Teaching macroeconomics: IMF macroeconomic forecasts, how credible?

The International Monetary Fund’s projections for Gross Domestic Product GDP growth in Argentina since 1999, and in Venezuela since 2003, contain a pattern of large errors that raises serious questions about the objectivity of these estimates. In Argentina, the IMF overestimated GDP growth for 2000, 2001, and 2002 by 2.3, 8.1, and 13.5 percentage points respectively. … The direction of International Monetary Fund IMF forecasting errors was reversed after Argentina’s default on its public debt at the end of2001, and the subsequent collapse of its currency. Then the IMF began underestimating the strength of Argentina’s economic recovery. … the WEO estimates for the four years 2003 through 2006 came in low by 7.8, 5.0, 5.2, and4.3 percentage points respectively. … Argentina has now [2007] completed a five year economic expansion with the fastest growth in the Western Hemisphere, with real GDP adjusted for inflation growth of 47 percent.The IMF has also produced large and persistent underestimates of Venezuela’s economic growth for the last three years, and very possibly the current year. … the IMF projections for the years 2004, 2005, and 2006 underestimated GDP growth by 10.6, 6.8, and 5.8 percentage points respectively.

HT: Kevin Rodriguez.  via Political Forecasting? The IMF’s Flawed Growth Projections for Argentina and Venezuela – imf_forecasting_2007_04.pdf.

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Annihilation by Jeff VanderMeer

My friend Bill Sundstrom recommended it. Quite interesting to read. The style is different from the usual science fiction. Deeply moody and elliptical. The strange Area X the narrator finds herself in is like her “pool gone wild” that she “studied” as a child. As her grownups inadvertently created the ecosystem of the wild pool through their neglect, so “something” has created the ecosystem of Area X. Like a child who might suddenly find one morning that her parents have decided to move, so too does the now-grown biologist find a capricious and inexplicable force, seemingly moving her from camp to tower to lighthouse. There are borders that must be crossed, and when people cross borders, they are different. Is the whole thing a lyrical exploration of how we pass from childhood to the catatonic “grave” of adulthood? Don’t we all want to be back in that meadow where we spent what seems like ages observing a line of ants? Didn’t it seem like one moment it was the ants, then suddenly we were eating some carrots, and then it was dark and the covers were a fortress?  The narrator reminded me of Encyclopedia Brown… searching for clues, but easily distracted.

But in the end as a reader I got… well… bored.  Sorry Bill.  I think it is hard (for me at least) to get fully vested in a novel when characters don’t have names or motives (except for the heroine).  Definitely biological material for thought.  Bill likes lichens etc. so for him to have a slime mold be the alien I am sure was a wow moment.

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Paul Krugman… “look at Japan”

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Teaching macroeconomics: Upwards sloping AS curve

Sal Khan does a nice job explaining the graph itself and starting at 6:00 explaining the intuition/justification.

Short run aggregate supply: Justifications for the aggregate supply curve to be upward sloping in the short-run

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Over and over: Miranda July reading the part of the piano teacher

“I saw you.”  “I saw you,” she says.

You have to listen to The New Yorker podcast of her reading the story “Prizes” by Janet Frame.

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Teaching Macroeconomics: Taylor Rule monetary policy really is good

Our evidence that, regardless of the policy rule or the loss function, economic performance in rules-based eras is always better than economic performance in discretionary eras supports the concept of a Directive Policy Rule chosen by the Fed. But our results go further. The original Taylor rule provides the strongest delineation between rules-based and discretionary eras, making it, at least according to our metric and class of policy rules, the best choice for the Reference Policy Rule.In the current political climate, the proposed legislation will inevitably be interpreted in partisan terms because it was introduced in the House Financial Services Committee by two Republican Congressman. Not surprisingly, the first reporting on the legislation by Reuters was entirely political. This is both unfortunate and misleading. We divided our rules-based and discretionary eras with the original Taylor rule between Republican and Democratic Presidents. If we delete the Volcker disinflationary period, out of the 94 quarters with Republican Presidents, 54 were rules-based and 40 were discretionary while, among the 81 quarters with Democratic Presidents, 46 were rules-based and 35 were discretionary. Remarkably, monetary policy over the past 50 years has been rules-based 57 percent of the time and discretionary 43 percent of the time under both Democratic and Republican Presidents. Choosing the original Taylor rule as the Reference Policy Rule is neither a Democratic nor a Republican proposal. It is simply good policy.

via Guest Contribution: Taylor Rule Legislation | Econbrowser.

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Wussy Duo

Bandcamp alerted me that Wussy Duo has an EP available online. It’s pretty nice.

This was a limited hand-made release for Record Store Day 2013. The physical version is now out of print, so we’ve made it available digitally. Words on 1, 3, 5, 6 by Chuck Cleaver and 2, 4, 7 by Lisa Walker. Music by Wussy Duo, arrangements by the duo and John Curley. Recorded February 2013 by John Curley at Ultrasuede Studio, Cincinnati. Chuck played electric, acoustic and resonator guitars, hammond b3, piano. Lisa played electric and acoustic guitars, mandolin, hammond b3, vibraphone.

via Wussy Duo | Wussy.

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