O debate sobre se os EUA estão, ou não, em recessão: a opinião (fundada em números) de Robert Barro

Yes, The U.S. Economy Is Likely In Recession

Robert J. Barro

 Financial Advisor, Shrewsbury, NJ  – 2/08/2022

The latest figures from the Bureau of Economic Analysis (BEA) show that the U.S. economy has experienced two consecutive quarters of negative real (inflation-adjusted) GDP growth. That accords with a popular definition of a recession. But economists have noted that any official declaration of a U.S. recession must come instead from the National Bureau of Economic Research (NBER), which carefully assesses various monthly macro economic indicators observed over extended periods.

 

Given the intensity of this debate in the media, one might think that the popular and official assessments often contradict each other. But that is not the case. Since 1948, and prior to the current episode, BEA data on real GDP reveal ten periods with two or more consecutive quarters of negative growth—in 1949, 1954, 1958, 1970, 1975, 1980, 1982, 1991, 2009, and 2020—all of which correspond to the NBER’s eventual declaration of a recession.

 

 In other words, the “two-consecutive-quarters” metric has had no false positives since 1948. If one takes the eventual NBER verdict as truth, one must also accept that two consecutive quarters of negative real GDP growth have consistently forecasted a recession for the past 74 years.

To be sure, there have been a couple of cases since 1948 in which the NBER has declared a recession without an associated two-quarter fall in real GDP: namely, the mild recessions of 1960-61 and 2001. These were false negatives, where the absence of two consecutive quarters of declining GDP did not guarantee the absence of a recession. But, of course, this consideration is not pertinent for 2022.

 

Going back to before 1948, there was a false positive in 1947, when consecutive quarters of GDP decline did not result in the NBER declaring a recession. But in this case, the NBER presumably (and reasonably) was accounting for the fact that the GDP reduction in 1946-47 was driven by the demobilization from World War II. It recognized that with the release of economic resources due to decreased military spending, the economy was operating well despite a fall in real GDP. In any case, this consideration also does not apply in 2022.

 

The NBER’s business-cycle analysis goes beyond real GDP to consider monthly data on personal income, employment, consumer expenditure, wholesale and retail sales, and industrial production. But while the benefits of considering monthly data are clear, it is not obvious that this array of variables is otherwise superior to GDP, which is already a broad economic measure that weights sectors in accordance with their contributions to production and income generation.

 

Now calculations consider a wide array of high-frequency data, but only to the extent that they help forecast (or “nowcast”) real GDP. A good research strategy for business cycles, then, is to focus on the size and duration of movements in real GDP itself, as the economist James D. Hamilton does in his Econbrowser Recession Indicator Index. In any event, the inferences about recessions from GDP data are similar to those presented by the NBER.

 

One argument that has come up in the current debate is that the US GDP numbers for the first two quarters of 2022 may eventually be revised up to the point that they will no longer show two consecutive declines. (My calculations above are based on the latest available revised data on real GDP.) Such revisions are possible, of course; but they are unpredictable.

 

Out of all the GDP data revisions since 1965 (available from the Federal Reserve Bank of Philadelphia), the only time that one of the 10 aforementioned cases of two-quarter GDP declines was changed was in 1980. Because the initial data for the third quarter of 1980 did not show a GDP fall, this case would not be classed as a two-quarter GDP decline based on the initial data. But this modification would not alter the takeaway from seeing a two-quarter fall in GDP.

 

Another argument, offered by U.S. Secretary of the Treasury Janet Yellen, is that the strong U.S. labor market precludes the NBER from designating the current downturn as a recession. But while it is true that employment is one of the data series that the NBER consults, there is no reason to think that this variable—even if it remains strong—will single-handedly determine the ultimate call of a recession. Although employment usually falls during a recession, there have been several cases when payroll employment grew or remained roughly stable well after the start of an NBER-designated recession: from December 2007 to March 2008; January to April 1980; November 1973 to October 1974; and December 1969 to April 1970.

