Econbrowser

Letting the EGTRRA and JGTRRA Provisions Expire

Menzie Chinn — 2010-02-08T20:47:45-08:00

Or, what would happen if we "Let Bush Be Bush". Recall the 2001 and 2003 tax cuts were written to expire, for the most part, in FY2011. The impact of extending those cuts (along with some others) is strikingly depicted in this Figure from the Center for Budget and Policy Priorities (h/t Brad Delong).

Reactions to last week's economic data

James Hamilton — 2010-02-07T07:26:00-08:00

Here I offer some thoughts on last week's numbers for employment, auto sales, and commodity prices.

Federal Debt: More Time Series

Menzie Chinn — 2010-02-06T09:38:23-08:00

Augmenting my previous post, here are two additional graphs, motivated respectively by comments by Econbrowser readers Eric Swanson (for Figure 1) and Cedric Regula and tim kemper (for Figure 2).

The January Employment Situation: Four Pictures

Menzie Chinn — 2010-02-05T10:52:02-08:00

Downward revision in the level of nonfarm payroll (NFP) employment; stabilization in employment measures (establishment, household, research series); aggregate weekly hours trend up.

Doubling Exports

Menzie Chinn — 2010-02-04T23:18:01-08:00

The Administration has committed itself to doubling exports in five years, via the National Export Initiative. Much of the journalistic coverage has focused on the regulatory, trade-credit financing, and export promotion measures being considered [0]. I wanted to take a macro oriented approach to the viewing the plausibility of this goal. Let me address this issue from a variety of perspectives.

Forecasts Compared

Menzie Chinn — 2010-02-03T18:15:24-08:00

How does the Administration's forecast of the levels of real GDP compare against those of the CBO, and the Blue Chip and Wall Street Journal surveys?

Commodity inflation update

James Hamilton — 2010-02-02T15:48:43-08:00

The view I have been forming of near-term inflationary pressures is that we're seeing two very different dynamics in play, with the dollar prices of things the Chinese can stockpile and import going up and the dollar prices of everything else (like U.S. wages and rents) under significant downward pressure. The last week seemed to bring some reprieve on the first front.

Federal Debt: The Time Series

Menzie Chinn — 2010-01-31T21:35:06-08:00

Here is a graph of Federal debt held by the public, as a share of GDP, 1990-09.

John Cochrane on the credit crisis

James Hamilton — 2010-01-31T06:34:56-08:00

University of Chicago Professor John Cochrane (hat tip: Capital Spectator) has an interesting analysis of the causes of the financial problems of the last few years.

Strong GDP growth with weak fundamentals

James Hamilton — 2010-01-29T08:54:21-08:00

The Bureau of Economic Analysis reported today that the seasonally adjusted real value of the nation's production of goods and services grew at a 5.7% annual rate during the fourth quarter. That's great news, but...

"No rate hikes likely in 2010..."

Menzie Chinn — 2010-01-28T14:57:09-08:00

Despite the somewhat startling conclusion (at least to me), the implications are pretty straightforwardly arrive at. From Michael Rosenberg, Financial Conditions Watch (Bloomberg, Jan. 27, 2010) (link added 1/29 8am) ~~[not online]~~:

Fed Funds Rate Outlook -- A Taylor Rule Perspective

With U.S. real GDP growth moving back into positive territory in the second half of 2009 following four consecutive quarters of negative growth (see Figure 1), the economic forecasting community appears to be increasingly optimistic about the U.S. economy's growth prospects for 2010-11....

G-7 Consumption Behavior and Global Rebalancing

Menzie Chinn — 2010-01-27T19:50:16-08:00

Or, the end of the consumption follows a random walk view.

Following up this post last week on Lee et al., here is another analysis of consumption behavior, but this one is cross-country. From the abstract to "After the Crisis: Lower Consumption Growth but Narrower Global Imbalances?" by Ashoka Mody and Franziska Ohnsorge:

A budget freeze?

James Hamilton — 2010-01-26T18:22:29-08:00

Here I offer some thoughts on President Obama's new proposal.

CBO's Budget and Economic Outlook Update

Menzie Chinn — 2010-01-26T09:50:50-08:00

The report is here [pdf] (link fixed 1:50pm Pacific), and the Director's blog post is here.

Chinese Trade Elasticities, Updated

Menzie Chinn — 2010-01-25T21:27:18-08:00

The price and income elasticities of Chinese trade flows are key parameters in the debate regarding the importance of Renminbi revaluation in achieving rebalancing. [0][1] I was hoping to update my estimates to incorporate data spanning the recent crisis, but Shaghil Ahmed at the Fed beat me to the punch with a new working paper that includes data spanning the recent downturn in Chinese trade flows. From Are Chinese Exports Sensitive to Changes in the Exchange Rate?