Comments on: What they’re saying about the rise in GDP http://www.ibabuzz.com/politics/2009/10/29/what-theyre-saying-about-the-rise-in-gdp/ Politics in the Bay Area and beyond Sat, 25 May 2013 08:06:11 +0000 hourly 1 http://wordpress.org/?v=3.5.1 By: J http://www.ibabuzz.com/politics/2009/10/29/what-theyre-saying-about-the-rise-in-gdp/comment-page-1/#comment-9186 J Sat, 31 Oct 2009 01:14:31 +0000 http://www.ibabuzz.com/politics/?p=9024#comment-9186 BGR, i’d recomend you listen to the Robert Reich lecture, dated Sept 02, from the source I provide at the bottom. If you don’t know Mr Reich, i’d recommend you do a google/wikipedia search to learn his background, if interested. If you do know Mr Reich but disagree with his politics (ie his suggested solutions), it is still worth a listen given how accurate his forecasting and read of the data has been of late.

http://webcast.berkeley.edu/course_details_new.php?seriesid=2009-D-71765&semesterid=2009-D

]]> By: Bill Gram-Reefer http://www.ibabuzz.com/politics/2009/10/29/what-theyre-saying-about-the-rise-in-gdp/comment-page-1/#comment-9185 Bill Gram-Reefer Fri, 30 Oct 2009 22:52:53 +0000 http://www.ibabuzz.com/politics/?p=9024#comment-9185 The impact on GDP will be smaller going forward, and according to Dr. Romer, the impact will be around zero by mid next year, and will be a drag later in 2010 (as stimulus is reduced).

So once the stimulus stops…then what?

http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&ContentRecord_id=6dd4483c-5056-8059-7664-1856ea0ee4e6

These estimates suggest that the ARRA added two to three percentage points to real GDP growth in the second quarter and three to four percentage points to growth in the third quarter. This implies that much of the moderation of the decline in GDP growth in the second quarter and the anticipated rise in the third quarter is directly attributable to the ARRA.

Fiscal stimulus has its greatest impact on growth around the quarters when it is increasing most strongly. When spending and tax cuts reach their maximum and level off, the contribution to growth returns to roughly zero. This does not mean that stimulus is no longer having an effect. Rather, it means that the effect is to keep GDP above the level it would be at in the absence of stimulus, not to raise growth further. Most analysts predict that the fiscal stimulus will have its greatest impact on growth in the second and third quarters of 2009. By mid-2010, fiscal stimulus will likely be contributing little to growth.

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The impact on GDP will be smaller going forward, and according to Dr. Romer, the impact will be around zero by mid next year, and will be a drag later in 2010 (as stimulus is reduced).

So once the stimulus stops…then what?

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