Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate.
Author Archives: Menzie Chinn
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)
Soybeans: Victory Is Around the Corner
On July 9, 2018, about 14 months ago, reader CoRev wrote:
Those of us arguing against the constant anti-tariff, anti-Trump dialogs have noted this will probably be a price blip lasting until US/Chinese negotiations end. We are on record saying the prices will be back approaching last year’s harvest season prices.
Hah, hah, hah, hah! Time to look at prices relative to March 23, 2018, when Trump announced imposing Section 301 tariffs on Chinese goods…
Term Spreads and Economic Policy Uncertainty
In August, an elevated economic policy uncertainty index was associated with an increasingly inverted yield curve. The measured Economic Policy Uncertainty (EPU) index as of today is 582 (sure to be revised, but still…).
Life Moves Fast: “Will Donald Trump be impeached by year-end 2019?”
56% at noon Pacific today, according to PredictIt:
That is, articles of impeachment approved within the next three months.
“The Economic Consequences of Trump’s War on Multilateralism”
That’s the title of my October 18th Global Hot Spots talk, sponsored by the Wisconsin Foundation and Alumni Association (Fluno Center, 1:30-2:30).
Meanwhile, in the Macroeconomy
Business cycle indicators mixed, nowcasts overall sideways, manufacturing down.
Whistle-Blower Complaint: Audio, Text
“A Closer Look at Japan’s Rising Consumption Tax”
That’s an important new Economic Brief by Thomas A. Lubik and Karl Rhodes of the Federal Reserve Bank of Richmond:
Japan plans to raise its national consumption tax next week from 8 percent to 10 percent. Some commentators and economists have blamed previous consumption tax increases for causing recessions in 1997 and 2014, but little statistical analysis has been published to support or refute such claims. This Economic Brief highlights new evidence that significant changes in Japan’s household consumption behavior did in fact coincide with the 1997 tax hike.
This issue is important as Japan is on the cusp of raising its consumption tax in just a few days.