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The BEA Underestimates Recessions

By Matthew Yglesias on July 30, 2011 at 8:31 am

"The BEA Underestimates Recessions"


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Here’s an interesting point from Mark Doms, chief economist at the Commerce Department. The Commerce Department’s economists seem to consistently underrate the severity of recessions:

I wonder why that is? But there seems to be a lesson here for macroeconomic stabilization policy, namely that when your data is indicative of a recession the risks ought to be seen as weighted to the downside. You need to err on the side of “going big” with your interest rate cuts and whatever else.

Lack Of Borrowing Authority Will Lead To Largest-Ever Decline In Nominal Gross Domestic Product

There Will Be No Recovery

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