax Cuts vs. Government Spending
As the Senate and the House look to reconcile competing stimulus plans, the big debate is whether to emphasize government spending or tax cuts. A new paper by the New York Fed’s Gauti Eggertsson argues that the risk of deflation should tilt the balance to government spending. Our current problem is deficient aggregate demand. The Read More »
Is Ignorance Really Bliss?
A regular blog reader, Mitch Kosowski, sent along an interesting question: “Is ignorance truly bliss? Are people with lower intelligence happier than those with higher intelligence?” Let’s start with a quick literature review. Here are the findings reported by Simpson, L. (2001): Lisa Simpson: “As intelligence goes up, happiness goes down. See, I made a Read More »
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