Some back-of-the-envelope calculations: If we get what President Elect Trump says he wants — no depreciation of the yuan — what happens to the Treasury 10 year-3 month spread?
Author Archives: Menzie Chinn
Guest Contribution: “The Yellen Rules”
Today, we are pleased to present a guest contribution written by Alex Nikolsko-Rzhevskyy, Associate Professor of Economics at Lehigh University, David Papell and Ruxandra Prodan, respectively Professor and Clinical Associate Professor of Economics at the University of Houston.
Manufacturing Employment and Three Episodes of Dollar Appreciation
Mark Thoma comments on the impact of the likely dollar appreciation:
A stronger dollar will make imports cheaper for American consumers…The U.S. economy is now strengthening and approaching full employment, but it’s not quite there yet. So I expect the stronger dollar to have some employment effects, but I don’t expect them to be substantial…
President Elect Trump Hints at Bretton Woods III
Via Twitter, yesterday afternoon:
Guest Contribution: “Shadow Rates, Forward Guidance, and Unconventional Monetary Policy”
Today we are pleased to present a guest contribution by Yi Zhang, Ph.D. candidate at the University of Wisconsin-Madison. This post draws upon this paper.
The “Deindustrialization of America”, in Pictures
From Donald J. Trump, March 14, 2016:
…under decades of failed leadership, the United States has gone from being the globe’s manufacturing powerhouse — the envy of the world — through a rapid deindustrialization…
The Yuan: Nominal Bilateral vs. Basket vs. Real Trade Weighted
The yuan is sliding against the dollar. What about against other currencies?
Day One Approaches! Currency Manipulation, China and the Big Mac Index
Among the many promises made by President Elect Trump, one was to declare China a currency manipulator on his first day in office. Besides the logistical difficulties of doing so without a Treasury Secretary in place, there are the minor difficulties of what the data indicate (I know, I know, facts seem of little import these days, but what the heck). In addition to the legally defined concerns Brad Setser has raised, I think it is useful to assess China’s currency using a commonly used measure of currency misalignment.
Further Dollar Appreciation?
As noted in my last post, the collision of expansionary fiscal and counter-cyclical monetary policy will result in an appreciated dollar. How much more appreciated?
Implications for the Agricultural Economy of Fiscal Policies Proposed by President Elect-Trump
In short: Rural areas will not like what they get from a combination of expansionary fiscal/counter-cyclical monetary policy.