The description of the consensus that growth will resume around mid-year -- while accurate -- does not convey much information about what is the consensus regarding the depth of the recession. Nor does it convey the degree of disagreement regarding the timing and strength of the recovery. To provide some isnight , here is the mean forecast for GDP into the new year, according to the WSJ's December survey.

Figure 1: Log real GDP, from 25 Nov 08 preliminary release (blue), potential GDP (black), WSJ mean forecast from December survey (red), high and low forecasts (teal), and third highest and third lowest forecasts (green). Source: BEA NIPA release [link], CBO estimates of 9 Sep 08 [xls], WSJ survey of forecasters from December [link].

The mean forecast indicates a recovery (i.e., resumption of positive growth) starting in 2009Q3. Despite the positive growth projected, the output

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One of the points that all the panelists at last Thursday's event sponsored by WAGE ("The Global Economic Crisis") agreed on was how quickly the macroeconomic situation has deteriorated. I wanted to see if one could quantify the rapidity with which growth prospects have changed. Here is one perspective, showing the mean forecast from the October and November WSJ surveys of forecasters.

Figure 1: Log real GDP, from 26 Sep 08 final release (red), and from 30 Oct 08 advance release (blue), potential GDP (black), WSJ mean forecast from October survey (pink circle), from November survey (teal triangle). Source: BEA NIPA releases [link], CBO estimates of 9 Sep 08 [xls], WSJ survey of forecasters from October and November [link].

The drop in the economy's forecast trajectory is startling; it's no wonder that the urgency associated with a stimulus plan has increased. However, as is

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Article Source The President's press conference yesterday was meant to buttress consumer and investor confidence. I will leave it to others to evaluate whether he was successful in this endeavor [0]. I will also ignore his disingenuous remarks concerning how allowing drilling offshore and in ANWR [1] would somehow affect gasoline prices today in a noticeable manner, and focus instead on his repeated emphasis on the fact that the economy is still growing (although he never mentioned at what pace). This statement is indeed accurate if one focuses on real GDP. I present the log of real GDP in Chained 2000$, normalized to 0 at the NBER-defined trough in 2001Q4. I also present for reference log GDP in the previous two expansions, normalized to 0 in the previous troughs in 1991Q1 and 1982Q4. (For those interested in output gaps, the mean WSJ forecast predicts output will be ...