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 on February 21st in Project Syndicate.
Author Archives: Menzie Chinn
The “Unsustainable” US-Mexico Trade Deficit
From CNNMoney, President Trump:
“With Mexico we have $70 billion in deficit. … It’s unsustainable. … We’re not going to let it happen, can’t let it happen,”
Taking the President at His Word: Deportation As a “Military Operation”
Full quote:
“We’re getting really bad dudes out of this country, and at a rate that nobody’s ever seen before,” Trump said Thursday. “And they’re the bad ones. And it’s a military operation.”
The US-China Bilateral Trade Balance in Value Added
As the Administration mulls over possible trade actions against China, it is important to concede official trade statistics do provide in some sense a misleading picture of US-China bilateral trade — but not misleading in a way such that if corrected bolsters the Administration’s arguments.
The Trade Deficit Is Nearly 15% of GDP (“Alternatively Defined”)!
If we count only the import side and not the export side of re-exports, as some in the Administration have suggested, we might as well go “whole hog” and redefine the trade balance completely: Let’s count imports, but not exports.
Figure 1: The trade balance defined as net exports/GDP (blue), and the trade balance excluding exports (red). Source: GDP advance release for 2016Q4, and author’s calculations.
Utilizing the National Guard to Deport Investigate, Identify, Apprehend, Arrest, and Detain Undocumented Immigrants
[Correction to title: it’s been pointed out that the National Guard will not necessarily be empowered to actually deport individuals; they can only have “authority to investigate, identify, apprehend, arrest, detain and conduct searches”. The actual deportation (transportation to port or border) would presumably be undertaken by other agencies. MDC 2/18 10:51AM Pacific]
What are the fiscal and economic implications?
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Would a Gold Standard Result in Fast Adjustment to Parity?
Judy Shelton argues that “Free trade needs sound money”:
…[T]he time has come to develop a comprehensive approach to international monetary reform compatible with genuine free trade under free-market conditions. If markets are to function properly, money needs to convey accurate price signals; that won’t happen as long as governments can manipulate exchange rates.
This Makes No Sense
Judy Shelton on currency manipulation.
A New Approach to Tackling Chinese Currency Manipulation That I Do Not Understand
From Bloomberg:
President Donald Trump’s administration is considering a new tactic to discourage China from undervaluing its currency that falls short of a direct confrontation…
“Who Will Pay for the Wall?”
That’s the title of a new post written by me, on Econofact. Short answer to the question posed: not likely just the Mexicans…