One clear advantage of the two-consecutive-quarter measure is that it is timely and does not require waiting for the NBER’s announcement that a recession has begun. Since the formation of the NBER’s Business Cycle Dating Committee in 1978, the lag between the start of a recession (as gauged eventually by the NBER) and the announcement of the start of a downturn averaged seven months. This delay might be appealing to U.S. President Joe Biden’s administration if it goes beyond the midterm elections in November, but it is otherwise unattractive.

 

The bottom line is that, with the announcement on July 28 of a two-quarter GDP decline, we can be highly confident that the U.S. economy entered a recession early in 2022.

 

Robert J. Barro, professor of economics at Harvard University, is a visiting scholar at the American Enterprise Institute. 

 

Economic Growth By Robert J. Barro and Xavier I. Sala-i-Martin: Introduction

Sempre recomendo este livro aos meus alunos: o melhor text-book, tanto no plano teórico, como no terreno histórico-empírico.

Economic Growth

By Robert J. Barro and Xavier I. Sala-i-Martin

Second edition

Hardcover

$110.00 X | £90.00ISBN: 9780262025539672 pp. | 7 in x 9 inOctober 2003

The long-awaited second edition of an important textbook on economic growth—a major revision incorporating the most recent work on the subject.

Summary

The long-awaited second edition of an important textbook on economic growth—a major revision incorporating the most recent work on the subject.

This graduate level text on economic growth surveys neoclassical and more recent growth theories, stressing their empirical implications and the relation of theory to data and evidence. The authors have undertaken a major revision for the long-awaited second edition of this widely used text, the first modern textbook devoted to growth theory. The book has been expanded in many areas and incorporates the latest research. After an introductory discussion of economic growth, the book examines neoclassical growth theories, from Solow-Swan in the 1950s and Cass-Koopmans in the 1960s to more recent refinements; this is followed by a discussion of extensions to the model, with expanded treatment in this edition of heterogenity of households. The book then turns to endogenous growth theory, discussing, among other topics, models of endogenous technological progress (with an expanded discussion in this edition of the role of outside competition in the growth process), technological diffusion, and an endogenous determination of labor supply and population. The authors then explain the essentials of growth accounting and apply this framework to endogenous growth models. The final chapters cover empirical analysis of regions and empirical evidence on economic growth for a broad panel of countries from 1960 to 2000. The updated treatment of cross-country growth regressions for this edition uses the new Summers-Heston data set on world income distribution compiled through 2000.

Sample Chapter: Introduction

Introduction 

I.

The Importance of Growth To think about the importance of economic growth, we begin by assessing the long-term performance of the U.S. economy. The real per capita gross domestic product (GDP) in the United States grew by a factor of 10 from $3340 in 1870 to $33,330 in 2000, all measured in 1996 dollars. This increase in per capita GDP corresponds to a growth rate of 1.8 percent per year. This performance gave the United States the second-highest level of per capita GDP in the world in 2000 (after Luxembourg, a country with a population of only about 400,000).

To appreciate the consequences of apparently small differentials in growth rates when compounded over long periods of time, we can calculate where the United States would have been in 2000 if it had grown since 1870 at 0.8 percent per year, one percentage point per year below its actual rate. A growth rate of 0.8 percent per year is close to the rate experienced in the long run—from 1900 to 1987—by India (0.64 percent per year), Pakistan (0.88 percent per year), and the Philippines (0.86 percent per year). If the United States had begun in 1870 at a real per capita GDP of $3340 and had then grown at 0.8 percent per year over the next 130 years, its per capita GDP in 2000 would have been $9450, only 2.8 times the value in 1870 and 28 percent of the actual value in 2000 of $33,330. 

Then, instead of ranking second in the world in 2000, the United States would have ranked 45th out of 150 countries with data. To put it another way, if the growth rate had been lower by just 1 percentage point per year, the U.S. per capita GDP in 2000 would have been close to that in Mexico and Poland. Suppose, alternatively, that the U.S. real per capita GDP had grown since 1870 at 2.8 percent per year, 1 percentage point per year greater than the actual value. This higher growth rate is close to those experienced in the long run by Japan (2.95 percent per year from 1890 to 1990) and Taiwan (2.75 percent per year from 1900 to 1987). If the United States had still begun in 1870 at a per capita GDP of $3340 and had then grown at 2.8 percent per year over the next 130 years, its per capita GDP in 2000 would have been $127,000— 38 times the value in 1870 and 3.8 times the actual value in 2000 of $33,330. 

