sadowski reader:
"1) Given that there are only two ways policy makers can impact aggregate demand, fiscal and monetary policy, and that government consumption and investment has been an enourmous drag on the recovery, it's safe to say whatever recovery we have is due entirely to monetary policy.
2) Since net exports have been a net drag it's also safe to say that the Exchange Rate Channel has not contributed to the recovery. This is not surprising given the dollar's relative strength compared to many of the U.S.'s trading partners, as well as relatively weak demand abroad.
3) Non-residential investment is dominating the recovery. But since so many channels impact it, it's difficult to say without further analysis what the relative contribution of each of the channels is.
4) Consumption's contribution to the recovery is also sizable, and this implies that the Wealth Effects Channel is probably the most important source of the recovery so far. This should not be too surprising in that household sector net assets have risen from about $48.7 trillion in 2009Q1 to $66.1 trillion in 2012Q4 according to the Federal Reserve Flow of Funds:
http://www.federalreserve.gov/releases/z1/
5) Durable goods have also contributed strongly to the recovery and this implies that the Traditional Interest Rate Effects Channel and the Household Liquidity Effects Channels have been important. (Note that the Household Liquidity Effects Channel is also asset price driven.)
6) Residential Investment has contributed little, which tends to speak against the Bank Lending Channel's importance during this recovery, since mortgage lending accounts for three quarters of household sector debt. This shouldn't be too surprising given that the household sector's outstanding mortgage balance has shrunk by $623.1 billion since 2009Q2."
