By Phil Izzo
A roundup of economic news from around the Web.
–Government Investment: Mike Mandel sees a drought in government investment. “The real problem is government investment, which is down 8.3% since the first quarter of 2009, and still falling. In other words, government spending on infrastructure infrastructure, building, and equipment is declining, adjusted for prices changes. This is just utterly bizarre. In a time when the economy is still sluggish, government investment should be the simplest thing to pump up. We need to modernize our infrastructure and bring government into the 21st century, and it’s just not happening… According to this chart, net government investment is the smallest share of GDP in more than 40 years, and dropping.”
–Policy Uncertainty: Timothy Taylor looks at research that aims to shed light on whether policy uncertainty is holding back recovery. “By the time one takes into account the problems of creating an index to measure policy uncertainty and the problems of blending policy uncertainty into a macroeconomic model, I wouldn’t place much confidence in these exact numbers. But at a broader level, the calculations make a strong argument that the effects of policy uncertainty on output and employment have probably been a substantial contributor to the sluggishness of the U.S. economic recovery.”
–Falling Oil: Ed Yardeni notes that the rally in crude oil appears to be running out of gas. “That’s good for the US economy. Stable or even lower fuel costs should fuel consumer spending, which cruised along surprisingly well at the beginning of this year despite the surge in fuel prices. Stable or even lower crude oil prices should reduce inflationary pressures around the world. This is especially important in emerging economies since fuel costs account for larger shares of budgets than in developed economies. This would allow the central banks in China, India, and Brazil to continue to ease their monetary policies, as they have been in recent months.”
Compiled by Phil Izzo