A per capita GDP of $127,000 is well outside the historical experience of any country and may, in fact, be infeasible (although people in 1870 probably would have thought the same about $33,330). We can say, however, that a continuation of the long-term U.S. growth rate of 1.8 percent per year implies that the United States will not attain a per capita GDP of $127,000 until 2074.

Ler toda a Introdução neste link.

Educacao: progressos sociais do seculo 19 ao 21 - livro de Robert Barro, Jong-Wha Lee

Published by EH.Net (June 2016)

Robert J. Barro and Jong-Wha Lee, Education Matters: Global Schooling Gains from the 19th to the 21st Century. New York: Oxford University Press, 2015. xi + 289 pp. $35 (hardcover), ISBN: 978-0-19-937923-1.

Reviewed for EH.Net by Sun Go, School of Economics, Chung-Ang University.

Can we analyze the role of education in economic, political, and social development using cross-country panel data? Robert J. Barro (Paul M. Warburg Professor of Economics at Harvard University) and Jong-Wha Lee (Professor of Economics and the Director of the Asiatic Research Institute at Korea University) have long been studying this subject and have published numerous academic works on it for more than twenty years. Education Matters is a comprehensive volume of their contributions to the literature on human capital and development, compiled by creating and analyzing their own long-term panel data at the country level. The book is mainly composed of two parts. The first part (Chapters 2 and 3) explains how they created cross-country panel data on average school years, and projects the growth of educational attainment to 2040. The second part (Chapters 3, 4, and 5) presents their analysis of the panel data on the effect of educational attainment on growth, fertility, and political institutions. In Chapter 5, in particular, Barro and Lee create another set of educational attainment data considering the quality of schooling, and repeat their analysis using the new quality-adjusted data set.

A conspicuous contribution of Barro and Lee is the creation of the cross-county educational attainment data sets. They first collect 146 countries’ enrollment rates of school-age population at the elementary, secondary, and tertiary levels at five-year intervals from 1950 to 2010. Most of the enrollment data are collected from UNESCO statistics based on each country’s census reports. By applying school-entering ages, term lengths, and the dropout rates to the enrollment rates by year and country, they compute the average years of schooling of the young cohorts, such as the 15 to 19 or the 20 to 24 year-old population. The average years of schooling for the older cohorts are estimated by applying cohort and education-level specific mortality rates to the educational attainment of younger cohorts under the assumption of no adult education. Finally, the educational attainment of the working population of a country for a year are calculated by the average years of schooling of the five-year-interval birth cohorts weighted by their population sizes. In addition to the total educational attainment data, Barro and Lee also estimate country-level educational attainment by sex. This is the baseline data that they have created and updated since the 1990s.

The book introduces another historical panel of educational attainment at the country level from 1870 to 1945, which is constructed in a similar way. The starting point is again a collection of the enrollment rates at elementary, secondary, and tertiary levels of 89 countries from 1820 to 2010 at five-year intervals. They calculate the enrollment rates using various historical statistics of school enrollments and school-age populations. Historical enrollment statistics are compiled from diverse sources such as Databanks International, Mitchell’s International Historical Statistics, Benavot and Riddle (1988), Lindert (2004), U.S. Bureau of Education’s Annual/Biannual Reports, Barnard (1854), and Monroe (1911). School-age population statistics are collected from Mitchell’s International Historical Statistics, the United Nations’ Demographic Yearbooks, and the League of Nation’s Statistical Yearbooks. However, due to the limited availability of historical enrollment data, a portion of the enrollment rates are created by linear interpolation or estimation assuming a logistic trend. About 38 percent of the school enrollment rates of total population from 1870 to 1945 are either interpolated or estimated. The share of the artificial data is greater for the female population and the period before 1870. Using the historical enrollment rates, Barro and Lee estimate the historical data on educational attainment by sex in a similar way to their baseline data for 1950-2010.

