January 12, 2012
China: Inflation and Exchange Rate Watch
Chinese inflation is decelerating [0]. This suggests that whatever further real CNY appreciation occurs is likely arise from nominal appreciation, over the near term.
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Posted by Menzie Chinn at 01:00 PM permalink | Comments (1) | digg this | reddit
January 11, 2012
Reducing Petroleum Consumption from Transportation
MIT Professor Christopher Knittel has a new paper on the potential for the United States to reduce petroleum consumption.
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Posted by James Hamilton at 07:38 AM permalink | Comments (33) | digg this | reddit
January 10, 2012
Dispatches XVIII: Wisconsin Employment and Activity Indicators
As Governor Walker begins a tour of the state to tout a new jobs plan [0], it might be useful to review economic conditions in Wisconsin. Briefly put, Wisconsin employment (total, private) continues to decline, and Wisconsin's coincident indicator continues to diverge from the US indicator (as well as most other of the region's indicators). Hence, points made in previous posts [1] [2] still seem applicable.
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Posted by Menzie Chinn at 05:10 PM permalink | Comments (7) | digg this | reddit
January 09, 2012
"Financial Integration and Global Rebalancing"
I organized the International Economics and Finance Society panel on "Financial Integration and Global Rebalancing" at the Allied Social Sciences Association meetings in Chicago. In the end, the papers fit together much better than I had anticipated; they all dealt with with the factors driving the puzzling pattern of current account balances -- and how policy can possibly influence those patterns.
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Posted by Menzie Chinn at 04:00 PM permalink | Comments (1) | digg this | reddit
January 08, 2012
Current economic conditions
The latest U.S. economic indicators have taken a favorable turn.
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Posted by James Hamilton at 09:36 AM permalink | Comments (11) | digg this | reddit
January 05, 2012
Lost Decades at ASSA/Chicago
For those of you attending the Allied Social Sciences Association (and AEA) meetings in Chicago, January 6-8, I'll be at the W.W. Norton booth in the exhibition hall, Friday afternoon, particularly 5PM onward, ready to talk about Lost Decades: The Making of America's Debt Crisis and the Long Recovery.
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Posted by Menzie Chinn at 07:25 AM permalink | Comments (7) | digg this | reddit
January 03, 2012
Looking Forward in the New Year: Crowding Out and Hyper-Inflation Watch
In my previous post, I cited Jeff Frieden's and my proposal for a conditional inflation target. Yet, according to several observers, we are either on the brink of crowding out due to elevated government deficits [0], or high to hyperinflation, due to monetary base expansion [1]. As has been noted, none of these outcomes have yet materialized, despite months of such warnings. [2] [3] Here, I wanted to evaluate where market expectations stand on these views.
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Posted by Menzie Chinn at 01:45 PM permalink | Comments (14) | digg this | reddit
January 02, 2012
A Call for Action: Conditional Inflation Targetting
From an article by myself and Jeffry Frieden in the newly released Foreign Policy:
[We need] inflation -- just enough to reduce the debt burden to more manageable levels, which probably means in the 4 to 6 percent range for several years. The Fed could accomplish this by adopting a flexible inflation target, one pegged to the rate of unemployment. Chicago Fed President Charles Evans has proposed something very similar, a policy that would keep the Fed funds rate near zero and supplemented with other quantitative measures as long as unemployment remained above 7 percent or inflation stayed below 3 percent. Making the unemployment target explicit would also serve to constrain inflationary expectations: As the unemployment rate fell, the inflation target would fall with it.
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Posted by Menzie Chinn at 06:01 PM permalink | Comments (41) | digg this | reddit
January 01, 2012
On the burden of government debt
I didn't have time for a lengthy discussion of this issue, so will have to settle for some quick links of interest.
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Posted by James Hamilton at 07:44 AM permalink | Comments (42) | digg this | reddit
December 29, 2011
The Year in Review: Fantastical Pseudo Economics
Since the media are full of "year in review" pieces, I thought I’d make a contribution of my own. One of the best things about being a blogger is being able to comment quickly on the most outrageous, nonsensical assertions presented in the guise of analysis. Here are my "ten best" (actually -- most hilariously deluded) excursions into the fantasy world from my postings to Econbrowser. The inspirations range from Speaker Boehner's math to the Heritage Foundation's simulations (where have you gone, Bill Beach!)
