Playing the “let´s pretend things are great” game

That´s basically what Peter Rupert, Thomas Cooley and Zach Bethune do in their “Economic Snapshot”:

The BEA announced in the 3rd estimate that real GDP increased at a s.a.a.r. of 5.0% for 2014 Q3. This was the strongest quarterly growth rate in over a decade.  It seems clear that the U.S. recovery is continuing apace and, if the economy is not held back by weak growth in Europe and the BRICS, we should continue to improve.

If by “continue to improve” they mean “continue to grow”, that´s right. But it´s a pretty low bar because since the bounce-back from the depths of the Great Recession, real output growth has clocked a remarkably stable (and paltry) 2.2% year on year growth.

Improving

Keep wearing those rose-tinted glasses and soon everyone will start feeling things couldn´t be better!

Note: If things get worse, that´s the fault of weak growth in Europe and the BRICS, having nothing to do with bad monetary policy by the Fed itself.

One thought on “Playing the “let´s pretend things are great” game

  1. The erroneous perception that the Fed has been easy means that most economists let the Fed off the hook.

    Additionally there is a cadre of economists who believe at any point in time monetary policy should be tighter.

    Ergo the Fed is getting a free pass.

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