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Tyler Cowen Is Three Months Out-of-Date: No, the Recovery Is Not Strong Enough to Shrug Off a Demand Shock

Ryan Avent:

Fiscal policy: When indeed?: TYLER COWEN tweets: "If we won't face up to "the cliff" at 2.7% gdp growth, when again are we hoping to face it?" One can't be sure, but the point Mr Cowen seems to be making is that America's 2.7% annual growth rate in the third quarter would seem to be fast enough to accept most of the fiscal cuts that are due to hit at the end of the year.

But the current estimate of the fourth quarter real GDP growth rate is less than 1.0%. The recovery is not well-established enough to take a significant adverse demand shock.