Yesterday the National Accounts were released.
please see Ricardian ambivalance and Mark the Graph ( please note for all political junkies he has another blog as well now Mark the Ballot) on the sidebars
See also Grog's Gamut.
Nice graphs and analysis if you read them all.
What to me is important.
Real GDP is > than Nominal GDP because of DEFLATION. Yes folks deflation.
Remember it is nominal GDP that is important for the budget bottom line.
Unit labour costs are falling sorry rising much more slowly and productivity is still increasing.
Times are tough for Mr Hockey. Cash rates and budget deficits/public debt are inexorably linked.
However he just cannot explain how interest rates are lower now than under Mr Howard.
He wants greater public spending cuts BUT the public sector actually detracted 0.5 percentage points from GDP growth.
Just how much of this does he want and how does he think it will affect the budget bottom line?
Catch up with Noah Smith on the sidebar on a debate about multipliers, Simon Wren Lewis about how much inflation should a Central Bank allow and Jonathon Portes on self defeating fiscal policies.
Yes another lesson if one was needed that classical economics is a disaster for policy makers to follow as Europe well knows now.