Author Archives: Menzie Chinn

Guest Contribution: “Importer and Exporter Market Share in Exchange Rate Pass-Through”

Today we are pleased to present a guest contribution written by Michael Devereux at the University of British Columbia and Wei Dong and Ben Tomlin at the Bank of Canada. The views expressed below are those of the authors and do not represent those of the Bank of Canada. This post is based on a revised version of this paper.

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The Seattle Minimum Wage Increase: Disaster or Not?

Dark warnings were voiced in the wake of the passage of the minimum wage ordinance. “Seattle’s Minimum-Wage Hike Is Sure to End in Disaster”. “Seattle sees fallout from $15 minimum wage” In an early — and widely debunked — assessment, Mark J. Perry writes “New evidence suggests that Seattle’s ‘radical experiment’ might be a model for the rest of the nation not to follow”.

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The Real Term Spread and Recessions

There’s an argument being made that because of the zero lower bound, the standard nominal term spread is unlikely to be as accurate a predictor of recessions as it has in the past. A prominent example of this view circulating now is that forwarded by Deutsche Bank’s Dominic Konstam; his analysis indicates a 60% likelihood of recession (WSJ RTE), in contrast to the estimates obtained from the standard model, ranging in the low teens (see for example this post).

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