August 29, 2012
Q&A on oil prices
I recently did an interview with OilPrice.com on a range of issues related to oil prices. Here are some excerpts.
August 28, 2012
Expectations, Uncovered Interest Parity, and the Zero Interest Bound: New Results
One of the most robust findings in international finance is that interest differentials do not point in the right direction for subsequent exchange rate changes. This means that dollar returns on say one year certificates of deposit in the US and in the UK are not on average equalized. In Chinn and Meredith (2004), we show that this anomaly -- if it is one -- disappears as one goes to longer horizons. This finding was discussed previously here.
August 26, 2012
U.S. monetary policy since the financial crisis
The Federal Reserve Bank of New York announced on Thursday that it had sold the last remaining securities from its Maiden Lane III portfolio, successfully closing the chapter on its assistance to insurance giant AIG. I thought this would be a good occasion to review the various measures that the Fed implemented over the last 5 years-- what they were attended to accomplish, what they did accomplish, and the significance of Thursday's announcement.
August 24, 2012
A Debate in Foreign Affairs: Stimulus or Reform
From an exchange in the September/October issue of Foreign Affairs, with Raghuram Rajan, Karl Smith and myself. I write in my comment:
August 22, 2012
Federal receipts and expenditures
I was interested to take a look at the trends in receipts and expenditures of the U.S. federal government over the last 40 years.
August 20, 2012
Guest Contribution: “Sticky Prices, Store-Switching, and Effective Price Flexibility”
Today, we are fortunate to have a guest contribution written by Olivier Coibion (UT Austin), Yuriy Gorodnichenko (UC Berkeley), and Gee Hee Hong (Bank of Canada); it is based on The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications.
August 19, 2012
The Ryan Plan and bipartisan compromise
I have a dream.
August 16, 2012
Romney Campaign on the Tax Policy Center study: “Objective, Third-Party Analysis”
Or, he was for the Tax Policy Center before he was against the Tax Policy Center, and how to assess think tank research.
August 15, 2012
Recent developments in oil markets
The price of Brent crude oil fell $35/barrel between April and June. But increases this summer have taken about $25 of that back.
August 13, 2012
Central Bank Balance Sheets and Inflation
Given several prominent policymakers have worried about central bank actions leading to high inflation, (e.g. Representative Ryan) it seems reasonable to see how expansions in central bank balance sheets correlate with inflation.
August 12, 2012
How long can Japanese bond prices defy gravity?
August 11, 2012
Representative Paul Ryan's Economic Weltanschauung
Recapping my analyses of his budgetary and macroeconomic views, including supply side, interest and inflation rates, and command of economic history.
August 10, 2012
Guest Contribution: Innocent Bystanders? Monetary Policy in the U.S. and Inequality
Today, we are fortunate to have a guest contribution written by Olivier Coibion (UT Austin) [interviewed here by Prakash Loungani], Yuriy Gorodnichenko (UC Berkeley), Lorenz Kueng (Northwestern) and John Silvia (Wells Fargo); it is based on IMF Working Paper No. 199
August 09, 2012
Non-Government GDP and Employment: Revisiting Lazear’s Comparative Analyses
Reader Peter Schaeffer writes in comments to my rebuttal to Ed Lazear that demonstrates that ex-defense GDP growth is higher under the Obama administration than during the comparable period of the G.W. Bush administration:
August 08, 2012
The Federal Reserve's Maturity Extension Program and Treasury debt management
The Fed giveth and the Treasury taketh away.
August 07, 2012
Guest Contribution: "The Making of America’s Imbalances"
August 06, 2012
Governor Romney Recalibrates Employment Forecasts
Last May, Governor Romney stated that in a typical recovery, monthly employment increases should be about 500,000 per month . The sheer implausibility of that statement (assessed in this post) has induced him to reduce his estimate (without explanation of the change) to 250,000 per month. . In Figure 1, I provide a plot of the implied path, as well as that from his May statement (which made me laugh for days!). In other words, his forecast has moved from clearly “Heritage Foundation space” to something that seems a bit less implausible, even if not clearly motivated by a specific model
August 05, 2012
Is this as good as it gets?
Several other new indicators confirm the message from the Q2 GDP report: the U.S. economy continues to grow, but at a discouragingly slow rate.
August 03, 2012
Adventures in (Wisconsin) Data Interpretation: Selective Sample Choice and Seasonal Nonadjustment Edition
But, oddly, [Wisconsin] education and government employment increased in Wisconsin by more than 13,000 during the Jan-Jun period under uber-neo-con-anti-government Gov. Walker.
The July Employment Situation
Today, BLS released data for July. Nonfarm payroll employment growth of 165,000 exceeded expectations of 100,000 (Bloomberg). However, overall, employment indicators continue to rise only slowly.
August 02, 2012
Kevin "Dow 36,000" Hassett et al. Critique the Tax Policy Center Study
On a conference call with reporters, Romney advisers ripped the study -- conducted by the Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute -- as “biased” and “a joke.”
August 01, 2012
The Fed stands pat, at least for now
Today's statement from the FOMC, the decision-making body for the Federal Reserve, basically said that, yes, the economy has worsened since the FOMC's previous meeting, but no, they're not going to do anything about it. At least, not right now.