Capital Goods Imports and Equipment Investment

 

The last time we saw equipment investment declining was 08Q1; and capital goods imports  in 08Q3

Figure 1: Imports of capital goods other than automobiles (blue, left scale), and equipment investment (brown, right scale), both in billions of Ch.2012$, SAAR. Source: BEA, 2012Q2 2nd release.

Given depreciation, net equipment investment is probably declining.

In Bizarro World

Bryan Riley at NTU brings my attention to this press release:

The Coalition for a Prosperous America (CPA) has won the prestigious Edmund A. Mennis Award from the National Association for Business Economics (NABE) for a study showing that a permanent tariff on China would benefit the US economy. The award from the nation’s leading association of business economists confirms a growing acceptance of pro-US trade policies needed to address the nation’s economic challenges.

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Cooperation with “Red China”

Reader Ed Hanson remarks:

Red China has been protectionist since its beginning. [A]nd certainly has since it joined the worldwide trade in the 80’s or so. Did protectionism make it weaker?

In light of Mr. Trump’s remarks today:

“China should start an investigation into the Bidens, because what happened in China is just about as bad as what happened with Ukraine.”

What do people like Ed Hanson (I’m guessing old, and still worrying about Commies, but thinking Russians are ok) think Mr. Trump should bargain away in terms of trade sanctions on “Red China” in order to get that investigation?

 

James Hamilton at UW Madison: Predicting the Next Recession

The video of Jim Hamilton’s inaugural Juli Plant Grainger Institute lecture at the University of Wisconsin-Madison Economics is now up!

Click here for YouTube video.

Must see for anybody who is serious about critically reading the tea leaves regarding an incipient recession (Spoiler: As of 9/11, he was sceptical a recession had begun). Interesting conjecture about using holding period returns on Treasury securities of different maturities to isolate a expectations hypothesis of term structure component (my reading).

(Aside: for conventional wisdom, see my Econ 435 notes for Econ on EHTS/yield curve/recession prediction)