During the summer, I had the good fortune to attend two excellent conferences focused on new findings in exchange rate economics (yes, not all economic research is focused on the financial crisis and recession). The first was a Bank of Canada-European Central Bank conference Exchange rates: The global perspective, and the second was the NBER International Finance and Macroeconomics Summer Institute session “Exchange Rates and Relative Prices”.
Yearly Archives: 2009
Links for 2009-08-10
I spent the last week of July as a visiting scholar at the Federal Reserve Bank of Atlanta, home to Macroblog and a number of superb economists. Their Center for Quantitative Economic Research is now going to be reporting my GDP-Based Recession Indicator Index, as you’ll see from following the link.
Jeff Miller has been looking carefully into the BLS birth-death adjustments (
[1],
[2],
[3]).
And I was interested in this story from the Wall Street Journal:
Houston-based Apache Corp. [APA] has agreed to provide natural gas for export to Asia through a proposed project in Canada, the latest sign that huge gas discoveries in North America are reshaping global energy markets. Kitimat LNG Inc., the Canadian company planning to build the liquefied-natural-gas export terminal in Kitimat, British Columbia, will announce Monday that Apache has become the second major North American gas producer to sign on to the project. Last month, another Houston-based gas producer, EOG Resources Inc., signed a similar deal….
“We’re confident that there’s going to be plenty of gas available for export for a long time,” said Greg Weeres, vice president of Pacific Northern Gas Ltd., which is planning to build a pipeline to supply gas to the Kitimat facility.
It’s not over yet
Some are greeting Friday’s employment report as an all-clear signal. But my advice is, keep your helmet on– they’re still shooting real bullets out there.
Employment, Hours, and Estimated Output
Some observations on the employment situation and other economic indicators: (1) Not only is nonfarm payroll employment slowing its rate of descent, so is private employment; (2) but perhaps more dramatically the decline of aggregate hours halted last month; (3) the rate of decrease has diminished even faster for civilian employment measured by the household survey, and indeed; (4) the household (research) series adjusted to conform to the payroll series is now improving; and (5) a first “estimate” of July GDP supports the case for stabilization of output.
Pricing of interest rate risk in fed funds futures contracts
Do current fed funds futures prices signal a belief by market participants that the Fed may begin raising interest rates early next year? My latest
research paper
suggests not.
China’s Impact on the Global Economy: A Symposium
As attested to by the large amount of coverage of the recent US-China Strategic and Economic Dialog [0] [1], [2], [3], [4],[5] China looms large in any discussion of the world economy. One of the most important contributors to the informed discussion on this subject was Brad Setser, at the Council on Foreign Affairs and before that at RGE Monitor. Unfortunately, Dr. Setser will be leaving the blogosphere, so his insights will be missed (although fortunately for us, he’ll be adding his input at the NEC, where we all wish him well).
So now, there’ll be even a greater need for reasoned analysis. One addition to the discussion is a Symposium on China’s impact on the global economy just published in Pacific Economic Review (August 2009). From my introductory chapter to the symposium:
Over the past decade, China’s presence in the global economy has grown
increasingly large. Along many dimensions, China is, rightly or wrongly,
perceived to have an enormous impact. In the trade arena, China is now widely
considered to be the world’s workshop, displacing some traditional exporters
of labour-intensive goods, even as its economy is ever more closely woven into
the fabric of the increasingly fragmented chain of production….
Current economic conditions
July auto sales might be viewed as the first solid indicator of an improving U.S. economy. But what does it really tell us?
Comparing the Current Recession and the “1980-82 Recession”
At least one observer has argued that the current recession is not as bad as that of the 1980-82 recession, when those two separate recessions (1980Q1-1980Q3; 1981Q3-1982Q4) are considered as one (see [1] [2]). Here is my interpretation of this assertion, updated to use the latest GDP data, and normalizing (log) GDP on the recession start dates.
Multipliers, under Differing Monetary Regimes
Here’s another installment in a series attempting to move the discussion from “my estimate vs. your estimate” (or “prior”, as the case may be) [1] [2] [3] [4] [5] [6] to something more constructive (and hopefully more nuanced). From the conclusion to “Expectations and Fiscal Stimulus” by Troy Davig and Eric M. Leeper:
This paper has embedded estimated Markov-switching rules for U.S. monetary and fiscal policy into an otherwise conventional calibrated DSGE model with nominal rigidities to deliver some quantitative predictions of the impacts of government
spending increases. When monetary and fiscal policy regimes vary — from active monetary/passive fiscal to passive monetary/active fiscal to doubly passive to doubly active — government spending multipliers can vary widely. An increase in government spending of $1 in present value raises output by $0.80 in present value under
[Active Money/Passive Fiscal] AM/PF, while it raises output by as much as $1.80 in present value when monetary policy is passive. In our simple model, this translates into a decrease in consumption of $0.20 in present value under AM/PF, but an increase in consumption of about $0.80 in present value under passive monetary policy.
Cash for clunkers
A victim of its own success?