Analysis of current economic conditions and policy
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24 июля, 11:44

Wisconsin Nonfarm Payroll Employment Continues to Decline

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And lags further behind its neighbor Minnesota. Wisconsin nonfarm payroll (NFP) employment is now below April 2017 peak. Finally, employment lags what would be predicted from the historical correlation of Wisconsin employment with national. Figure 1: Nonfarm payroll employment in Minnesota (blue), Wisconsin (red), and US (black), all in logs normalized to 2011M01=0. The light […]

21 июля, 16:01

Stephen Moore Is a Liar, Part 2

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“For now, there is nothing the matter with Kansas.” – Stephen Moore, June 17, 2014 Readers will recall that, in response to CNN bringing Stephen Moore on board as an “economics analyst”, I noted that Stephen Moore is a liar. Now I continue with the Kansas edition. For those who forgot, in the original Wichita […]

20 июля, 12:46

So You Want to Fix the Trade Deficit?

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Well, I don’t think a few tariffs and quotas, plus “tweaking” Nafta, are going to do it. And blowing a hole in the Federal deficit ain’t likely to help. First take a look at the trade deficit as defined in the national income accounting sense (i.e., “net exports”), expressed as a share of GDP: Figure […]

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20 июля, 08:02

(Transitory) Revealed Preferences

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Here’s the health coverage implications of President Trump’s proposal to repeal Obamacare, as assessed by the CBO: Figure 1: Effects of H.R. 1628, THE Obamacare Repeal Reconciliation Act of 2017, on health insurance coverage of people under age 65, in millions, by calendar year. Source: CBO, Table 4. So, at least for part of one […]

18 июля, 04:39

“Challenges for Global Macroeconomic Stability and the Role of the G7”

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At the invitation of the Italian Presidency of the Group of Seven (G7) in 2017, the Istituto Affari Internazionali (IAI) conducted a research project on “Major Challenges for Global Macroeconomic Stability and the Role of the G7” together with a major policy think tank in each of the other G7 member countries: Center for International […]

15 июля, 08:26

The Administration Considers Raising Taxes

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On imported steel, that is From Politico today: STEEL REPORT COULD COME NEXT WEEK: Commerce Secretary Wilbur Ross is expected as early as next week to give President Donald Trump a menu of options for restricting steel imports, senators said after a closed-door meeting with the Cabinet official Thursday afternoon. The avowed basis for these […]

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13 июля, 22:05

The Budget Deficit under Trump, Excluding Unicorn Effects

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The CBO has just released an assessment of the President’s budget proposal. Balancing the budget looks unrealistic, even given massively sweeping (and unrealistic) spending cuts. Here are the projected budget balances, under CBO baseline (blue), as claimed in the Budget submitted by the White House (red), and as assessed by the CBO (green). Figure 1: […]

11 июля, 09:05

A New Puzzle à la Fama

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In a forthcoming paper (“The New Fama Puzzle”), coauthored with Matthieu Bussière (Banque de France), Laurent Ferrara (Banque de France), Jonas Heipertz (Paris School of Economics), we re-examine uncovered interest parity – the proposition that anticipated exchange rate changes should offset interest rate differentials. This is one of the most central concepts in international finance. […]

11 июля, 00:05

Mr. Trump on Economics and Accounting

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“For many, many years, the United States has suffered through massive trade deficits. That’s why we have $20 trillion in debt. So we’ll be changing that.” This statement was made during the meeting with the South Korean President on June 30th [1] Observations The United States has experienced large trade deficits for years, starting with […]

09 июля, 03:07

“White House Gaffe Names Xi as President of Taiwan, Not China”

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That’s from Bloomberg. Ya gotta wonder who’s running the show there. For the sake of concreteness, here is a time series plot of GDP (in PPP terms, current international dollars) for the People’s Republic of China, Taiwan, and US. Figure 1: GDP in billions of current international dollars, for US (blue), People’s Republic of China […]

06 июля, 01:29

Non-Credible Threats Are Only Non-Credible when Actors Are Sane

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Ordinarily, when I read a senior government official stating: “We have other methods of addressing those who threaten us, and of addressing those who supply the threats. We have great capabilities in the area of trade.” [US Ambassador to UN Nikki] Haley said she spoke at length to President Donald Trump on Wednesday morning about […]

05 июля, 19:37

Some Non-Economic Implications of the National Security Rationale for Protection

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In several recent pieces [1] [2] [3], I have worried about the economic implications of trade protection, particularly those moving forward in the guise of “national security”. In this post, I want to make a couple of observations on some non-economic implications. From Politico: President Donald Trump’s protectionist rhetoric on trade has already set the […]