Borağan Aruoba, Francis Diebold, Jeremy Nalewaik, Frank Schorfheide, Dongho Song, 03 December 2013

GDP can be estimated by measuring either expenditure or income. Since a penny spent is a penny earned, both methods should give the same answer, but there is substantial measurement error in both estimates. This column presents a new method of measuring US GDP that blends these two estimates. According to the new measure, GDP growth is about twice as persistent as the current headline measure implies. The new measure also makes the current recovery look stronger, especially in 2013.

Martin Ravallion, 26 March 2010

The World Bank’s estimate of China’s real GDP per capita was revised down by 40% in 2005. This column explains how economic growth impacted price structures in developing countries -- impacts that had not been factored into how old PPPs were updated prior to new price surveys. It argues that large revisions could be avoided by using better economic models for predicting PPPs.

Enrique Mendoza, Vincenzo Quadrini, 14 November 2009

Can we blame financial globalisation for the severity of the current crisis? This column says that financial integration spread the negative banking shock that originated in the US across countries, thereby making the US better off at others’ expense.

Andrew Rose, 01 August 2009

Less synchronised business cycles would be good news for the world economy, allowing for more stable global growth and opportunities for risk-sharing across countries. However, is decoupling fact or fiction? This column says that, contrary to much current commentary, there is no downward trend in synchronisation.

Nicholas Crafts, 11 July 2008

Standard policies to redress Europe's productivity problems keep politicians in their comfort zone: support for the “knowledge economy” and more R&D. More progress would come if they accepted and facilitated the “dark side” of productivity improvement – the exit of high-cost producers and re-deployment of labour.

Philip Lane, 01 July 2008

Ireland switched from 5% growth in 2007 to negative growth in 2008. Ireland’s leading macroeconomist discusses that causes and consequences for national policy. A thorough reform of tax and spending policy is the answer, even if it violates the Maastricht limits in the short run.

Jon Faust, 31 January 2008

The US Federal Reserve makes monetary policy based on necessarily imperfect economic forecasts. Recent research shows that the Fed is quite adept at assessing current economic conditions, but forecasting the future remains disappointingly difficult.

Riccardo Cristadoro, Giovanni Veronese, 29 October 2007

Real-time policy-making requires real-time monitoring. The recent turmoil in international financial markets, for example, raised concerns that it would dampen euro-area growth prospects. Surveys of the euro-area in August and September revealed that business expectations had indeed deteriorated. Interpreting such data in real time is notoriously difficult. Statistical techniques provide a systematic and more reliable means of extracting real-time indicators from current data: “€-coin”, a monthly indicator published by the Banca d'Italia and CEPR, is a useful tool to monitor the evolution of the euro-area growth as the financial turmoil unfolds.

Charles Wyplosz, 28 May 2007

National foreign-exchange reserves have grown massively over the past ten years. Is this growth unexpectedly large? And is it driven by insurance motives, or does it result from competitiveness-boosting currency manipulation?

Guido Tabellini, Alberto Alesina, 08 June 2007

GDP per capita is a poor measure since it leaves out home production and intangible investments. Considering these two items, however, suggests that if GDP were measured correctly, Europe’s relative decline might be even more pronounced.

Richard Baldwin, 03 June 2005

Written June 2005: The ‘non’ and ‘nee’ will have important effects on French and Dutch domestic politics, but won’t be the ‘political tsunami’ for the EU that many observers predict. The EU was headed for tough times regardless of the Constitution’s fate, and there is a simple, viable ‘Plan B.’

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