sp6r, I have no idea where he got those numbers. What is his assumed trend rate of growth in RGDP? (I.e. the rate that leaves unemployment unchanged.)

Lorenzo, That sounds right.

]]>Using the numbers Scott reports, in the early 1980s, every 1% of real GDP growth reduced unemployment by 0.44 percentage points. In the early 1990s, every 1% of real GDP growth reduced unemployment by about 1/2 as much, or 0.26 percentage points. And currently, every 1% of real GDP growth has reduced unemployment by only .04 percentage points, fully a 10 fold decline since the early 1980s. According to Scott’s data, if since the 2nd quarter of 2009 the US had grown just as fast as it had in the early 1980s, the fall in unemployment would have been just 0.28%. The notion that all we’ve seen is slower growth is decisively falsified by the very evidence he presents for it.

]]>Beckworth claims that NGDP growth was above trend 2002-2006 (I believe he uses an alternate measure though Gross Domestic Purchases, maybe?). Your graph only goes to 2003, so perhaps you agree on the 2004-2006 period.

I am interested to know what, if any, technical differences there are in your approaches. If monetary policy truly has such a narrow policy success path between financial debt crisis creation and subpar job creation, it seems like we have a problem (or two).

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