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Antonio Fatas Profile picture
Antonio Fatas
@AntonioFatas
Professor of Economics at INSEAD, an international business school with campuses in Singapore, France and Abu Dhabi.
Apr 19, 2022 • 4 tweets • 2 min read
New CEPR discussion paper with @sanjayrajsingh on policy makers' confusion about supply versus demand shocks in the presence of hysteresis. 1/4

cepr.org/active/publica… Imagine a policy maker that ignores the possibility of hysteresis and mistakes a demand shock for a supply shock. Policy will be too tight, resulting in a larger output gap. This will cause hysteresis and a permanent drop in GDP. 2/4
Mar 16, 2022 • 7 tweets • 3 min read
Interesting post by @LHSummers and @asdomash suggesting a very high probability of a recession in the US in the next year given the combination of low unemployment and high inflation. A thread with some comments
1/
medium.com/@alex.domash/h… I had explored a similar analysis in a recent paper. Low unemployment is a powerful predictor of recessions (using quantile regressions or probit analysis) -- better than the slope of the yield curve.

2/
cepr.org/active/publica…
Sep 15, 2021 • 10 tweets • 3 min read
New CEPR discussion paper on the difficulty of maintaining a state of full employment. Periods of “full employment” are short lived in the US. Main question of the paper: Why don’t we observe a long period of low and stable unemployment? 🧵/1
cepr.org/active/publica… Unemployment increases fast in recessions and slowly decreases during expansions (“Plucking Model” of business cycles). But what happens when we get to a normal state? We do not stay in that state for long. In fact, low unemployment rate = strong predictor of recessions. Why? /2
Feb 9, 2021 • 8 tweets • 4 min read
The idea that the US economy can reach full employment in a short period of time and generate inflation runs contrary to what we have seen in any previous cycle. After a recession, unemployment takes many years to return to a low level. 1/8 An interesting overlooked fact is that the US economy spends very little time at full employment. Once unemployment is low, it typically bounces back up because of a new recession. In every single cycle. 2/8
Aug 5, 2020 • 8 tweets • 2 min read
A thread on the shape of the COVID-19 recession/recovery. Staying away from annualized rates and graphs that compare GDP in 2020Q2 with the past to talk about "years of growth lost". This is an unusual crisis and damage needs to be measured in levels and with the latest data. Only a handful of countries have reported June numbers of industrial production. Here are five that can be found in the OECD database. I compare the current crisis to the GFC. Starting month January 2020 versus August 2008 - month zero in the X-Axis. Index = 100 that month
Mar 16, 2020 • 19 tweets • 9 min read
Thread with (non-exhaustive) list of proposals for economic policies that can help stabilize the economy. From @AdamPosen

From @gabriel_zucman

Feb 19, 2020 • 4 tweets • 2 min read
"Seven years on, Abe has little to show for Abenomics." Why does the @FT always present Japan as underperforming? It is one of the fastest growing advanced economies in those seven years. Why the pessimism?

ft.com/content/f13209… Here is GDP per hour compared to a group of advanced economies. One of the best.