Quick links to a few items I found interesting.
Barry Ritholtz has a free-ranging conversation with the irreplaceable Bill McBride (founder of the great blog Calculated Risk) in Bill McBride and the case for facts.
Jeff Miller has a useful look at some of the details behind the BLS employment figures.
The Analytics of the Greek Crisis by Pierre-Olivier Gourinchas, Thomas Philippon, and Dimitri Vayanos:
We provide an empirical and theoretical analysis of the Greek Crisis of 2010. We first benchmark the crisis against all episodes of sudden stops, sovereign debt crises, and lending boom/busts in emerging and advanced economies since 1980. The decline in Greece’s output, especially investment, is deeper and more persistent than in almost any crisis on record over that period. We then propose a stylized macro-finance model to understand what happened. We find that a severe macroeconomic adjustment was inevitable given the size of the fiscal imbalance; yet a sizable share of the crisis was also the consequence of the sudden stop that started in late 2009. Our model suggests that the size of the initial macro/financial imbalances can account for much of the depth of the crisis. When we simulate an emerging market sudden stop with initial debt levels (government, private, and external) of an advanced economy, we obtain a Greek crisis. Finally, in recent years, the lack of recovery appears driven by elevated levels of non-performing loans and strong price rigidities in product markets.
Economic Growth and Convergence, Applied Especially to China by Robert J. Barro:
From the perspective of conditional convergence, China’s GDP growth rate since 1990 has been surprisingly high. However, China cannot deviate forever from the global historical experience, and the per capita growth rate is likely to fall soon from around 8% per year to a range of 3-4%. China can be viewed as a middle-income convergence-success story, grouped with Costa Rica, Indonesia, Peru, Thailand, and Uruguay. Upper-income convergence successes comprise Chile, Hong Kong, Ireland, Malaysia, Poland, Singapore, South Korea, and Taiwan. China’s transition from middle- to upper-income status should not be hindered by a middle-income trap, which seems not to exist. The cross-country dispersion of the log of per capita GDP shows no trend since 1870 for 25 countries with long-term data. This group excludes emerging-market countries such as China and India. For 34 countries with data since 1896, there is clear evidence of declining dispersion starting around 1980. This pattern reflects especially the incorporation of China and India into the world market economy.
And finally, the Federal Reserve Bank of St. Louis invites you to play the FREDcastTM Game. Predict GDP, employment, unemployment, and the consumer price index, and see how your predictions compare with the actual figures!
Thank you, james. Re to: Bloomberg/Matt Levine “Wells Fargo Opened a Couple Million Fake Accounts”, I have been told that Wells Fargo is not the only one. The pressure is immense for our poor bankers to be successful. It’s a totally rigged and corrupt system.
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It looks it will not be Trump, but Hillary’s health.
For those of you who read McBride (Calculated Risk) here are some observations. M is a true expert at housing, and his beloved Tanta was world class in her depth of understanding of the complexity of the housing market ahead of the crisis. M is mostly an aggregator and not a forecaster. His month-ahead estimates for many time series are, from month-to-month, reasonably on the mark. Mostly, though, he reports and does not forecast. The merit of reading M is for his insights and the value you get from immersing yourself in all the small parts of the economic system (other than the hugely important financial sector). M also has a modest liberal bias which I judge distorts his relatively rare broader forecasts over time. M’s blog is currently number 4 on my list. Stockman’s is number 5. Stockman has far deeper knowledge of the economy than M, yet Calculated Risk is a bit more valuable to me because of his greater coverage of the lesser releases.
For what it’s worth Zero Hedge is far and away my top rated. I would categorize ZH’s coverage first as heavily market oriented, next economic reports and insights into them, and third a vast swath that might be labeled “liberty and politics.” This label, though, hardly does the justice to the latter. Around half (I’ve never done an exact count) of the flow of daily posts are penned by the various “Tylers.” The other half are guest pieces with added commentary by ZH. Unless you are versed in markets, much of ZH will go over your head. I mean you ought to know who W.D. Gann was etc. It is not easy to sift the wheat from the chaff in some ZH posts without this in-depth understanding. Both fundamentals and technicals are important to understanding stock and bond markets. These in turn shape near-term real growth. Also very sophisticated financial insights are penned from people on trading desks. This cutting edge is light years ahead of academia.
ZH is oftentimes prescient about something coming up in a month, three months, or even a year out. There’s also a lot of bias in the reporting of important economic releases that gets bent to the zeitgeist of ZH. You have to be quite familiar with the raw data to keep from sometimes being led astray. On the non-market, non-economics, ZH is off the charts brilliant. Mainstream economists new to ZH will develop a case of cognitive dissonance if they read much ZH. I do not think both the mainstream world and the world ZH describes can reside comfortably together in the same mind. Stick with it, though, and initial beliefs will eventually be modified to the better. Modified toward true reality? Broad reading outside the blogsphere of seminal books in multiple fields is the way to answer that question to your satisfaction. None of this is ever constant, by the way.
The only academic blog in my top 30 is Econbrowser. The posts here stay fairly true to the subject matter of real world macroeconomics, with the bonus of links to the literature which are also conduits to references to other papers, which can then be further tracked to those authors’ websites. Lots of midnight oil but also lots of serendipity.
Whut?
No Shadowstats!!!
Man can’t live by Zerohedge alone!!!