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October 31, 2007
GDP up, recession probability down
Fret as we all might, the U.S. economy just keeps on growing.
Continue reading "GDP up, recession probability down"
Posted by James Hamilton at 12:15 PM permalink | Comments (16)
Does Dollar Weakness 'Cause' High Oil Prices?
There's an idea floating around that asserts that the high price of oil is -- at least in part -- due to the weak dollar. Does this make sense?
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Posted by Menzie Chinn at 09:50 AM permalink | Comments (17)
October 30, 2007
The Salem witch trial of Elizabeth Jackson Howe
For Halloween I could perhaps write something about what's spooking the Fed as they contemplate tomorrow's fed funds rate decision. But I decided instead to write about the Salem witch trials.
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Posted by James Hamilton at 12:16 PM permalink | Comments (11)
October 29, 2007
Econoblogger at work
Cute pic from the Curious Capitalist.
Posted by James Hamilton at 06:51 AM permalink | Comments (5)
October 28, 2007
$90 a barrel: Is it time to start worrying about the oil price shock of 2007?
Oil shocks in 1973, 1979, and 1990 were each followed by a recession. But we saw the price of oil climb from $20 a barrel in 2002 to $75 a year ago, and so far it has not resulted in a significant economic downturn. What's different now, and can we count on it to continue?
Continue reading "$90 a barrel: Is it time to start worrying about the oil price shock of 2007?"
Posted by James Hamilton at 03:13 PM permalink | Comments (34)
October 26, 2007
Have Net Exports Ever Prevented the U.S. from Going into Recession?
First, a look at what the blogosphere is thinking about recession.
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Posted by Menzie Chinn at 03:20 PM permalink | Comments (11)
October 25, 2007
Why is oil above $90?
The answer is pretty simple, really-- demand keeps going up but supply doesn't.
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Posted by James Hamilton at 08:12 PM permalink | Comments (38)
October 24, 2007
Still fighting the rear guard action against reality
From the New York Times (reg.req.):
White House Cuts to Climate Testimony Raise Questions
An example of one of the changes made to Julie L. Gerberding's testimony. Source: NYT.
Continue reading "Still fighting the rear guard action against reality"
Posted by Menzie Chinn at 05:05 PM permalink | Comments (43)
October 23, 2007
San Diego fires
Thanks to our many friends around the world who've asked if we're ok. We are indeed, and, if you're curious, here's our story.
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Posted by James Hamilton at 07:17 PM permalink | Comments (28)
October 21, 2007
Distressing Picture of the Day
From the IMF's September Global Financial Stability Report:
Continue reading "Distressing Picture of the Day"
Posted by Menzie Chinn at 07:10 PM permalink | Comments (68)
October 19, 2007
Rules versus discretion in monetary policy
I had the privilege of attending a conference in St. Louis this week on Monetary Policy under Uncertainty at which I presented a paper on the response of interest rates to changes in the fed funds target. One of the interesting themes that came up in some of the other papers concerned whether the public's interests are best served when monetary policy follows mechanical rules as opposed to responding to events in a discretionary way. Here I report on some of the discussion of this issue from the conference.
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Posted by James Hamilton at 03:07 PM permalink | Comments (8)
October 18, 2007
The Debt-to-GDP Outlook in Plausible Scenarios
In updating a graph of the projected debt-to-GDP ratio, I was only slightly surprised to see that the out-years (still) look pretty grim.
Continue reading "The Debt-to-GDP Outlook in Plausible Scenarios"
Posted by Menzie Chinn at 06:25 AM permalink | Comments (53)
October 17, 2007
Deteriorating lending standards
What is the significance of the fact that the most recently issued subprime mortgages are the ones that are running into the biggest problems?
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Posted by James Hamilton at 05:39 AM permalink | Comments (25)
October 15, 2007
So Much for that Balanced Budget...
