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April 30, 2008
Revisions, Again
The 0.6 ppt growth rate (SAAR) reported in the 2008Q1 advance release seemed to validate the President's assertion that we're not in a recession, discussed in this post.
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Posted by Menzie Chinn at 10:00 PM permalink | Comments (13)
GDP still growing (barely)
The Bureau of Economic Analysis reported today that U.S. real GDP grew at a 0.6% annual rate in the first quarter of 2008, the same tepid growth rate we saw in the fourth quarter of last year.
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Posted by James Hamilton at 07:49 AM permalink | Comments (18)
April 28, 2008
The Monetary Model of Exchange Rates, Money Demand Shocks and Order Flow
Yes, exchange rate prediction once again. Last Thursday, Michael Moore (of Queen's University Belfast) and I presented a new paper at the IMF's conference on International Macro-Finance (co-sponsored with the ESRC funded World Economy and Finance Program). Here's the paper [pdf].
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Posted by Menzie Chinn at 10:25 PM permalink | Comments (8)
April 27, 2008
Let's Think Long and Hard about Extending Those Bush Tax Cuts
There was a time one could plausibly argue that importing lots of goods and services, and borrowing a lot from abroad (financing the budget deficits that we've incurred since 2001) was a great idea. But at the time, about two and a half years ago, I made the following warning in a Council of Foreign Relations report [pdf]:
The United States faces a wide variety of possible outcomes, with the most dire having a significant likelihood. One real possibility entails the satiation of global investors’ appetite for U.S. Treasury securities, combined with an endless vista of government budget deficits. After several years of large losses on dollar assets due to depreciation, they then demand a substantial premium for holding dollar-denominated assets; either the dollar must weaken so as to make Treasury securities cheap, or yields must rise relative to those on other assets.
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Posted by Menzie Chinn at 08:45 PM permalink | Comments (50)
April 26, 2008
Peter Hooper on the economic outlook
The speaker at our UCSD Economics Roundtable this week was Peter Hooper, chief economist for Deutsche Bank Securities. Here is a brief summary of his thoughts about the U.S. economic outlook.
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Posted by James Hamilton at 08:02 PM permalink | Comments (4)
April 24, 2008
The case for 2-1/4
The Federal Open Market Committee's next meeting is scheduled for April 29/30, which the May fed funds futures contract currently anticipates will result in another 25-basis-point reduction in the target fed funds rate down to 2.0%. Here's why I hope the Fed doesn't do that.
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Posted by James Hamilton at 06:59 PM permalink | Comments (34)
April 23, 2008
What Does the President Know, and When Did He Know It: "We're not in a recession..."
From Reuters:
"We're not in a recession, we're in a slowdown," Bush said at a news conference at the end of a two-day summit with Canadian Prime Minister Stephen Harper and Mexican President Felipe Calderon.
Posted by Menzie Chinn at 09:25 PM permalink | Comments (27)
April 22, 2008
Commodities and the Fed: answering the skeptics
Judging from some of the reactions across the blogosphere (not to mention any number of our own dear readers), maybe I should take another stab at clarifying why I see the hand of the Federal Reserve in the most recent movements in oil and commodity prices.
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Posted by James Hamilton at 08:03 PM permalink | Comments (29)
April 21, 2008
Puzzled
I have been puzzled by the proposal for a tax holiday for gasoline purchases running from Memorial to Labor day (see [0], [1], [2]), with the objective of spurring the economy. First, the Federal tax is quite low, either in real or in relative terms. Second, the benefits that would accrue to consumers are probably pretty small, under reasonable assumptions.
Posted by Menzie Chinn at 10:01 PM permalink | Comments (35)
April 20, 2008
Prospects for Federal Interest Payments to the Rest-of-the-World
I was struck at how Federal government interest payments to the rest of the world have risen even as interest rates have fallen.
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Posted by Menzie Chinn at 12:01 AM permalink | Comments (29)
April 19, 2008
Recession indicators
A couple of minor remarks on recession indicators.
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Posted by James Hamilton at 09:37 AM permalink | Comments (2)
April 17, 2008
Why new oil price highs?
West Texas Intermediate closed today above $115/barrel. Does that reflect changes in the fundamentals of world supply and demand? My answer is no.
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Posted by James Hamilton at 08:45 PM permalink | Comments (74)
Consumer Sentiment Indices: Do They Matter?
From Haver.com:
Michigan Consumer Sentiment Down Yet Again
April 11, 2008
By Tom Moeller
- The preliminary reading of April consumer sentiment from the University of Michigan fell another 9.1% m/m to 63.2. Consensus expectations had been for a lesser decline to 69.0. The decline dropped sentiment to near its lowest level since 1982.
