When the NBER’s Business Cycle Dating Committee draws the boundaries on the current recession, it’s unlikely to stand out as an especially long one. In fact, by the time the committee publishes the official start date, it could be past its end date. Why? Because it’s front-loaded. Spending has dropped so sharply in such a large portion of the economy that many types of activity have nowhere to go but up. And once activity starts increasing, even from nothing, that’s expansion, not recession. But the eventual business-cycle dates tell us little about our current situation. We could hit bottom ..read more

It’s usually a bad idea to stand too close to something—whether an object, a problem you’d like to solve or any number of other things—which could mean seeing all of the pixels but none of the patterns. That’s why we populate albums, frames and holiday cards with bird’s eye views and sweeping vistas. It’s why every city that aspires to “destination” status advertises this or that Tower, Arch, Needle or Eye. But if we look from too far away, we run a different risk of missing important information. That’s why we send probes, ships and occasionally scientists into outer space. It’s why we don’t ..read more

With hoops “out” and exponentials “in” (referring to March Madness, the 2020 pandemic definition), there’s a new, customary disclaimer on economics and financial sites. Mine says that I, too, knew nothing about infectious disease modeling only two months ago. But I’m catching up, just like everyone else. By now, I might have reached a “Dummies Guide” standard, and I’ll keep this article at about that level. So with that preface out of the way, I’ll first offer a health warning of sorts about a type of COVID-19 chart that’s popular with market bulls. Here’s a version that appeared in the New Y ..read more

“The fact that financial markets responded in very similar ways … lends credence to the view that these actions had the expected effects on markets and are thereby providing significant support to job creation and the economy.” —Ben Bernanke defends the idea that markets and the economy respond significantly to quantitative easing “… it will be like watching paint dry, that this will just be something that runs quietly in the background.” —Janet Yellen refutes the idea that markets and the economy respond significantly to quantitative tightening It doesn’t take much calculation to see that th ..read more

As recently as two weeks ago, it wasn’t clear which infectious disease experts had the best handle on COVID-19’s likely path. Among the optimists, one operation ran a model in February that showed the following maximum case counts by the “end of the epidemic.” (I’ve included the running case tally as well, using data from the Johns Hopkins dashboard.) With the benefit of hindsight, these well-intentioned forecasts were clearly too low. But I’ve shared them anyway because they support the premise for this article—that it seems time to listen to those experts who were telling us all along that ..read more

As recently as two weeks ago, it wasn’t clear which infectious disease experts had the best handle on COVID-19’s likely path. Among the optimists, one operation ran a model in February that showed the following maximum case counts by the “end of the epidemic.” (I’ve included the running case tally as well, using data from the Johns Hopkins dashboard.) With the benefit of hindsight, these well-intentioned forecasts were clearly too low. But I’ve shared them anyway because they support the premise for this article—that it seems time to listen to those experts who were telling us all along that ..read more

When the NBER’s Business Cycle Dating Committee draws the boundaries on the current recession, it’s unlikely to stand out as an especially long one. In fact, by the time the committee publishes the official start date, it could be past its end date. Why? Because it’s front-loaded. Spending has dropped so sharply in such a large portion of the economy that many types of activity have nowhere to go but up. And once activity starts increasing, even from nothing, that’s expansion, not recession. But the eventual business-cycle dates tell us little about our current situation. We could hit bottom ..read more

  “Ah, excuse me. Oh, will ya excuse me. I’m just trying to find the recession. Has anybody seen the recession?” Ask that question in a roomful of forecasters, and you’ll hear plenty of reasons why the next recession is dead ahead: the inverted yield curve, the tariff war, weak PMIs, the global manufacturing downturn. Events might eventually prove those recession forecasts to be correct, although I would say not until mid-2020 at the earliest, and a recession at that time remains just a possibility. I say that because we haven’t yet seen enough cause for alarm in the three areas that mos ..read more

“If I can’t picture it, I can’t understand it.” —Attributed to Albert Einstein “In order to properly understand the big picture, everyone should fear becoming mentally clouded and obsessed with one small section of the truth.” —Xunzi, Confucian philosopher There’s hardly a more hackneyed expression than “painting the big picture,” so I avoided using it in the first article in this series, even though the series is partly about, well, painting the big picture. In this article, though, I’ll throw in the towel. (Yup, I’m explaining my use of one hackneyed expression by using another.) As the pop ..read more

With hoops “out” and exponentials “in” (referring to March Madness, the 2020 pandemic definition), there’s a new, customary disclaimer on economics and financial sites. Mine says that I, too, knew nothing about infectious disease modeling only two months ago. But I’m catching up, just like everyone else. By now, I might have reached a “Dummies Guide” standard, and I’ll keep this article at about that level. So with that preface out of the way, I’ll first offer a health warning of sorts about a type of COVID-19 chart that’s popular with market bulls. Here’s a version that appeared in the New Y ..read more