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December 31, 2009
Counterfactuals and the Stimulus, Again
And some lessons from the 1930's for the 2000's
John Taylor returns to the topic of how much impact the stimulus package has had on output. The heart of the argument is summarized by his extension of a graph presented in the NYT (and reproduced in this post).
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Posted by Menzie Chinn at 02:52 PM permalink | Comments (15)
December 30, 2009
Term deposit facility
On Monday the Federal Reserve proposed a new term deposit facility that would allow the Fed to borrow directly from private institutions. Here I offer some thoughts on how this fits into the Fed's long-term plans and what its implications for the rest of us might be.
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Posted by James Hamilton at 02:56 PM permalink | Comments (56)
December 29, 2009
How Important Is Structural Unemployment in the Current Recession/Recovery?
Joseph Lawler at the Spectator distills the Austrian perspective on the sources of current unemployment.
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Posted by Menzie Chinn at 11:01 AM permalink | Comments (29)
December 27, 2009
The Prospects for Global Imbalances: A View from the IMF
Following up on recent posts ([1], [2], [3], [4], [5] [6]) Here's another take on the prospects for resolving global imbalances, from Olivier Blanchard and Gian Maria Milesi Ferretti, "Global Imbalances: In Midstream?" Staff Position Note 09/29 (Dec. 22, 2009):
IV.B. Lower Global Imbalances in the Future
What will happen in the future depends on how long the factors we just listed will be in play [oil price decline, asset price busts, increase in home bias, the hit to durable consumption and investment goods demand].
Below is reproduced the IMF World Economic Outlook's October 2009 forecast for current account balances.
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Posted by Menzie Chinn at 07:30 PM permalink | Comments (8)
December 26, 2009
Lost decade for stocks
Why were the aughts so nasty for stocks?
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Posted by James Hamilton at 10:53 AM permalink | Comments (24)
December 23, 2009
Levels versus Growth Rates and the Impact of ARRA
Since there is often confusion in popular discussions of the net effect of the stimulus on GDP, I thought it would be useful to present Deutsche Bank's views on the impact on both the level and growth rates of GDP. (Here we are talking about seasonally adjusted at annual rates [SAAR] growth rates and levels; cautionary notes here: [1], [2].)
Continue reading "Levels versus Growth Rates and the Impact of ARRA"
Posted by Menzie Chinn at 11:46 AM permalink | Comments (25)
December 21, 2009
Podcast on the federal debt
EconTalk hosts a podcast of a conversation I had with George Mason Professor Russ Roberts on deficits and the debt. At the end we also get to a discussion of oil markets. You can participate in the discussion with your own comments either here or over at EconTalk.
Posted by James Hamilton at 05:54 PM permalink | Comments (13)
A Crisis Reading List
Policy Responses to the Great Recession. Links here.
Posted by Menzie Chinn at 03:40 PM permalink | Comments (3)
December 19, 2009
What went wrong and how can we fix it?
That's the title of an article I wrote for the UCSD Economics Department's Economics in Action, which I reproduce below.
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Posted by James Hamilton at 04:49 PM permalink | Comments (31)
December 17, 2009
Teaching Macro, after the Great Recession
Or, How to adapt the intermediate macro syllabus to an altered world
This semester is the first time I've taught intermediate macroeconomics link in over two years. The last time I taught this course in the Spring of 2007, the key topics were inflation, the possibility of stagflation, and the possibility of containing the ongoing housing slowdown.
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Posted by Menzie Chinn at 12:44 AM permalink | Comments (31)
December 16, 2009
Links for 2009-12-16
- NY Fed economist Erkko Etula finds that he can predict oil prices using the volume of broker-dealer financial assets.
- Washington University Professor James Morley and separately Kansas City Fed economist Todd Clark haven't given up on the Great Moderation.
- My colleague Eli Berman discusses his book Radical, Religious, and Violent: The New Economics of Terrorism
- Fannie Mae and Freddie Mac may seek an increase to their $400 billion federal lifeline before the end of the year.
- Billy Hallowell puts together a blog carnival on Facing Up to the Nation's Finances.
- Berkeley Professor Petr HoYava proposes a new theory of gravity.
Posted by James Hamilton at 05:53 AM permalink | Comments (7)
December 14, 2009
How High Do Income Elasticities Have to Be to Explain the Recent Import Drop-off?
There's been a debate over the cause of the trade flow drop-off, with varying explanations being offered. Broadly speaking, the explanations are (1) trade credit and credit crunch more broadly, (2) enhanced vertical specialization implying higher income elasticities, and (3) compositional effects (the trade dependent sectors were those most highly affected in the latest recession). Without necessarily offering definitive evidence one way or the other, I wanted to quantify the extent to which income elasticities had to be higher in order to rationalize the movements observed in US data.
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Posted by Menzie Chinn at 08:31 PM permalink | Comments (5)
December 13, 2009
Should the Fed be the nation's bubble fighter?
That's a question recently taken up by the Wall Street Journal. Here are my thoughts.
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Posted by James Hamilton at 11:37 AM permalink | Comments (57)
December 11, 2009
College football playoffs
Since Congress and the President are taking positions on a college football playoff system, it must be time for Econbrowser to weigh in as well.
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Posted by James Hamilton at 06:44 AM permalink | Comments (33)
December 09, 2009
Employment Bounceback?
From Peter Hooper, Torsten Slok, Christine Dobridge, "Robust growth needed to avoid jobless recovery," Deutsche Bank Global Economic Perspectives (Dec. 9) [not online]:
Continue reading "Employment Bounceback?"
Posted by Menzie Chinn at 10:57 AM permalink | Comments (19)
December 08, 2009
Commodity prices and the Fed
I've been discussing possible explanations for the recent tendency of the dollar prices of commodities to move together. On Friday we received a very useful data point for distinguishing between the different hypotheses.
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Posted by James Hamilton at 06:57 PM permalink | Comments (28)
Exchange Rate Policies
My colleague Charles Engel has a new paper circulated by the Dallas Fed entitled "Exchange Rate Policies", which brings theory to bear on the topic. From the introduction:
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Posted by Menzie Chinn at 12:39 AM permalink | Comments (12)
December 06, 2009
Deficit links
Some quick excerpts of what others are saying.
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Posted by James Hamilton at 07:29 AM permalink | Comments (22)
December 04, 2009
The Employment Situation in Graphs
...and an initial read on monthly GDP.
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Posted by Menzie Chinn at 01:46 PM permalink | Comments (15)
December 03, 2009
Interesting Picture of the Day
What Are These Two Series?
Figure 1
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Posted by Menzie Chinn at 02:28 PM permalink | Comments (23)
Politico American Spectator's Joseph Lawler Goes Nihilist
Be afraid, be very afraid...again. From Joseph Lawler
... I take yesterday's CBO report as affirmation both that ... the number of jobs created by the stimulus cannot be determined without making judgment calls about the underlying economic model ...
Continue reading "Politico American Spectator's Joseph Lawler Goes Nihilist"
Posted by Menzie Chinn at 07:10 AM permalink | Comments (13)
December 02, 2009
Anemic recovery
Recent indictors continue to support the impression that we're in the midst of a weak economic recovery.
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Posted by James Hamilton at 08:14 AM permalink | Comments (16)