Stanford University economist John Taylor, an adviser to Mitt Romney, insists that the US recovery from the current recession has been exceptionally weak, and places the blame on Barack Obama. Martin Wolf shows – I think conclusively – that the distinguished John Taylor is simply wrong. I will not attempt to summarize what Martin wrote, but urge everyone to read it. In the meantime, here is a reader’s comment on Martin Wolf’s blog entry.
Danny Barrs wrote on October 29 8:09pm:
Unfortunately there is not much chance of the mass of the US electorate reading this let alone understanding it. But that does not mean it wasn’t worth doing and worth doing well. Thank you, Martin.
Martin Wolf, “You can’t measure an economy’s performance on recovery alone“, Martin Wolf’s Exchange, 29 October 2012.
Mr Barrs is perhaps too pessimistic. Martin’s blog is not easy reading, but should be understandable to any intelligent person, with or without training in economics and statistics.
A reminder: there is unlimited access to all FT blogs, but free registration is required of non-subscribers.
If, after reading Martin’s blog, you would like to see still more evidence that John Taylor’s assertion is wrong, I suggest that your read three excellent columns published by Vox, where access is always free. These columns contain a wealth of charts. I have posted one chart from each, to stimulate you to access the full column.
World industrial production
This column updates the original Vox columns by Barry Eichengreen and Kevin O’Rourke comparing today’s global crisis to the Great Depression. The three previous columns have shattered all Vox readership records with over 450,000 views. This latest edition covers up to February 2010 showing that, while there is cause for optimism, there is no room for complacency.
Barry Eichengreen and Kevin H O’Rourke, “What do the new data tell us?“, Vox, 8 March 2010.
Average annual unemployment rate in the aftermath of systemic banking crises in the US, 1892-2011
The strength of the US recovery has become a political issue in the presidential election. The US is doing better than other advanced economies, but famous economists associated with the Romney campaign claim this is not good enough. The US, they argue, is different. Here, the masters of the ‘this time is different’ research genre – Carmen Reinhart and Ken Rogoff – argue that US historical performance is not different when it is properly measured, so the economy’s performance is better than expected.
Carmen M Reinhart and Kenneth Rogoff, “This time is different, again? The US five years after the onset of subprime“, Vox, 22 October 2012.
The pink range indicates the expected recovery path for the US and the UK, respectively. The US exceeds expectations; the UK does not.
Is the sluggish growth we see in the North Atlantic economies normal? This column updates the authors’ 5 October 2012 column to include an analysis of the UK. The original column looks at 14 advanced economies over the past 140 years and shows that larger credit booms during expansions have been systematically associated with more severe and prolonged slumps. Measured against the historical benchmark, the recent US recovery has been far better than could have been expected. The same cannot be said of the UK’s growth performance.
Moritz Schularick and Alan Taylor, “Fact-checking financial recessions: US-UK update“, Vox, 24 October 2012.
