March 30, 2012
Long Term Real Ex Post Interest Rates around the Great Depression
I was wondering how long real long term (ex post) interest rates remained negative after the onset of the Great Depression. This is obviously interesting given the large amount of slack currently in the global economy, and the rampant fears of crowding out (see ) as governments continue to run deficits (and are likely to continue as leaders refuse to raise tax revenues). Fortunately, Lawrence Officer and Sam Williamson have done the profession an enormous service by compiling online historical series on many variables, including interest rates and price, at Measuring Worth. It turns out ex post real rates were really low for a very long time...
March 29, 2012
International Trade, an Enhanced Petroleum Transportation Network, and Gasoline Prices
Don't expect a big impact on gasoline prices from opening up an oil pipeline to the coast.
I am a little late to this debate   , but I wanted to highlight something that is clear from basic international trade theory. Opening up to international trade changes relative prices, and in fact raises some prices. If a pipeline were to be built which could transport oil currently produced in the Midwestern US to the Gulf Coast, then to the extent that oil in the Midwest is lower priced than on the coasts, then average US oil prices may actually rise with completion of the pipeline.
March 28, 2012
A rational reason for high oil prices
"There is no rational reason for high oil prices," writes Ali Naimi, Saudi Arabian Minister of Petroleum and Mineral Resources, in today's Financial Times. Well, I can think of one-- if oil prices were lower, the world would want to consume more than is currently being produced.
March 26, 2012
Simon Johnson and James Kwak on Learning -- or Not -- from the Past
I’ve been reading some history, from Simon Johnson and James Kwak's new book, White House Burning. And it strikes me how ahistorical (or just plain ignorant of history) so many of the prescriptions for fixing up the economy are. For instance, the tax cutting ideology of today is merely a recapitulation of what has caused America to come to grief at the Nation’s birth.
March 25, 2012
Disentangling the channels of the 2007-2009 recession
Harvard Professor James Stock and Princeton Professor Mark Watson presented a very interesting paper last week at the Spring 2012 Conference for the Brookings Papers on Economic Activity. Their paper studied similarities and differences between the 2007-2009 recession and other U.S. business cycles.
March 22, 2012
Chinn-Ito Financial Openness Index Updated to 2010
The Chinn-Ito KAOPEN index -- a measure of de jure financial openness -- has just been updated to 2010 (site here). The results show some slight retrenchment in recent years, particularly in LDCs and emerging markets, as shown in Figure 1.
Assume a Can Opener*
Some reflections on the new Ryan plan.
The CBO provides some numbers (it's not a "score"), with a caveat:
March 21, 2012
Why do gasoline prices differ across U.S. states?
Gasoline prices differ substantially across different parts of the United States. For example, the average price in Illinois is currently 70 cents/gallon higher than that in Wyoming, and California motorists pay 86 cents/gallon more than the folks in Wyoming. Why is that?
March 20, 2012
Revisiting the Determinants of the Term Premium
In last Thursday’s post, John Kitchen recounted our joint work on what amount of foreign financing would be required to make consistent projections of government debt, and short and long term interest rates. That article from International Finance is now freely available on the Council on Foreign Relations website here.
March 19, 2012
“The Eurozone in Crisis: Origins and Prospects”
Time to breathe a sigh of relief, with resolution of the Greek bailout? Not so fast. Greece is likely to need re-adjustments to its plan  Plenty of challenges remain in the eurozone; PIMCO's El-Erian says Portugal is next . In fact, as Jeffry Frieden and I argue, the resolution of the problems facing eurozone policymakers is likely to be contentious and prolonged. From an article forthcoming in the Spring issue of the La Follette Policy Report, by me and Jeffry Frieden (since the article is not yet published, the working paper version is here):
March 18, 2012
Strategic Petroleum Reserve to the rescue
The United States and Britain have apparently been discussing a joint release of strategic petroleum stockpiles.