From Bloomberg, an anodyne to happy talk:
Continue reading "So Much for that Balanced Budget..."
Posted by Menzie Chinn at 04:48 PM permalink | Comments (29)
October 14, 2007
Superconduit
The Wall Street Journal describes it as a "superconduit", the New York Times refers to it as a "super-SIV", and the Washington Post is calling it a "Master-Liquidity Enhancement Conduit". Whatever you call it, does it make any sense?
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Posted by James Hamilton at 08:35 AM permalink | Comments (29)
October 12, 2007
The World Inverted: Does It Matter That Yield Curves Are Sloping Downward?
In glancing at Table 4 the last issue of the Economist (sub. req.), I was surprised that so many countries had downward sloping yield curves. Should we worry?
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Posted by Menzie Chinn at 09:35 PM permalink | Comments (12)
October 11, 2007
Inferring market expectations from changes in fed funds futures prices
I recently completed a new research paper studying how interest rates of different maturities change with market expectations of what the Fed is going to do next.
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Posted by James Hamilton at 06:13 PM permalink | Comments (6)
October 10, 2007
IMF World Economic Outlook on Managing Large Capital Inflows
The IMF has just released several chapters of its semi-annual World Economic Outlook. One chapter is entitled "Managing Large Capital Inflows".
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Posted by Menzie Chinn at 03:16 PM permalink | Comments (5)
Speculation and fundamentals in oil prices
Knzn asks about the significance of the shift from contango to backwardation in the term structure of crude oil futures. I think one thing it signifies it that some OPEC spokesmen are simply blowing smoke.
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Posted by James Hamilton at 04:39 AM permalink | Comments (17)
October 08, 2007
What's a "Strong Dollar"?
I used to wonder about the use of this term a lot, at least in the context of government pronouncements. Here's my answer. First, the use of the term in context. From Bloomberg:
Weak Dollar Boosts Growth Without Fueling Inflation (Update1)
By Matthew Benjamin and Vivien Lou Chen
Oct. 8 (Bloomberg) -- Treasury Secretary Henry Paulson, whose signature appears on every new dollar bill, may find the weak currency with his name on it helps the U.S. economy more than the strong one he publicly endorses.
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Posted by Menzie Chinn at 07:03 PM permalink | Comments (15)
October 06, 2007
Does a recession matter?
That's the question posed yesterday by Calculated Risk. Here's how I'd answer it.
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Posted by James Hamilton at 07:24 AM permalink | Comments (30)
October 05, 2007
Employment plunge was a big oops
As many of us were anticipating, today's employment data released by the BLS showed substantially stronger job growth for September.
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Posted by James Hamilton at 08:40 AM permalink | Comments (21)
October 03, 2007
Bush Era Consumer and Occupational Safety Budgets and Trade Anxiety
I noted in a previous post the decline in resources devoted to monitoring the safety of products in previous years, contributing to perceived gaps in consumer safety, and hence resistance to international trade.
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Posted by Menzie Chinn at 10:10 PM permalink | Comments (34)
Not all the news is bad
We've been dwelling here quite a bit on the bleak incoming housing data. But I have to admit that I'm not seeing that spilling over so far into some of the other key economic indicators.
Continue reading "Not all the news is bad"
Posted by James Hamilton at 06:32 AM permalink | Comments (21)
October 02, 2007
The Stock Market and Real GDP
With the recent surge in stock prices, some analysts believe that the probability of recession is receding.
Continue reading "The Stock Market and Real GDP"
Posted by Menzie Chinn at 06:00 AM permalink | Comments (34)
October 01, 2007
Pick a finger
Princeton Professor Alan Blinder offers his thoughts in the New York Times on who's to blame for the mortgage mess, getting the attention of Mark Thoma, Dave Iverson, Brad DeLong, and Greg Mankiw. Here are my two cents.
Continue reading "Pick a finger"
Posted by James Hamilton at 12:00 PM permalink | Comments (25)