Article:
http://money.cnn.com/2010/01/13/news/economy/stimulus_jobs/index.htmThe focus of this article is about the stimulus plan from the Obama administration, but talks a fair amount about GDP growth from the stimulus spending. It is difficult to calculate what GDP growth (decline) would have been without the stimulus, but several analysts estimate that it added between 1 and 3% to GDP growth in 2009. The rest of the article goes on to debate between how the left and right calculate these GDP growth estimates and unemployment rates.
It may be difficult to calculate real GDP from unemployment rate but possible to get a prediction. Your article just reminds me a concept I have just learned, the Okun's Law states that every change in unemployment rate by 1 percent can cause an inversed change in real GDP by about 2 and a half percent.
ReplyDeleteBesides, your article sounds like a good news but I do not think so. I just check in unemployment situation summary in Bureau of Labor of Statistics (www.bls.gov). There might be an increase in the number of employment but also a decrease in people of the labor force. Overall, the unemployment rate is UNCHANGED (currently very high 10% in both quarter III and IV of 2009). The increase in GDP growth mention in your article probably causes by some other reasons. I myself wonder whether the stimulus plan is really effective.
(T.R.)
I think one should take a look at this from a local perspective. According to a recent article from cnn.com, many Americans see the economy as a core issue to Obama's presidency. 44 percent of Americans approve the way Obama is handling the economy. Thus from a local view the people are not seeing much of a change. If though this stimulus has passed I wonder when it will fully start taking an effective, because the short term and the long term are so abstract in the context of unemployment.
ReplyDeleteDid the massive amount of money needed to fund this stimulus plan add to the money the government printed to cover their deficit? Therefore adding to the inflation mentioned in a previous article? I wonder if the government has addressed that question......
ReplyDelete