The two data sets are freely downloadable from the authors’ webpage (http://www.barrolee.com). The baseline data on educational attainment from 1950 to 2010 have already been widely used by researchers in social sciences, and their unique historical panel is expected to attract the interests of scholars. The historical panel will be useful in capturing long-run trends and examining over-time correlation between the expansion of formal schooling and other variables in the long run. However, the Barro-Lee historical panel of educational attainment may not be the best for identifying moments of change in educational expansion or research that requires identifying the timing of variation in formal schooling, as it contains values structurally estimated only by the trend.

Barro and Lee also present various results from the cross-country panel analysis using their own data sets. Although they have created balanced panels of educational attainment, the data sets for further analysis become unbalanced panels because other dependent and control variables, such as GDP per capita, fertility, and the democracy index, are not available for all the countries and years. Their development accounting shows that about 6 to 20 percent of the cross-country variation in output per worker can be explained by educational attainment. The contribution of human capital to economic growth is estimated to be a bit higher in growth accounting. The authors also present results from the three-stage least squares regressions with country fixed effects, which use lagged explanatory variables as instruments to deal with a possible endogeneity problem between education and the outcome variables — the growth rate of GDP per worker, fertility, and the democracy index. The results are not exactly the same as in the existing literature. The effect of educational attainment on growth is weak and statistically insignificant. The effect on fertility differs by gender. Women’s schooling leads to lower fertility, while men’s schooling is positively associated with fertility. The effect on democracy is nonlinear. Controlling for the country fixed effects, the higher average years of schooling, particularly of women, raise the democracy index at a decreasing rate. The panel regressions using the baseline data of 1950-2010 and the historical panel of 1870-2010 return similar results.

In Chapter 6, Barro and Lee repeat the panel regression analysis using another cross-country panel of 70 countries containing the quality-adjusted human capital stock measures from 1960 to 2010 at five-year intervals. The quality-adjusted human capital stock is calculated by weighting the average schooling years of each five-year birth cohort by the relevant test scores representing the quality of education and associated labor market returns. Their collection of standardized test scores spans 134 countries from 1965 to 2010 at the elementary and secondary school levels, despite a significant portion of the observations being missing, especially for the earlier period. Barro and Lee again fill the missing observations with estimates by linear interpolation or regional trends. The real and artificial standardized test scores for each five-year interval then become cohort-specific aggregate measures of school quality at each level of schools. The quality-adjusted panel of educational attainment is constructed in a similar way to the previous data sets. Further, from the panel IV regressions, Barro and Lee find that quality-adjusted educational attainment has a positive effect on the growth rates of GDP per worker if average years of schooling are controlled.

Education Matters offers a bird’s eye view of the role of education in the long-run development in the global context. It clearly shows the pioneering endeavor of Robert Barro and Jong-Wha Lee for the construction and analysis of their unique cross-country panels of educational attainment data. Anyone interested in cross-country analysis on the effect of human capital on economic, social, and political outcomes will undeniably find this volume a practically helpful starting point. This book also contains good teaching resources for undergraduate courses, such as maps showing the expansion of formal schooling in the world or figures presenting correlations between the average years of schooling and other socioeconomic indicators. On the other hand, the book may not be perfect for studying what really happened in history, as descriptions of historical or institutional backgrounds are not sufficiently accompanied by the valuable work of data construction and analysis. The book also contains little discussion of the contributions by economic history research to the literature on the rise of formal schooling and its associated effects on various outcomes since the nineteenth century.

References:

H. Barnard (1854), National Education in Europe: Being an Account of the Organization, Administration, Instruction and Statistics of Public Schools of Different Grades in the Principal States, New York: C.B. Norton.

A. Benavot and P. Riddle (1988), “The Expansion of Primary Education, 1870-1940: Trends and Issues,” Sociology of Education, 61(3): 191-210.

P. Lindert (2004), Growing Public, Cambridge, UK: Cambridge University Press.

P. Monroe (1911), A Cyclopedia of Education, New York: Macmillan.

Sun Go is an Associate Professor of Economics at Chung-Ang University. His research focuses on the development of public school finance in the nineteenth-century United States and twentieth-century Korea.

