CCB Institutional Alignment Project: Workforce Development | Danny Blanchflower Handout

May-05 Nov-05 May-06 Nov-06 May-07 Nov-07 May-08 Nov-08 May-09 Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17 May-18 Nov-18 May-19 Nov-19 May-20 Nov-20 May-21 Nov-21 May-22 Apr-85 Apr-86 Apr-87 Apr-88 Apr-89 Apr-90 Apr-91 Apr-92 Apr-93 Apr-94 Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22

Handout for Danny Blanchflower

Financial expectations next 12 months - Euro area

5.0

0.0

-5.0

-10.0

-15.0

Japanese Consumer Confidence

50.0

45.0

40.0

35.0

30.0

25.0

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Apr-78 Apr-79 Apr-80 Apr-81 Apr-82 Apr-83 Apr-84 Apr-85 Apr-86 Apr-87 Apr-88 Apr-89 Apr-90 Apr-91 Apr-92 Apr-93 Apr-94 Apr-95 Apr-96 Apr-97 Apr-98 Apr-99 Apr-00 Apr-01 Apr-02 Apr-03 Apr-04 Apr-05 Apr-06 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Apr-15 Apr-16 Apr-17 Apr-18 Apr-19 Apr-20 Apr-21 Apr-22

UK Consumer confidence in freefall as Index crashes in May to -40 surpassing the prior low of -39 set in July 2008 to its lowest level since the survey started in 1974.

University of Michigan Expectations Index

110

100

90

80

70

60

50

40

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Data Appendix Table 1. US Economic Indicators, January 2006-April 2008 as known in April 2008 (1) (2) (3) (4) (5) (6) (7) (8) Jan-06 10.4 14.7 2292 2224 106.8 91.2 27.0 0.6 Feb-06 8.4 13.8 2125 2129 102.7 86.7 27.4 0.6 Mar-06 7.2 12.3 1965 2097 107.5 88.9 28.3 0.6 Apr-06 4.0 11.2 1821 1987 109.8 87.4 29.4 0.6 May-06 5.3 10.0 1944 1918 104.7 79.1 29.1 0.5 Jun-06 0.1 8.6 1819 1879 105.4 84.9 28.0 0.4 Jul-06 1.0 7.2 1746 1774 107.0 84.7 28.6 0.3 Aug-06 -2.2 5.7 1646 1731 100.2 82.0 24.5 0.3 Sep-06 -1.8 4.3 1721 1654 105.9 85.4 26.2 0.4 Oct-06 -4.4 3.0 1470 1560 105.1 93.6 25.6 0.4 Nov-06 -3.4 1.8 1565 1527 105.3 92.1 25.7 0.3 Dec-06 -0.2 0.7 1629 1628 110.0 91.7 27.6 0.3 Jan-07 -3.0 -0.1 1403 1566 110.2 96.9 29.6 0.4 Feb-07 -1.0 -0.8 1487 1541 111.2 91.3 27.8 0.3 Mar-07 -0.1 -1.3 1491 1569 108.2 88.4 30.3 0.3 Apr-07 -1.2 -2.1 1485 1457 106.3 87.1 29.0 0.2 May-07 -2.5 -2.8 1440 1520 108.5 88.3 29.1 0.2 Jun-07 -0.1 -3.4 1468 1413 105.3 85.3 27.6 0.2 Jul-07 -0.7 -3.8 1371 1389 111.9 90.4 30.0 0.3 Aug-07 0.2 -4.3 1347 1322 105.6 83.4 27.5 0.2 Sep-07 -4.7 -4.9 1182 1261 99.5 83.4 25.6 0.2 Oct-07 -5.6 -6.1 1274 1170 95.2 80.9 24.1 0.2 Nov-07 -3.9 -7.7 1178 1162 87.8 76.1 23.3 0.2 Dec-07 -6.6 -9.0 1000 1080 90.6 75.5 23.6 0.2 Jan-08 -5.3 -10.7 1071 1061 87.3 78.4 23.8 0.1 Feb-08 -8.2 1065 984 76.4 70.8 21.5 0.0 Mar-08 947 927 64.5 69.5 18.8 -0.2 Apr-08 62.6

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(9) 3.3 3.5 3.6 4.0 3.8 4.0 4.0 4.0 4.2 4.0 4.2 4.3 4.2 4.1 4.2 3.8 4.1 4.1 4.1 4.0 4.1 3.8 3.8 3.7 3.7 3.7 3.6

(10) 2.3 2.6 3.1 1.9 1.4 0.8 0.8 1.0 0.8 0.5 0.0 0.4 0.9 1.7 1.5 1.5 1.4 1.2 1.3 0.6 0.9 0.7 1.3 0.9 0.8 -0.1

(11) 3.2 3.3 3.3 3.0 3.5 2.5 2.5 2.6 3.0 3.4 3.3 3.3 3.4 3.2 3.0 3.0 2.9 2.9 2.5 3.2 3.2 2.7 2.8 2.2 1.9 1.7

(12) 3.1 3.2 3.2 2.8 2.4 2.4 1.9 5.0 3.1 3.6 3.2 2.9 3.0 3.3 3.7 3.1 3.2 3.0 3.6 4.0 3.4 2.7 2.0 1.8 1.4 1.3

Notes to Data Appendix Table 1 Column 1. Median house prices of existing one family homes inc. condos National Association of Realtors % oya Column 2. 20 city house price index - S & P / Case-Shiller % oya Column 3. Housing starts - Census Bureau. Annualised level, thousands of units Column 4. Permits to build - Census Bureau. Annualised level, thousands of units Column 5. Consumer Confidence - Conference Board Index Column 6. Consumer Confidence - Reuters / University of Michigan Index Column 7. Consumer Confidence – Conference Board % saying jobs are plentiful Column 8. Private non-farm payrolls - Bureau of Labor Statistics % change, three months on previous three months Column 9. Private average hourly earnings – Bureau of Labour Statistics % oya Column 10. Nominal Retail Sales - Census Bureau % change, three months on previous three months Column 11. Real consumption - Bureau of Economic Analysis % oya Column 12. Real personal disposable income – Bureau of Economic Analysis % 1

Source: 'Inflation, Expectations and Monetary Policy' Speech given by David Blanchflower at the Royal Society, George Street, Edinburgh 29 April 2008.

"For some time now I have been gloomy about prospects in the United States, which now seems clearly to be in recession….." (p. 16).

"By approximately December 2007 the housing market problems have now spilled over into real activity. The US seems to have moved into recession around the start of 2008," (p. 17).

Other references With Alex Bryson, ‘The Sahm rule and predicting the great recession across OECD countries‘, National Institute Economic Review (2022), 1–51.

With Alex Bryson, “The economics of walking about and predicting unemployment in the United States,” NBER Working Paper 29172, National Institute Economic Review, forthcoming.

With David N.F. Bell, Alberto Montagnoli, and Mirko Moro, ‘The happiness tradeoff between unemployment and inflation’, Journal of Money Credit and Banking, Supplement to vol 46(2), October, 2014: 117-141 "We find, conventionally, that both higher unemployment and higher inflation lower well-being. We also discover that unemployment depresses well-being more than inflation. We characterize this well-being trade-off between unemployment and inflation using what we describe as the misery ratio. Our estimates with European data imply that a 1 percentage point increase in the unemployment rate lowers well-being by more than five times as much as a 1 percentage point increase in the inflation rate."

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