tag:blogger.com,1999:blog-5713178645208582139.post7004384933391824703..comments2024-03-22T02:37:15.030-05:00Comments on Macro Musings Blog: Balance Sheet Recessions Are Really Nominal Income RecessionsDavid Beckworthhttp://www.blogger.com/profile/04577612979801459194noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-5713178645208582139.post-90251803205338810602013-05-12T17:34:21.053-05:002013-05-12T17:34:21.053-05:00You've clearly missed at least one of the poin...You've clearly missed at least one of the points of your post , an advantage of nominal gdp targeting which was expressed by Sheedy in the quote you provided :<br /><br />"By insulating agents' nominal incomes from aggregate real shocks, this policy effectively completes the market by stabilizing the ratio of debt to income." ( NB : the ratio of debt to INCOME )<br /><br />We Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-9548962815637282082013-05-12T16:41:26.534-05:002013-05-12T16:41:26.534-05:00David,
Just a guess, but my sense is when asked ab...David,<br />Just a guess, but my sense is when asked about "income", most responses hear, "after-tax wages and salaries excluding health benefits". Adjusting for this, perhaps they haven't been so wrong. If this is the case, it is a distributional issue: the top 5% likely garner the lion's share of investment income, and the bottom 5% the lion's share of Diego Espinosanoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-25718427915871640642013-05-12T15:39:32.125-05:002013-05-12T15:39:32.125-05:00Diego,
It is an interesting as to why HHs remain ...Diego,<br /><br />It is an interesting as to why HHs remain so pessimistic about future income growth even though their forecasts have been wrong for a few years. Note, though, that prior to the crash they were fairy close to actual personal income growth so these forecast errors are novel. Distributional issues are important, but even the median expected income has stayed depressed. Something David Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-36414409399680270342013-05-12T15:36:29.774-05:002013-05-12T15:36:29.774-05:00Anonymous,
You're missed the point of the pos...Anonymous, <br />You're missed the point of the post: the deleveraging of recent years is more closely tied to drop in expected nominal income than the damage done to household balance sheets. Look at the change in HH net worth (as a proxy for HH balance sheets) and HH deleveraging over the past few years and former does a poor job explaining the latter after 2009. Changes in expected incomeDavid Beckworthhttps://www.blogger.com/profile/04577612979801459194noreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-73840297809375201242013-05-11T15:57:47.640-05:002013-05-11T15:57:47.640-05:00David,
I'm eyeballing a FRED chart, but it see...David,<br />I'm eyeballing a FRED chart, but it seems the past 3yr rate of growth in Personal Income has been about 4%. How could the UofM respondents have been so wrong in their income expectations? It seems bad forecasting, rather than an NGDP shortfall, is the source of any delevering. In other words, according to your chart, the past three years should have produced annual credit Diego Espinosanoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-57504383362974514572013-05-11T01:38:12.561-05:002013-05-11T01:38:12.561-05:00Those graphs , and those in your previous post , i...Those graphs , and those in your previous post , illustrate the problem nicely , so I'm surprised at how badly you've misinterpreted them.<br /><br />The best fit line on your second graph above shows that at an expected 6% income growth , debt grows at ~9%. At 10% expected income growth , debt grows about 15%. So debt , on average , appears to be taken on at about 1.5 times the rate thatAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-5713178645208582139.post-61988258170336452372013-05-10T15:44:19.307-05:002013-05-10T15:44:19.307-05:00David
Wherever we go we hear about the 'health...David<br />Wherever we go we hear about the 'healthy properties' of NGDPLT. I hope the 'doctors of the world' - the central bankers - soon start to administer this wonderful 'vitamin'. It appears Japan has taken the lead, and that Bernanke, despite being a 'first mover' lost the lead!<br />http://thefaintofheart.wordpress.com/2013/05/10/João Marcushttps://www.blogger.com/profile/13658264244033012660noreply@blogger.com