Thursday, February 12, 2009

Credit Crunch Hard to Find in the Investment Data

If the credit crunch were the big deal people say it is, then you would think it would be readily visible in the investment data.

It's impossible to see a credit crunch in the first two graphs -- investment looks like it does in a "run-of-the-mill" recession (recessions that needed no trillion-dollar-financial-sector bailout).

The last graph shows non-residential investment. As Luke Threinen and I have pointed out, non-residential investment has been unusually strong in this recession, at least through 2008 Q3. 2008 Q4 takes a dip down -- maybe that's an effect of a credit crunch -- but that dip has a number of precedents in previous recessions.

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