The Kansas Economy: Three Pictures

The Philadelphia Fed released coincident indices today. Figure 1 shows state-by-state 3 month trends. Needless to say, the outlook for Kansas — that laboratory for supply side nostrums — is not auspicious.


Source: Philadelphia Fed, accessed 26 Oct 2016.

While Alaska seems to be in the running for worst performing, in fact the 3 month (annualized) decline of 4.5% for Kansas is the worst in the 50 states.

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The Mexican Peso and Prediction Markets

I was talking about prediction markets and asset prices (the Mexican peso and the Presidential election, and the pound and Brexit) in my classes this week. It struck me a good time to update this post on the peso’s movements as the odds for a Democratic win change.


Figure 1: USD/MXN exchange rate (blue), and odds of Democratic win in Presidential election, end of day (red). Observation for 10/20/2016 is as of 2:30PM Eastern time. Exchange rate defined so up is MXN appreciation. Source: FRED, Pacific Exchange Services, and Iowa Election Markets.

The adjusted R2 of a bivariate regression of first differences regression (exchange rate in logs) is 0.08, pretty good on a high frequency time series, in my book (t-stat with HAC robust errors is 2.06).

Global Temperature Anomaly, Through September


Source: NOAA

The highest point estimate for the anomaly is for 2016. For 2014, the 95% interval is ±0.09°C [1]. If that is ballpark for the 9 months estimate, then one can’t say that 2016 is hotter than 2015 (with statistical significance at the 5% msl), but can say it is hotter than 1998, a year often focused on by the “hiatus”-ers.

Update, 5:08PM Pacific: Here is a trailing 60 month moving average, ending observation for September 2016.


Source: NOAA