Copyright (c) 2016 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator (administrator@eh.net). Published by EH.Net (June 2016). All EH.Net reviews are archived at http://eh.net/book-reviews/

Economic Growth: R. Barro - Xavier Sala-i-Martin

A very important book, for students of all social sciences. Paulo Roberto de Almeida 

Economic Growth
Robert J. Barro and Xavier Sala-i-Martin
2nd Edition; Cambridge, Mass.; The MIT Press, 2003

This graduate level text on economic growth surveys neoclassical and more recent growth theories, stressing their empirical implications and the relation of theory to data and evidence. The authors have undertaken a major revision for the long-awaited second edition of this widely used text, the first modern textbook devoted to growth theory. The book has been expanded in many areas and incorporates the latest research.

After an introductory discussion of economic growth, the book examines neoclassical growth theories, from Solow-Swan in the 1950s and Cass-Koopmans in the 1960s to more recent refinements; this is followed by a discussion of extensions to the model, with expanded treatment in this edition of heterogenity of households. The book then turns to endogenous growth theory, discussing, among other topics, models of endogenous technological progress (with an expanded discussion in this edition of the role of outside competition in the growth process), technological diffusion, and an endogenous determination of labor supply and population. The authors then explain the essentials of growth accounting and apply this framework to endogenous growth models. The final chapters cover empirical analysis of regions and empirical evidence on economic growth for a broad panel of countries from 1960 to 2000. The updated treatment of cross-country growth regressions for this edition uses the new Summers-Heston data set on world income distribution compiled through 2000.

About the Authors
Robert J. Barro is Robert C. Waggoner Professor of Economics at Harvard University and a senior fellow of the Hoover Institution at Stanford University.

About Robert Barro:
"He has changed the way economists think about everything from the long-run effects of government deficits to the forces that favor economic growth."
--Sylvia Nasar, New York Times

Xavier Sala-i-Martin is Professor of Economics at Columbia University, and visiting professor at the University of Pompeu Fabra, Barcelona.

Table of Contents

Economic Growth, 2nd Edition
Robert J. Barro and Xavier Sala-i-Martin

Preface
Download Chapter as PDF Sample Chapter - Download PDF (24 KB) xvii
Introduction
Download Chapter as PDF Sample Chapter - Download PDF (167 KB) 1
1. Growth Models with Exogenous Saving Rates (the Solow-Swan Model)
Download Chapter as PDF Sample Chapter - Download PDF (341 KB) 23
2. Growth Models with Consumer Optimization (the Ramsey Model) 85
3. Extensions of the Ramsey Growth Model 143
4. One-Sector Models of Endogenous Growth 205
5, Two-Sector Models of Endogenous Growth (with Special Attention to the Role of Human Capital) 239
6. Technological Change: Models with an Expanding Variety of Products 285
7. Technological Change: Schumpterian Models of Quality Ladders 317
8. The Diffusion of Technology 349
9. Labor Supply and Population 383
10. Growth Accounting 433
11. Empirical Analysis of Regional Data Sets 461
12. Empirical Analysis of a Cross-Section of Countries 511
Appendix on Mathematical Methods 567
References
Download Chapter as PDF Sample Chapter - Download PDF (80 KB) 627
Index
Download Chapter as PDF Sample Chapter - Download PDF (69 KB) 641

Endorsements
"Barro and Sala-i-Martin have done a superb job of synthesizing much of the existing theoretical and empirical research on the mechanisms and determinants of economic growth and convergence. Though it incorporates much new material, this updated version is fully accessible to a third year undergraduate student, while remaining of invaluable use to any research scholar seriously interested in growth and development economics."
--Phillipe Aghion, Department of Economics, Harvard University

"This is an invaluable book for a first graduate course in economic growth. The exposition is clear and easy to follow, but also rigorous. It is an excellent stepping stone for research in the field."
--K. Daron Acemoglu, Professor of Economics, MIT

"Barro and Sala-i-Martin provide an outstanding and comprehensive treatment of growth theory and empirics--an instant classic! I learn something new every time I pull my copy from the shelf."
--Charles I. Jones, Department of Economics, University of California, Berkeley