Bob Higgs on the Employment Data

The latest GDP release gives me the opportunity to re-evaluate whether job creation is less than what would be expected, given the growth in real GDP. At first glance, it seems obvious that growth in employment is less than expected. A simple OLS regression of log private employment on log real GDP over the 1987Q1-2012Q3, which might be implied by a particular form of Okun’s Law.

The latest GDP release gives me the opportunity to re-evaluate whether job creation is less than what would be expected, given the growth in real GDP. At first glance, it seems obvious that growth in employment is less than expected. A simple OLS regression of log private employment on log real GDP over the 1987Q1-2012Q3, which might be implied by a particular form of Okun’s Law.

|Peter Boettke| That statement is true for many things ranging from the growth of government to the failure of government interventions to fix the economy to the implications of the permanent war economy for our freedom and our prosperity.  But what I want to focus on today is Higgs's understanding of work within contemporary Austrian economics.

The Bureau of Economic Analysis reported today that U.S. real GDP grew at an annual rate of 2.8% during the fourth quarter of 2011. That's better than any of the previous 5 quarters, which tells you more about how disappointing the previous year and a half has been than it does about how great the fourth quarter was. The average historical growth rate for the U.S. economy over the last 60 years has been about 3.2%.

The Employment situation release for October surprised on the upside: the Bloomberg consensus was for 60,000 increase and the actual was 151,000. And yet I receive emails from the JEC-Republican stating: "If we are to jumpstart this sub-par recovery, President Obama must change course now," said U.S. Congressman Kevin Brady (R-Texas), the top House Republican on the Joint Economic Committee.