May 31, 2010
Cyclically Adjusted Budget Balance, Updated
The CBO has just released new estimates of the cyclically adjusted, or structural, budget balance (link here). They've also given the series a new name, and some new tweaks. First, observation -- the cyclically adjusted deficit is substantially smaller than the actual in 09Q4.
May 29, 2010
It's not just Europe
I see many financial commentators bravely trying to explain recent ups and downs in asset and commodity prices in terms of news coming out of Europe. But a Eurocentric perspective misses an important part of the story.
May 28, 2010
The FRTG Estimate Clarified
The TFRG range of oil spill flow reported yesterday was the lower bound. From PBS Newshour, regarding the 12,000-19,000 barrel per day estimate:
...at least two experts on the panel say that those numbers actually represent what they consider the lower boundary range of the possible amount of oil.
May 27, 2010
WWRPA at the Hearings of SUAC?
Or, "What would Rand Paul Ask at the Hearings of the Senate Un-American Activities Committee?". From AP:
"What I don't like from the president's administration is this sort of, 'I'll put my boot heel on the throat of BP,'" Paul said in an interview with ABC's "Good Morning America." "I think that sounds really un-American in his criticism of business."
May 26, 2010
The (Macro) World at Your Fingertips
Or, at least the G-20 at your fingertips.
Eswar Prasad (Cornell and Brookings) and Karim Foda have put together a new website, "TIGER: Tracking Indexes for the Global Economic Recovery".
In collaboration with the Financial Times (FT), Eswar Prasad and Karim Foda of Brookings have developed a set of composite indexes which track the global economic recovery. The Financial Times has produced the Tracking Indexes for the Global Economic Recovery (TIGER) interactive map, which appears on the FT Web site.
May 25, 2010
Tales from the BEA's GDP by Industry Release: The Private Economy and Rebalancing
The BEA today released value added and output series by industry through 2009. A few highlights: (1) the share of the private sector value added in total GDP has declined by 1.34 percentage points since 2000; (2) manufacturing's share of GDP continues to decline in nominal terms; and (3) the share of finance and insurance barely rose in 2009.
May 23, 2010
Calling recessions in real time
My latest research paper reviews efforts to supplement the declarations by the National Bureau of Economic Research as to the beginning and ending of economic recessions with determinations made by purely mechanical algorithms.
May 20, 2010
What Does a Euro Depreciation Mean for the US?
The euro has been depreciating against the dollar over the past few weeks. The implications of this development for the US depend critically on (1) the extent of the depreciation, (2) the duration, and (3) the source of the depreciation. (See Jim's post for other links.)
San Diego economy outlook
The San Diego Daily Transcript invited me to join a group of economists in discussing prospects for the local economy. You can watch the discussion in a series of videos:
May 19, 2010
Europe and the world economy
Since mid-April, the euro has depreciated 10% against the U.S. dollar and European stocks have lost 17% of their value. But markets aren't acting as though the problems will be confined to Europe.
May 17, 2010
NOAA: Warmest April Global Temperature on Record
That's the title from today's top entry on the NOAA website. And if that's not interesting enough, the subtitle reads: "Also Warmest January-April"
Pictures at a Catastrophe
(With apologies to Mussorgsky.) Here's the first:
Figure 1: MODIS/Terra image/Sky Truth, May 10, 2010.
May 16, 2010
Inflation, taxation, and the underground economy
University of Maryland Professor Boragan Aruoba (of the Aruoba-Diebold-Scotti Business Conditions Index fame) has an interesting new paper that offers another perspective on the challenges facing Europe.
May 13, 2010
Consumption and Imports: A Snapshot
The March trade release came in close to consensus (although suggesting higher 2010Q1 growth ). Comparing the advance release figures on real goods imports against the Jan-Mar figures from the trade release doesn't suggest a big revision (about 7.5 billion Ch.05$ on SAAR). I thought it would be interesting to see if there were any indications that American consumers were weaning themselves off of foreign consumer goods, using the 2010Q1 Advance release figures.
May 12, 2010
The European bailout
May 11, 2010
The Rescue Package Graphically Depicted
May 10, 2010
Quantifying Macro Spillovers
In a post regarding the transmission of financial turmoil from Europe to the US last week, I noted my research with Kristin Forbes on the determinants of the strength of financial market linkages. A more recent and extensive survey of the macroeconomic -- as opposed to financial -- linkages is provided by a recent released working paper coauthored by Ashoka Mody and Alina Carare at the IMF.
May 09, 2010
Staying sane in a crazy market
For a few exciting minutes on Thursday, the Dow-Jones Industrial Average was down a thousand points, with some major stocks momentarily falling to a penny a share. The basic story appears to be as follows. Initial strong selling in some stocks such as Procter & Gamble led the New York Stock Exchange to halt trading temporarily in a few stocks until specialists could sort out what was going on. But trading in those stocks continued on other exchanges, where as a result of their thinner books, orders to sell at any price went far down the list of existing buy bids. These lower prices triggered further automatic selling that sent some stocks all the way through the list of outstanding bids until encountering basement bids at one cent a share.
One popular meme is to attribute these fireworks to the existence of multiple trading venues that didn't all get shut down simultaneously (e.g., WSJ or NYT). But I think we should also be taking a closer look at the folks who were sending the sell orders rather than just blaming the exchanges for carrying out the instructions they received.
More on the Deepwater Horizon
From Peter Coy and Stanley Reed in Bloomberg:
Should the heaviest portion of the spill come ashore, it may cause damage rivaling the 1989 wreck of the Exxon Valdez in Alaska's Prince William Sound, despoiling the breeding grounds of species in the fragile coastal-buffer zone that provides hurricane protection.
May 07, 2010
Nonfarm Payroll Employment: The Tide Has Turned (For Now)
From the April 2010 employment situation release: Nonfarm payroll employment trends strongly upward; previous months' figures are revised upward; not seasonally adjusted figures move upward as well; the upward movement is not driven by government employment; the experimental household based quasi-payroll employment series moves upward even more strongly; and aggregate hours is now 1% higher than the level at 2009M06.
May 06, 2010
Euro Area to US Contagion?
I was wondering why the Reuters website wasn't loading on my computer. Then I got a phone call from a reporter asking about the US stock market meltdown in response to Greece...which struck me as an odd linkage. It still strikes me as an odd linkage.
May 05, 2010
How much damage does the market think the oil spill has done?
Econbrowser is pleased to host this guest contribution from UCSD Ph.D. candidate Ben Fissel, who shares a quick estimate of the economic damage from the Gulf oil spill.
The sluggish recovery
This week we received more evidence confirming that the U.S. economy has returned to positive, but still disappointing, growth.
May 03, 2010
"Reminbising China's Assets"
...Recent policies adopted by the Chinese authorities can be interpreted as allowing the rest of the world to denominate debt in renminbi. But if trading partners consider that the renminbi is subject to big jump risk, then prospects for its internationalisation are weak. ...
May 02, 2010
Where would we be without offshore oil?
As oil continues to pour into the Gulf of Mexico, I thought it might be helpful to review how we got where we are today.