January 31, 2007
Where did all that GDP growth come from?
The Bureau of Economic Analysis reported today that U.S. real GDP grew at an annual rate of 3.5% in the fourth quarter of 2006, more than most of us had been anticipating, and far better than the 0% growth that Nouriel Roubini had been predicting for 2006:Q4 as recently as November 28.
January 30, 2007
Cantarell in decline
Production from Mexico's Cantarell oil field is falling quickly.
January 29, 2007
Macroeconomic Implications of War with Iran
Or, "Oceania has always been at war with Eastasia". The speculation regarding imminent military action rises. What are the fiscal implications of a large scale missile campaign? What would be the repercussions of likely Iranian responses (including closing off the Straits of Hormuz)?
January 27, 2007
The housing market and the Federal Reserve
More evidence that the housing market has stabilized, consistent with the recent policy stance of the Federal Reserve.
January 26, 2007
San Diego Economic Roundtable
I participated this morning in the 23rd Annual San Diego County Economic Roundtable discussion of prospects for the national and local economy. Slides from my remarks are available here and video from the event will be rebroadcast locally a number of times (schedule here).
My bottom line? I think 2007 will be disappointing, but not a disaster.
UPDATE: the event has also been covered by the San Diego Union Tribune.
January 25, 2007
Exchange rates, output gaps and inflation rates
Is there any role for the Taylor rule in helping predict exchange rates?
Derek Neal for president
January 23, 2007
What would Milton do?
What with next Monday apparently having been declared Milton Friedman Day, I thought I might try to contribute to the festivities with some thoughts on how recent U.S. monetary policy might be evaluated from a Friedmanesque perspective.
January 22, 2007
Army Transformation sacrificed on the altar of ...(a) tax cuts, (b) Iraq, (c) other
January 21, 2007
Two stories this week give me some concern.
January 20, 2007
Bernanke and the Social Security Trust Fund
I would like to join Felix Salmon ,  in suggesting that Dean Baker has mischaracterized both Fed Chair Ben Bernanke's remarks to the Congress as well as the substantive policy questions on the table.
January 19, 2007
Bernanke on the deficit
In testimony before the Senate Budget Committee yesterday, Fed Chair Ben Bernanke once again tells it like it is.
January 18, 2007
Federal Government Interest Payments Rising
The Treasury Department reported a steady rate of purchases of Treasuries by foreigners (see the Bloomberg account here). Let's hope that continues -- although we should be cognizant of the ramifications: increasing debt and interest payments to foreigners.
January 17, 2007
What's bringing oil prices down?
Darn hard to talk about this without bringing in the speculators.
January 16, 2007
Housing market review
Our local newspaper, the San Diego Union Tribune, has a big article this morning on the housing market. Among other things, this features some thoughts from yours truly and a foray into multimedia publishing.
January 15, 2007
Escalation and Accidental Military Keynesianism
Under plausible assumptions, Fiscal Year '07 expenditures for operations in Iraq will come close to 1 percentage point of GDP. What will be the impact on the U.S. economy?
Discussing the Economy on Minnesota Public Radio
January 13, 2007
The distribution of world income
One of the most profound questions in economics is why are some countries rich and others poor?
January 12, 2007
The Return of Knowledge-Based Policy-Making?
NOAA admits a human role in global warming. OMB drops -- based on a critical National Academies of Sciences report --plans to implement a flawed risk-assessment procedure. Are these harbingers of change?
January 10, 2007
The Wartime Economy and Tax Policy
So Shinseki was right.
The New Deal and the Great Depression
Like the folks writing at Mahalanobis, Marginal Revolution and Free Exchange, I was rather surprised to see Berkeley Professor Brad DeLong claim, "A normal person would not argue that the New Deal prolonged the Great Depression." Since Brad is a smart guy, I think it might be time for me to acknowledge my freakiness.
January 09, 2007
International Economics at the AEA/ASSA: Selected Items
The Allied Social Sciences Association (incorporating the AEA, the Econometric Society, the International Economics and Finance Society and many other groups) meetings took place in Chicago this last weekend. I wasn't able to go to that many sessions, but I did attend a few related to international issues.
January 08, 2007
Yet another tool to try to assess the probability of a recession.
January 07, 2007
I have been suggesting that the best statistical approach, when confronted with conflicting signals such as the employment estimates from the BLS payroll survey, the separate BLS household survey, or the huge database from the private company Automatic Data Processing, is not to selectively throw some of the data out but rather to combine the different measures. Judging from some of the comments this suggestion has received both
January 05, 2007
Employment still holding up (I think)
Another week of some wildly contradictory employment indicators.
January 04, 2007
President Bush on Economics
On Wednesday, the President writes in a Wall Street Journal op-ed (sub. req.):
January 03, 2007
December auto sales
Auto sales data released today look just great, as long as your name is Toyota.
January 02, 2007
Could be the greatest game in the history of college football, says Matt Zemek.
Low Real Rates Disappear...but the Deficit Remains
I've been looking at real long term interest rates as proxied by nominal rates minus expected inflation. The problem of course is finding measures of expected inflation. Subtracting off the ex post rate (appropriate under the rational expectations hypothesis) can lead to misleading inferences -- and is not practicable for current measures of long term rates. Using ten year constant maturity rates and the Society of Professional Forecasters 10 year horizon CPI inflation rates yields the following picture.
January 01, 2007
What will the Fed do next?