March 15, 2012
Guest Contribution: “Financing U.S. Debt”
In a Guest Contribution today, John Kitchen (U.S. Treasury, formerly Chief Economist, Office of Management and Budget) addresses the issue of “Financing U.S. Debt: Is There Enough Money in the World -- and at What Cost?”. The comments are based on a paper recently published in International Finance (Winter 2011), co-authored with Menzie Chinn. The views expressed are the author's and do not represent the views of the U.S. Treasury.
March 14, 2012
Links for 2012-03-14
Quick links to a few items I found interesting.
March 13, 2012
“Scoring” the Romney Economic Plan
Well, this could be a short blogpost, because in Mitt Romney’s words, “frankly it can’t be scored” [The Hill]. However, I think it of interest to consider what it would take to make the Romney plan deficit neutral, as he has argued it would be.
March 12, 2012
The Amazing Prescience of the Capitol Steps
I've been a fan of the Capitol Steps for decades now, but only recently have I fully appreciated the prescience of their musical insights. I hope Econbrowser readers will too, by singing along to this twenty year old song, "Favored Right Wing" [sample], sung to the tune of "My favorite things". (This song is so old, that no complete online version exists, and I had to laboriously transcribe the words by hand(!), so apologies if there are a couple errors.)
2012 Econbrowser NCAA tournament challenge
Enough on oil prices and the Fed. I know what you've all really been waiting for is the 2012 Econbrowser NCAA tournament challenge, where you can test your skills (and luck) at predicting the outcomes of the U.S. college men's basketball tournament. All you have to do is go to the Econbrowser group at ESPN, do some minor registering to create a free ESPN account if you haven't used that site before, and make your picks for the winners of each game. Just make sure you complete your entry before Thursday, because the Econbrowser group only allows predictions before the tournament begins. And be forewarned that some of the people who enter this group really know what they're doing!
March 11, 2012
Sterilized quantitative easing
Jon Hilsenrath of the Wall Street Journal reported last week that Federal Reserve officials are evaluating the possibility of a measure that the journal describes as "sterilized" quantitative easing. How would this work, and what would it be intended to accomplish?
March 09, 2012
The February Employment Release
I'm sure there's a way to spin the February employment release in a negative way -- see for instance JEC Republican vice-chair Brady's take here -- but I think it looks pretty good for a recovery after a combination financial crisis/housing bust/recession. 
March 08, 2012
Wisconsin Employment Climbs ... to 12,500 below January 2011 Levels
The Wisconsin Department of Workforce Development today released figures for January employment revised to account for benchmark revisions. Nonfarm payroll employment and nonfarm private employment both rose. But the latter just barely exceeded levels of a year previous, while nonfarm payroll employment fell short.
March 07, 2012
Re-Examining that "Massive Stimulus"
I keep on seeing references to "massive stimulus", so much I have this feeling of innumeracy everwhere. Here's one example, provided by a commenter on Free Exchange the day before yesterday, responding to the linked article of Brad Delong:
March 06, 2012
Oil prices and the U.S. economy
Here's why I believe that the current high price of oil is not enough to derail the U.S. economic recovery.
March 04, 2012
The power of habit
Charles Duhigg has a very interesting new book called The Power of Habit: Why We Do What We Do in Life and Business.
March 03, 2012
Global Land Sea Anomaly, Global Climate Change, etc.
Since my last post on government spending increase (it's actually decreasing) was hijacked by those focused on denying the impact of human activity on global climate, I thought it useful to recap the global land sea anomaly . It's also useful to recall that on one side is Texas Governor Perry , and the other side the National Academy of Sciences . I think that dichotomy speaks volumes.
March 01, 2012
The “Ever Expanding” Government Illustrated, Part III
- Real government nondefense spending on goods and services is declining, and is declining relative to real GDP.
- The ratio of government outlays to nominal potential GDP is declining.
- Total civilian government employment is declining, and is declining as a share of total nonfarm employment.