This is... not right. Prospectively, Barro was modeling a permanent supply-side boost to the level of GDP driven by higher investment to the tune of an extra 800 billion dollars annually. Barro's prospective model conclusion was not of a temporary demand-side boost. His shift to the demand side in his paper with Jason was a six-month-later climb-down. I know this. He knows this. I know he knows this. He knows I know he knows this. Why bother saying this? I think the point is to fuzz the issue: Barro made three assessments—one that the TCJA would boost output by 4% and it might achieve its full effect in 10 years, one that the TCJA would boost output by 7% with an 0.4% first-year effect, and a third with Jason Furman hat was not so much a model-based forecast of the impact but a reduced-form claim that if pst correlations held. It is this last that he now focuses on: Robert Barro: My Best Growth Forecast Ever: "America’s real GDP growth rate of 3.2% for the first quarter of this year is impressive, as was the 3% average growth in 2018 (measured from the fourth quarter of 2017 to the fourth quarter of 2018). Since the end of the Great Recession–from 2011 to 2017–the US economy grew by only 2.1% per year, on average. What accounts for the recent acceleration?...
#noted