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Posted by Menzie Chinn at 12:01 AM permalink | Comments (13)
April 16, 2008
Commodity arbitrage
Scott Irwin is the Laurence J. Norton Chair of Agricultural Marketing at the University of Illinois. He has been doing some fascinating research on the relation between spot and futures prices in agricultural markets that may shed some light on the role of speculation in recent commodity price movements. We are delighted that Scott agreed to share some of the results of his research with Econbrowser readers.
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Posted by James Hamilton at 11:07 AM permalink | Comments (19)
April 15, 2008
Food prices
How should a well-fed American react when some of the world's poorest citizens in Haiti and Bangladesh riot over the rising price of food?
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Posted by James Hamilton at 08:53 PM permalink | Comments (48)
April 14, 2008
The G-7 Communique and the Dollar
Was this the new (reverse) "Plaza Accord"? From Bloomberg:
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Posted by Menzie Chinn at 09:30 PM permalink | Comments (20)
April 13, 2008
Central bank independence
Former Secretary of Labor Robert Reich (hat tip: Economist's View) offered some thoughts Friday about democracy and the Federal Reserve. Both his insights and his errors are instructive.
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Posted by James Hamilton at 01:32 PM permalink | Comments (38)
April 11, 2008
Some more unwelcome developments
New bankruptcies as consumer sentiment deteriorates.
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Posted by James Hamilton at 12:00 PM permalink | Comments (26)
April 10, 2008
Revisions: The Global Outlook in the WEO
The IMF released the World Economic Outlook's forecasts yesterday. There's been plenty of coverage, so I won't recap the main points, but rather focus in on some interesting aspects:
- The rapidity of the downshifting of estimates since January.
- Commodity price prospects and the LDCs.
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Posted by Menzie Chinn at 08:21 AM permalink | Comments (15)
April 09, 2008
Visualizing foreclosures
Via Mortgage News Clips, an interesting interactive map of Denver foreclosures in USA Today.
Posted by James Hamilton at 06:26 AM permalink | Comments (3)
Oil and the Great Moderation
Another interesting paper presented at the Society for Nonlinear Dynamics and Econometrics Symposium that I attended last week was by Anton Nakov of the Bank of Spain and Andrea Pescatori of the Federal Reserve Bank of Cleveland on the role that changes in energy markets may have played in the reduction in GDP and inflation volatility observed since 1984.
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Posted by James Hamilton at 06:04 AM permalink | Comments (11)
April 08, 2008
Distressing Table of the Day
Here's the basis for the $945 billion estimate of losses to the financial sector. From the IMF's Global Financial Stability Report:
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Posted by Menzie Chinn at 08:52 AM permalink | Comments (18)
April 07, 2008
Downshifting and Reversion in Forecasts: Global Version
The decoupling thesis seems to be ever more out of fashion. From the FT today:
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Posted by Menzie Chinn at 10:18 PM permalink | Comments (8)
Quite the finish
Amazing championship game for the NCAA men's college basketball tournament.
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Posted by James Hamilton at 09:33 PM permalink | Comments (6)
April 04, 2008
Nonfarm Payroll Employment: The Movie
By Menzie Chinn
As informative as the nonfarm payroll employment numbers were, of even more interest to me are the revisions. Figure 1 depicts payroll employment estimates from the January (blue), February (red) and March (green) releases.
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Posted by Menzie Chinn at 09:44 AM permalink | Comments (31)
April 03, 2008
Regional propagation of business cycles
This is the second of two posts (first can be found here) based on the Craig Hiemstra Memorial Lecture that I'll be giving in San Francisco on Friday. There I'll be discussing some ongoing research I've been doing with Mike Owyang of the Federal Reserve Bank of St. Louis on regional propagation of business cycles.
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Posted by James Hamilton at 08:25 PM permalink | Comments (5)
IMF World Economic Outlook Analytic Chapters Released
Several chapters of the IMF's semi-annual research document are now available online, in advance of the IMF-Bank meetings.
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Posted by Menzie Chinn at 08:21 AM permalink | Comments (6)
April 02, 2008
The Yuan on the Move: An Update
And a bit on the IMF's revised forecast for the US.
From Reuters, "U.S.'s Paulson praises China on currency progress":
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Posted by Menzie Chinn at 11:30 PM permalink | Comments (7)
Downturn in auto sales continues
Automobile sales do not bode well for first-quarter GDP.
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Posted by James Hamilton at 06:21 AM permalink | Comments (18)