Martha Gimbel: Delayed economic policies demand long-term thinking

Martha Gimbel: Delayed economic policies demand long-term thinking | Macro Musings

Long-term economic policies often have delayed effects that are not visible in short-term analyses. Certain economic policies are implemented for reasons beyond driving economic growth. The lack of comprehensive public sector data is hindering effective economic decision-making.

Key Takeaways

Long-term economic policies often have delayed effects that are not visible in short-term analyses.
Certain economic policies are implemented for reasons beyond driving economic growth.
The lack of comprehensive public sector data is hindering effective economic decision-making.
Private sector data cannot fully replace public sector data due to its lack of comprehensiveness.
Official labor statistics cannot be fully substituted by private sector data due to selection biases.
Layoff data from private sources is skewed towards larger companies that announce layoffs.
AI is significantly influencing layoffs, more so than tariffs, but this perspective is questionable.
CEOs may manipulate the narrative around layoffs to protect their image and investor confidence.
The United States has a superior statistical infrastructure for labor market data compared to other countries.
There is a need to rethink what is measured in the labor market to track technological and labor market changes effectively.
Economic policy decisions are often influenced by geopolitical considerations rather than purely economic metrics.
Reliable official statistics are critical for accurate economic forecasting and analysis.
Understanding the limitations of data sources is crucial for effective economic decision-making.

Guest intro

Martha Gimbel is the executive director and co-founder of the Budget Lab at Yale. She previously served as a Senior Advisor at the White House Council of Economic Advisers. Her work analyzes the fiscal and economic impacts of policies including AI on labor markets and trade tariffs.

The delayed impact of long-term economic policies

Long-term policies can have effects that are not immediately visible.
We found that in the short run the tcja extending the tcja would lift economic growth but it was at year ten that the gdp level would be below if you extended it because of the drag on debt but the drag from debt takes time and so it wouldn’t show up until year ten.
— Martha Gimbel
Understanding these delayed effects is crucial for informed decision-making.
Economic growth can initially be boosted by certain policies but may face long-term drawbacks due to debt.
Long-term analysis is necessary to fully understand the implications of budget policies.
Policymakers need to consider both short-term and long-term effects when crafting economic policies.
The drag from debt is a significant factor that can alter the economic landscape over time.
Short-term analyses may not capture the full picture of a policy’s impact.

The multifaceted nature of policy decisions

Economic policies are often implemented for reasons beyond growth.
We sent arms to ukraine after putin invaded ukraine… that isn’t why we did it right.
— Martha Gimbel
Geopolitical considerations can heavily influence policy decisions.
Understanding the broader implications of government actions is essential.
Policy decisions can have complex motivations that go beyond economic metrics.
Recognizing the multifaceted nature of policies helps in understanding their broader impact.
Economic growth is not always the primary goal of policy decisions.
Policymakers must balance economic and geopolitical factors in their decisions.

The challenge of data limitations in economic decision-making

The lack of comprehensive public sector data is a significant challenge.
we’ve been flying blind… I feel terrible for the fed I would not wanna be making a decision in December with the limited amount of data that we have right now
— Martha Gimbel
Effective decision-making relies on robust data sources.
Private sector data, while useful, cannot fully replace public sector data.
private sector data is great and it has many many advantages but it is not a replacement for public sector data it’s not comprehensive in the same way
— Martha Gimbel
Policymakers face difficulties due to limited data availability.
Comprehensive data is crucial for informed policy decisions.
The Federal Reserve and other institutions rely on data for economic guidance.

The limitations of private sector data

Private sector data cannot fully substitute for official labor statistics.
first of all a lot of the private sector data is benchmarked against bls data now in the short run that’s probably fine… but it does mean the longer they operate without data the less they’re able to kind of make adjustments on the back end
— Martha Gimbel
Selection biases and limitations in data collection affect private data accuracy.
Official statistics provide a more reliable picture of the economy.
Layoff data from private sources is skewed towards larger companies.
there’s a couple of issues there right like not all companies make layoff announcements… it’s going to skew towards larger companies that have kind of an incentive to make an announcement
— Martha Gimbel
Understanding these limitations is critical for accurate economic analysis.
Reliable data is essential for understanding employment trends.

The influence of AI on layoffs

AI is reported to be significantly influencing layoffs.
according to the challenger data ai is eight times as responsible for layoffs this year as tariffs i don’t think any economist thinks that that is correct
— Martha Gimbel
This perspective on AI’s impact is questionable.
Understanding the relationship between AI, tariffs, and layoffs is crucial.
Data interpretation plays a critical role in analyzing economic factors.
CEOs may manipulate the narrative around layoffs.
you’re not gonna make a layoff announcement and say okay you know sorry guys i’m a bad ceo i overhired over the last couple of years that’s my bad
— Martha Gimbel
Corporate communications can influence investor confidence.

The US’s superior statistical infrastructure

The US has a superior statistical infrastructure for labor market data.
we really have a crown jewel here in the united states all of that being said you know there are questions about the labor market like technology diffusion and things like that…
— Martha Gimbel
This advantage impacts economic understanding and policy.
Reliable data collection is a significant asset for the US.
There is a need to rethink labor market measurements.
as we’re experiencing technological and labor market change now it would be useful to kind of take a step back and think about okay what’s what we wanna be measuring now so we can see what happens moving forward…
— Martha Gimbel
Adapting measurement strategies is essential for future analysis.
Understanding technological advancements is crucial for labor market insights.