Continue reading "The Year in Review: Fantastical Pseudo Economics"
Posted by Menzie Chinn at 08:12 AM permalink | Comments (28) | digg this | reddit
December 28, 2011
Getting the U.S. economy growing
We can sit and wring our hands, or we can get to work.
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Posted by James Hamilton at 06:42 AM permalink | Comments (47) | digg this | reddit
December 25, 2011
U.S. net exports of petroleum products
One big story of 2011 was the United States switched from being a net importer to a net exporter of petroleum products. Here are the details behind that development.
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Posted by James Hamilton at 08:04 AM permalink | Comments (28) | digg this | reddit
December 22, 2011
Regulatory Uncertainty, Macro Policy Uncertainty, and Demand
With the Republicans in the House maximizing policy uncertainty, I think it useful to recount some of the recent research on how uncertainty is affecting output. In particular, I want to go beyond the talking point which asserts that regulatory uncertainty is depressing output (data free analysis here), given that we know empirical results asserting the level of regulation depresses output are not robust [1].
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Posted by Menzie Chinn at 07:25 AM permalink | Comments (30) | digg this | reddit
December 21, 2011
European financial tensions and the Fed
U.S. monetary policy has gone through three distinct phases since 2008. We may be about to begin the fourth.
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Posted by James Hamilton at 08:38 AM permalink | Comments (14) | digg this | reddit
December 19, 2011
Guest Contribution: US Federal Regulatory Budget and Macroeconomic Outcomes: What Do We Know?
By Tara M. Sinclair
Today, we’re fortunate to have Tara M. Sinclair, Associate Professor of Economics and International Affairs and a scholar at the GW Regulatory Studies Center at The George Washington University, as a Guest Contributor.
There has been a lot of debate lately about the costs of regulation for the US economy. In a Regulatory Policy Commentary posted on December 19th, Kathryn Vesey, a research associate at the GW Regulatory Studies Center, and I discuss our preliminary findings from a study of the macroeconomic impacts of changes in the “regulators’ budget,” i.e. the part of the US federal government budget allocated to developing and enforcing federal regulations.
Posted by Menzie Chinn at 09:30 PM permalink | Comments (22) | digg this | reddit
December 18, 2011
Costs and benefits of the Keystone XL pipeline
With new pressure on the Obama Administration to approve the Keystone Gulf Coast Expansion Pipeline, I thought it would be helpful to review some of the debate.
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Posted by James Hamilton at 01:30 PM permalink | Comments (51) | digg this | reddit
December 16, 2011
Dispatches (XVII): "Things are continually and gradually moving in the right direction"
That's the concluding line from the release issued by the Wisconsin Department of Workforce Development's Secretary Reginald Newson. The preceding sentence is "The job numbers are a lagging indicator for economic conditions, and we will continue to move forward." Here are two graphs, with updated DWD data incorporating revisions, and preliminary data for November, that place those comments in context.
Posted by Menzie Chinn at 11:02 AM permalink | Comments (13) | digg this | reddit
December 14, 2011
"Are Chinese Trade Flows Different?"
The answer is no, and yes.
From the paper by that title, coauthored with Yin-Wong Cheung (UCSC, CUHK) and Xingwang Qian (SUNY Buffalo State). (This is a revision of the paper discussed here.) For the "no" part:
We find that Chinese trade flows respond to economic activity and relative prices -- as represented by a trade weighted exchange rate -- but the relationships are not always precisely or robustly estimated. Chinese exports are generally well-behaved, rising with foreign GDP and decreasing as the Chinese renminbi (RMB) appreciates....
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Posted by Menzie Chinn at 10:40 PM permalink | Comments (7) | digg this | reddit
FOMC statement
The Federal Reserve still would like to do more, but not right now.
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Posted by James Hamilton at 07:21 AM permalink | Comments (13) | digg this | reddit
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