A Paradox That’s Quite Clear: The Economy is Still Recovering
Posted at 6:06 a.m. on June 3, 2014
Washington Post Wonkblog: “The last few years have been hard on economists trying to predict the path of the U.S. economy.
“You can see just how badly the Fed predictions have missed in the following two charts … The author, Andrew Levin, is a researcher at the International Monetary Fund, and his pictures show how frequently Fed forecasters have overestimated future growth – while, at the same time, underestimating how fast unemployment will fall.”
In his view, Levin’s results “‘bolster the view that the unexpectedly steep decline in unemployment over the past few years is indeed related to the concomitant drop in labor force participation.’ So the charts look paradoxical, but really, they’re both telling us the same thing: This economy still isn’t strong enough.”