Key Takeaways

Long-term economic policies often have delayed effects that are not visible in short-term analyses.
Certain economic policies are implemented for reasons beyond driving economic growth.
The lack of comprehensive public sector data is hindering effective economic decision-making.
Private sector data cannot fully replace public sector data due to its lack of comprehensiveness.
Official labor statistics cannot be fully substituted by private sector data due to selection biases.
Layoff data from private sources is skewed towards larger companies that announce layoffs.
AI is significantly influencing layoffs, more so than tariffs, but this perspective is questionable.
CEOs may manipulate the narrative around layoffs to protect their image and investor confidence.
The United States has a superior statistical infrastructure for labor market data compared to other countries.
There is a need to rethink what is measured in the labor market to track technological and labor market changes effectively.
Economic policy decisions are often influenced by geopolitical considerations rather than purely economic metrics.
Reliable official statistics are critical for accurate economic forecasting and analysis.
Understanding the limitations of data sources is crucial for effective economic decision-making.

Guest intro

The delayed impact of long-term economic policies

Long-term policies can have effects that are not immediately visible.
We found that in the short run the tcja extending the tcja would lift economic growth but it was at year ten that the gdp level would be below if you extended it because of the drag on debt but the drag from debt takes time and so it wouldn’t show up until year ten.
— Martha Gimbel
Understanding these delayed effects is crucial for informed decision-making.
Economic growth can initially be boosted by certain policies but may face long-term drawbacks due to debt.
Long-term analysis is necessary to fully understand the implications of budget policies.
Policymakers need to consider both short-term and long-term effects when crafting economic policies.
The drag from debt is a significant factor that can alter the economic landscape over time.
Short-term analyses may not capture the full picture of a policy’s impact.

The multifaceted nature of policy decisions

Economic policies are often implemented for reasons beyond growth.
We sent arms to ukraine after putin invaded ukraine… that isn’t why we did it right.
— Martha Gimbel
Geopolitical considerations can heavily influence policy decisions.
Understanding the broader implications of government actions is essential.
Policy decisions can have complex motivations that go beyond economic metrics.
Recognizing the multifaceted nature of policies helps in understanding their broader impact.
Economic growth is not always the primary goal of policy decisions.
Policymakers must balance economic and geopolitical factors in their decisions.

The challenge of data limitations in economic decision-making

The lack of comprehensive public sector data is a significant challenge.
we’ve been flying blind… I feel terrible for the fed I would not wanna be making a decision in December with the limited amount of data that we have right now
— Martha Gimbel
Effective decision-making relies on robust data sources.
Private sector data, while useful, cannot fully replace public sector data.
private sector data is great and it has many many advantages but it is not a replacement for public sector data it’s not comprehensive in the same way
— Martha Gimbel
Policymakers face difficulties due to limited data availability.
Comprehensive data is crucial for informed policy decisions.
The Federal Reserve and other institutions rely on data for economic guidance.

The limitations of private sector data

Private sector data cannot fully substitute for official labor statistics.
first of all a lot of the private sector data is benchmarked against bls data now in the short run that’s probably fine… but it does mean the longer they operate without data the less they’re able to kind of make adjustments on the back end
— Martha Gimbel
Selection biases and limitations in data collection affect private data accuracy.
Official statistics provide a more reliable picture of the economy.
Layoff data from private sources is skewed towards larger companies.
there’s a couple of issues there right like not all companies make layoff announcements… it’s going to skew towards larger companies that have kind of an incentive to make an announcement
— Martha Gimbel
Understanding these limitations is critical for accurate economic analysis.
Reliable data is essential for understanding employment trends.

The influence of AI on layoffs

AI is reported to be significantly influencing layoffs.
according to the challenger data ai is eight times as responsible for layoffs this year as tariffs i don’t think any economist thinks that that is correct
— Martha Gimbel
This perspective on AI’s impact is questionable.
Understanding the relationship between AI, tariffs, and layoffs is crucial.
Data interpretation plays a critical role in analyzing economic factors.
CEOs may manipulate the narrative around layoffs.
you’re not gonna make a layoff announcement and say okay you know sorry guys i’m a bad ceo i overhired over the last couple of years that’s my bad
— Martha Gimbel
Corporate communications can influence investor confidence.

The US’s superior statistical infrastructure

The US has a superior statistical infrastructure for labor market data.
we really have a crown jewel here in the united states all of that being said you know there are questions about the labor market like technology diffusion and things like that…
— Martha Gimbel
This advantage impacts economic understanding and policy.
Reliable data collection is a significant asset for the US.
There is a need to rethink labor market measurements.
as we’re experiencing technological and labor market change now it would be useful to kind of take a step back and think about okay what’s what we wanna be measuring now so we can see what happens moving forward…
— Martha Gimbel
Adapting measurement strategies is essential for future analysis.
Understanding technological advancements is crucial for labor market insights.

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