Trying to Prevent Another Subpar Recovery
A slow recovery from the coronavirus recession will be a societal policy choice. But I think that it is a societal policy choice that we are going to make. Adam Ozimek is trying to push back the tide, and it is a tide:
Adam Ozimek: '[Labor market] matching matters https://twitter.com/ModeledBehavior/status/1269979410947506177. The argument from the G[reat ]R[ecession] was never that recovery could happen overnight, but that it could have happened significantly faster...
...A decade of below target inflation and wage growth tracking slack is consistent with this. The data do not allow us to distinguish between "F--- it, I want to get back out there" and "F--- it, I want some PPP money". I am confident it's a mix of both, as consumer spending bottomed & even a small % rehiring for the 50m worker PPP firms would -> big gross hiring. This is 10% of the gross job loss recovered, leaving 19m jobs still on the line.
It is way, way, way too soon to draw conclusions about the level of [labor-market] matches which have been broken.... We should not have our normal recession analysis hats on.... Maintaining matches should be economic priority #1 at this point. I don't think this is much of a surprise, and it doesn't yet affect my view of business cycles...
.#forecasting #macro #noted #2020-06-08
