Tuesday, December 15, 2009

A One-Armed Economist

This is why President Truman asked for a one-armed economist. And while this isn't a circumstance of one economist espousing both positions, it's still an example of why many people don't trust economics or economists.

On the one hand...

and on the other...

The message depends on what you hope to promote, I suspect. For what it’s worth, I think the second statement is correct. The recession is over, but the end date of the recession just hasn’t been called yet. The first statement is also correct, but only because the economy can not reach its potential as long as unemployment (a lagging indicator) is at current levels.

Which side do you and your students come down on? I look forward to your comments.

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