Author Archives: Menzie Chinn

Caligula Trump Asks Who Will Rid Me of These Troublesome Economists

I have been remiss in not bringing people’s attention to this purge. From Politico:

Economists in the Agriculture Department’s research branch say the Trump administration is retaliating against them for publishing reports that shed negative light on White House policies, spurring an exodus that included six of them quitting the department on a single day in late April.

If you do not see a pattern in the bullying of Census, the extreme nontransparency of rules at BIS (Bureau of Industry and Security), and the attempt at Board-stuffing at the Fed, then you are blind.

A Re-Run: “Who Will Relent – Xi or Trump? On Actual and Perceived Payoff Matrices”

“Re-run” is an archaic phrase from my generation. It means to replay a previously recorded and broadcast television show. Here, this “rerun” seems appropos. I think that the cost to Xi of backing down is even greater given Trump’s tariff threat came close to the day of the 100th Anniversary of the May 4th Movement — a sensitive occasion for the CCP. From an August 2018 post.

Notable differences. US GDP fundamentals less robust than in August. Chinese growth fundamentals (in the short run) are stronger. Remember this despite the fact that that Liu He is joining the negotiating team coming to Washington, D.C.

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If Campbell Harvey’s Specification Is Right, We’re (Still) in Trouble

Robust GDP growth, employment rising on pace, perceived recession risk declining… as in this headline. The latest issue of the Economist has an article entitled Fears of recession have faded. But I’m reminded that Campbell Harvey, who wrote early papers on the subject of yield curve predictors, relies on the 5yr-3mo spread (for growth, not recession). And that implied specification signals 44% probability of recession in 2020M04.

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Winning: US Agriculture Edition

Figure 1: Real proprietor farm income with inventory valuation adjustment and capital consumption allowance (dark blue), and 4 quarter trailing moving average (red), both in billions of Ch.2012$, SAAR. Deflated using GDP deflator. Source: BEA 2019Q1 advance release, and author’s calculations.