July 31, 2010
The 10Q2 Advance GDP Release: Cautionary Notes from Revisions
The 2010Q2 advance GDP release has been covered by Jim, as well as others. [RTE/Izzo] [CEA] [FreeExchange/RA] [CR] [MA] The release was accompanied by an annual revision of data extending back to data for 2007Q1. This revision alters our understanding (or lack of understanding in the cases of certain people) of the evolution of this recession. Here are the points I gleaned.
July 30, 2010
About that recovery you ordered
"We have met the enemy and he is us," Pogo used to say. Well, we've also now met the recovery, and he is ugly.
July 29, 2010
NOAA: Past Decade Warmest on Record
Figure 1: Source: NOAA.
July 28, 2010
Conference: China in the Global Economy
Recently, I had the pleasure of participating in a CES-ifo workshop on "The Evolving Role of China in the Global Economy," co-organized by Yin-Wong Cheung and Jakob de Haan. The conference agenda is here. The paper topics spanned issues ranging from monetary independence and integration into global financial markets, SOE access to credit and SOE efficiency, Chinese saving/consumption behavior, econometric models of China-global interactions, and the determinants of Chinese FDI in the rest-of-the-world.
July 26, 2010
More disappointing news
Just a quick note on a couple of new data releases today.
July 25, 2010
Update on the bumpy recovery
I was curious to take a look at how Mike Dueker's Business Cycle Index and other measures assess the current situation.
July 22, 2010
Bruce Bartlett Reminds Us: WMD, Medicare Part D, Steel Tariffs, Harriet Miers
Bruce Bartlett reminds us of the George W. Bush: Screwup-in-Chief, 2001-2008. Short version: Iraq, WMD, unfunded Medicare Part D, Sarbanes-Oxley, Katrina, Harriet Miers, no vetos until second term, tax rebates+credits and nonpermanent tax cuts, steel tariffs, ag subsidies, keeping Cheney, compassionate conservativism, signing McCain-Feingold after threatening to veto, neutering SecTreas, and GSEs.
July 21, 2010
China land prices
Tell me if you think this story sounds familiar.
July 19, 2010
Guest Contribution: Should central banks target higher rates of inflation?
By Olivier Coibion, Yuriy Gorodnichenko, and Johannes Wieland
Today, we're fortunate to have Oli Coibion, and Yuriy Gorodnichenko, Professors of Economics at William and Mary and at UC Berkeley, respectively, and Johannes Wieland, Ph.D. candidate at UC Berkeley, as a Guest Contributors.
July 18, 2010
The Bureau of Labor Statistics reported Friday that the seasonally adjusted consumer price index declined in June to the lowest level since November. When we start to talk about the level of the CPI rather than its rate of change, you know that deflation could once again become a key concern.
July 15, 2010
The Return of Portfolio Balance Models: "The Large Scale Asset Purchases Had Large International Effects"
In a new working paper, the St. Louis Fed's Christopher Neely argues The Large Scale Asset Purchases Had Large International Effects.
The Federal Reserve's large scale asset purchases (LSAP) of agency debt, MBSs and long-term U.S. Treasuries not only reduced long-term U.S. bond yields also significantly reduced long-term foreign bond yields and the spot value of the dollar. ...
July 14, 2010
Modest relief on energy costs
A reader requests that we update some of the charts we've used to track U.S. energy expenditures.
July 13, 2010
A Comment on Keith Hennessey's Deficit Defense
In this post, Keith Hennessey takes issue with President Obama's assertion there were spiraling deficits during the President G.W. Bush years. He presents this graph.
Thinking about Trade and Trade Costs
One of the big issues facing policymakers around the world is the evolution of the pattern and volume of international trade flows. I recently participated in a very useful conference that included a number of papers that shed light on this important question. The conference, "Trade Costs and International Trade Integration -- Past, Present and Future," organized by Dennis Novy (Warwick University), David Jacks (Simon Fraser University), and Christopher Meissner (University of California, Davis), and sponsored by the UK's ESRC, and the University of Warwick's CAGE.
July 12, 2010
Measuring the Trilemma (with Special Reference to China)
Yesterday, Greg Mankiw discussed the trilemma in international finance, noting that countries can trade off between capital mobility, monetary policy autonomy, and exchange rate stability, but cannot fully all three of those objectives at a given time. In this post, Hiro Ito cites work with Joshua Aizenman and myself, in which we quantified how countries have traded off these objectives over time (paper here).
July 11, 2010
Who's buying all that debt?
I've been taking a look at what happened to the demand for U.S. Treasury bills and bonds as a result of the financial crisis. Here's a summary of some of the data that I found interesting.
July 10, 2010
Michael Rosenberg: Is the Euro Embarking on a New Long-Term Cycle of Currency Weakness?
From Bloomberg's Mike Rosenberg, in FX Market Insights (June 28):
The euro is now two years into what might be another long-term downtrend. ...
July 09, 2010
Links for 2010-07-09
A new study by Fed economists Neil Bhutta, Jane Dokko, and Hui Shan concludes that the median borrower does not strategically default until equity falls to -62 percent of their home's value.
Karl Smith is not impressed by the USDA's claims about the effects of a soda tax on childhood obesity.
Political Calculations compares the attractiveness to businesses of locating in California versus Texas.
Some analysts have claimed that basketball star LeBron James saved himself $12 million in taxes by choosing to play in Florida rather than New York, though Aaron Merchak, David Henderson, and Frank Stephenson refine the calculation.
And some UCLA scientists found that brain scans can predict what you're going to decide better than you can.
July 08, 2010
May Global Surface Mean Temp Anomalies
I await June figures with bated breath. From NOAA:
July 07, 2010
Still in Search of Inflationary Expectations
Given concerns about large budget deficits and quantitative easing feeding into inflation even as actual inflation was falling, I wondered what standard measures indicated. This follows up on the same question I posed in May of last year.
July 06, 2010
Bob Hall on financial frictions
Via Mark Thoma and Arnold Kling, the Federal Reserve Bank of Minneapolis published an interview with Stanford Professor Robert Hall. The interview is terrific not just because Bob is a very smart guy, but also because interviewer Douglas Clement did a great job choosing the right questions. The whole thing's worth reading, but I wanted to focus today on Bob's comments on the role of financial frictions in the crisis and policy options to address them.
July 05, 2010
A Specter is Haunting America
...The specter of fiscal mindlessness
I'm just back from two weeks in Europe. During that time, growth indicators have signaled a slowdown  in the midst of a massive negative output gap , while a substantial bloc in the Congress refuses to think in a sensible fashion about fiscal policy. This point is most forcefully illustrated by the inability of the Senate to move forward on extending unemployment insurance. (It makes me wonder if some were asking the question, "Are there no poorhouses?")
July 03, 2010
No double dip
Although many people are concerned about the possibility of a second economic downturn, I continue to see an economy that is growing, albeit significantly more slowly than we would have wanted.