The recent weakness in emerging market currencies, and implementation of the taper, are sure to be topics of discussion at the G-20 meetings in Australia. While the imminent retrenchment in quantitative/credit easing is responsible for some of the currency movements of late, I’m not sure this is the only way to look at recent events; nor do I think we need see a replay of previous episodes of currency crises in response to US monetary tightening.
Author Archives: Menzie Chinn
A Random Thought on the Scientific Method
In response to this post, climate model skeptic Rick Stryker writes (in ALL CAPS no less):
JUST BECAUSE A MODEL DESCRIBES THE EXISTING DATA DOESN’T MEAN THAT IT WILL DESCRIBE DATA THAT HAS NOT BEEN OBSERVED
Economic Implications of Anthropogenic Climate Change and Extreme Weather
In my ten years living in Madison, this has been the coldest Winter thus far. Keeping in mind everything is probabilistic, it’s likely that I have anthropogenic climate change to thank for experiencing this event. [1] [2] [3] (Just like one can’t say Hurricane Sandy was directly a result of global climate change, the likelihood of such events rises with global climate change.)
The American Recovery and Reinvestment Act at 5
It was five years ago that the ARRA was passed…and thence arose a fierce storm of criticisms, ranging from the idea that the stimulus would occur after the recovery was complete (e.g., Ed Lazear), to the Treasury view (government spending would crowd out completely private spending, e.g., Eugene Fama). Time to take stock. The Council of Economic Advisers has released its last report on the ARRA, and other stimulus measures, discussed in a blogpost by CEA Chair Jason Furman.
Estimated Gross State Product for Wisconsin and Minnesota
Ed Hanson argues that 2013 Gross State Product (GSP) data for 2013 will show a Wisconsin renaissance:
Elevating the Minimum Wage, in Wisconsin and the Nation
With update links to CBO and the CEA comment on the minimum wage.
Despite the likely benefits, policymakers in Wisconsin make statements such as the following (from Fox6Now):
“I’m not a big supporter of artificially increasing the minimum wage. I think the marketplace is a much better way to go,” [Wisconsin Assembly Speaker Robin] Vos said.
Guest Contribution: “Unemployment and Unnecessary U-turns in Forward Guidance”
Today we are fortunate to have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99.
Assessing the Widening Wisconsin-US Gap
The cumulative growth gap since January 2011 between the US and Wisconsin coincident indices was 2.2% in December. The forecast indicates a continued widening to 2.8% in six months time.
Observations on the GDP Release and the CBO Outlook
The output gap remains large, even as the external sector supports growth; this outcome is partly due to excessively rapid fiscal consolidation
Eswar Prasad on the “The Dollar Trap”
“[I]n the aftermath of the financial crisis, U.S. policies and a dysfunctional international monetary system have paradoxically strengthened the dollar’s importance.”