February 28, 2008
Bernanke's tightrope act
Some analysts are saying that Fed Chair Ben Bernanke is walking a tightrope-- if he does not drop interest rates quickly enough, the U.S. will be in recession, but if he goes too far, we'll see a resurgence of inflation. I am increasingly persuaded that's not an accurate description of the situation.
February 27, 2008
Musings on the Dollar: PPP and Thresholds
As the dollar hits a new low against the euro , some thoughts on what arguments make sense, given our knowledge of the statistical properties of real exchange rates.
February 26, 2008
House prices falling and worries rising
Today we received updates on U.S. house prices from two different sources. The OFHEO national house price index recorded a 1.3% decline in the price of a typical U.S. home during the fourth quarter of 2007, while the S&P/Case-Shiller home price index registered a 5.7% decline during the last three months of 2007. Here in San Diego, the respective numbers showed a 2.6% decline according to OFHEO and 9.1% decline from Case-Shiller during the quarter. For the year as a whole, Case-Shiller calculates that home prices fell 9.8% nationally and 15% locally.
February 25, 2008
What Explains Deviations from Interest Rate Parity in Emerging Markets?
Some people have the impression that financial capital zips to wherever the returns are highest. Maybe that's the case. But I'm not sure.
February 23, 2008
Crony Capitalism Comes (Returns?) to America
By Menzie Chinn
Or, who will be the Keating 5 of the 2000's? Perspectives from those of us who remember the East Asian crises of the 1990's.
From the NYT:
February 21, 2008
Did somebody say stagflation?
Five weeks ago I asked, Will inflation fears restrain the Fed?, and my answer was that they would not. Certainly inflation fears did not prevent the Fed from lowering its target for the fed funds rate by 125 basis points since I offered that assessment. But I believe that this week's data will force the Fed to be more cautious about the magnitude and pace of subsequent rate cuts.
February 20, 2008
WMDs, Fighting Terrorism, Democracy, Military Keynesianism
From FT yesterday:
February 19, 2008
$100 a barrel
Crude oil reached a record high on Tuesday, and there's an embarrassing oversupply of theories to explain why.
February 18, 2008
Trade, Exchange Rates and Pass Through
Some thoughts on what to make of the trade and export/import price releases.
February 17, 2008
What you see is what you get
Another week to read what you like into the economic tea leaves.
February 16, 2008
CBO on the Outlook, Post-Stimulus
The CBO released new forecasts [pdf] yesterday. No recession, but...
February 14, 2008
Tracking home prices in San Diego
Earlier this week, I explained why real estate prices, rather than interest rates or credit workouts, are the critical determinant of how bad the foreclosure problem is going to become. Today I discuss some of the alternative measures of real estate prices that we might look at, illustrated using the latest numbers for my own community here in San Diego.
February 13, 2008
International Aspects of Tax Policy in the 2008 Economic Report of the President
February 12, 2008
Why "Project Lifeline" is unlikely to help the mortgage mess.
International Economics in the 2008 Economic Report of the President
Ignore the newspaper reports about the short term forecasts; that's old news, since these White House forecasts were made in November (and hence, it's not fair to compare these forecasts to current forecasts, as has been done in some journalistic accounts). And ignore the chapter on housing markets -- there's not going to be any discussion of how inadequate regulatory oversight (to put it mildly) might have contributed to this debacle. The interesting stuff is in the discussion -- or lack of discussion -- of certain international economics issues (no Renminbi!).
Economic Report of the President, 2008 [large pdf!]
February 11, 2008
China's air pollution
February 09, 2008
Sky's eye over the Arabian Desert
February 08, 2008
Just an anecdote, but an interesting one.
February 07, 2008
Expenditure Switching or Expenditure Reduction Again: How Adjustment Is Occuring
The latest GDP release suggests trade balance adjustment is proceeding. Some of the adjustment is being driven by changes in the dollar's value. But I think a lot seems to be coming from the reduction in consumption and income growth.
February 06, 2008
ISM Nonmanufacturing index
February 05, 2008
Michael Dueker is a senior portfolio strategist at Russell Investments and formerly was an assistant vice president in the Research Department at the Federal Reserve Bank of St. Louis. He has been doing some very interesting economic research recently in developing what he calls a Qual VAR model for predicting recessions. We are pleased that he agreed to share some of the current implications of that research with Econbrowser readers, subject to the disclaimer that the content is the responsibility of the author and does not represent official positions of Russell Investments and does not constitute investment advice.
How to balance the Federal budget, Bush style, Redux
A year ago, I observed that the Bush Administration was projecting a balanced budget eventually, by assuming away expenditures. We're in for a replay.
February 03, 2008
January auto sales
Detroit continues its slow bleed.
February 02, 2008
More murk in the crystal ball
Some good news, some bad, in the economic data released yesterday.
February 01, 2008
A "San Diego-style" recession
Alan Gin is an economics professor at the University of San Diego (a separate institution from the University of California at San Diego, where I teach). His San Diego index of leading economic indicators is sending a pretty strong negative signal.