Princeton economist Alan Blinder: The Economy Has Hit Bottom

WSJ:

How’s the economy, you ask? I have the proverbial good news and bad news, but in this case, they’re exactly the same: The U.S. economy appears to be hitting bottom.

First, the good news. Right now, it looks like second-quarter GDP growth will come in only slightly negative, and third-quarter growth will finally turn positive. Compared to the catastrophic decline we recently experienced-with GDP dropping at roughly a 6% annual rate in the fourth quarter of last year and the first quarter of this year-that would be a gigantic improvement.

Furthermore, there is a reasonable chance-not a certainty, mind you, but a reasonable chance-that the second half of 2009 will surprise us on the upside. (Can anyone remember what an upside surprise feels like?) Three-percent growth is eminently doable. Four percent is even possible. Surprised? How, with all our economic travails, could we possibly mount such a boom? The answer is that this seemingly high growth scenario isn’t a boom at all. Rather, it follows directly from the arithmetic of hitting bottom.

Related Posts:

Leave a Reply


two + = 7