May 31, 2009
Supply, demand, and the price of oil
Do recently rising oil prices signal a resurgence of economic growth?
May 30, 2009
Guest Blog: Japan's first trade deficit in 28 years
By Eiji Fujii
Today, we're fortunate to have Eiji Fujii, Professor of Economics at Tsukuba University as a guest blogger.
Shaken by the world financial crisis, Japan has recorded the first trade deficit (on the April-March fiscal year basis) in 28 years (see Figure 1). The trade balance of the 2008 Japanese fiscal year was about -725 billion yen. The last trade deficit (on the fiscal year basis) was recorded in 1980 when the second oil crisis hit the economy hard.
May 28, 2009
Clive W. J. Granger, 1934-2009
It is with great sadness that I report that Sir Clive Granger passed away last night. He had been a wonderful colleague and good friend.
More Thoughts on Potential GDP and the Output Gap
In several past posts, I've been taken to task for using the CBO measure of the output gap (and the associated measure of potential GDP)  . Some criticize the false sense of certainty that is provided by the official measures, since they are known to be revised as data comes in. Some criticize the measures on the basis the fact that the statistical methodologies (Hodrick-Prescott, Band-Pass) are divorced from a formal economic model. Some criticize the concept of potential GDP derived from a production function approach (i.e., thinking about the economy as one big production function associated with one big firm...). Arnold Kling's recent critique centers upon the idea that output is not homogenous, and we need different types of capital (and by extension labor) when the desired composition of output changes. Yet another -- not entirely unrelated -- perspective argues that when relative prices change a lot, potential GDP can drop due to technological frictions; Jim provides a cogent discussion of this approach.
May 27, 2009
More papers on the credit crunch
Links to some interesting papers that I recently read.
May 26, 2009
House Prices Continue to Slide
House prices continued to tumble in March, according to the Case-Shiller index. Time to see what the futures say (keeping in mind the forecasting capacity of the Case Shiller futures are not well known).
May 21, 2009
Link to JEC video
The Joint Economic Committee has now posted a video of yesterday's hearing on oil and the economy. My statement starts at about 11 minutes.
May 20, 2009
Rising world oil demand and the U.S. economy
This morning, the Joint Economic Committee of the U.S. Congress took up the implications of rising world oil demand for the U.S. economy. I was invited to participate along with Daniel Yergin, Co-Founder and Chairman of Cambridge Energy Research Associates.
I have some more discussion at the Washington Post as well as the following links: