And the first three months of 2012 were also the warmest first quarter in the contiguous United States, according to NOAA.
Author Archives: Menzie Chinn
The Recovery According to Ed “We are not in a recession” Lazear
In Tuesday’s WSJ, Edward Lazear argued that we are now experiencing the “Worst Economic Recovery in History”. Before dissecting this remarkable document, it would behoove the reader to recall that while he was Chair of George W. Bush’s Council of Economic Advisers, he stated unequivocally in May 2008 (also in the pages of the WSJ):
Lessons from the Crisis for Teaching Macro
The NY Times “Room for Debate” recently had a forum on “Rethinking How We Teach Economics”, with contributions by Blinder, Taleb and Skidelsky, among others. In my contribution, I focused on the importance of asymmetric information and self-reinforcing feedback loops:
Okun’s Law, the Jobless Recovery, and Unexpectedly Fast Net Job Creation
I have found it somewhat surprising that analysts have worried about how employment growth has recently outpaced GDP, according to Okun’s Law, while others have bemoaned the slow pace of employment growth [0] [1]. Underpinning these discussions is a view that there is instability in the relationship. [2] The first thing to recall is that there are several versions of Okun’s Law. Some are expressed in levels, some in deviations from natural levels (gaps), and some in growth rates. From Figure 1, it does appear that private employment growth has been above expected, after being below expected.
Long Term Real Ex Post Interest Rates around the Great Depression
I was wondering how long real long term (ex post) interest rates remained negative after the onset of the Great Depression. This is obviously interesting given the large amount of slack currently in the global economy, and the rampant fears of crowding out (see [1]) as governments continue to run deficits (and are likely to continue as leaders refuse to raise tax revenues). Fortunately, Lawrence Officer and Sam Williamson have done the profession an enormous service by compiling online historical series on many variables, including interest rates and price, at Measuring Worth. It turns out ex post real rates were really low for a very long time…
International Trade, an Enhanced Petroleum Transportation Network, and Gasoline Prices
Don’t expect a big impact on gasoline prices from opening up an oil pipeline to the coast.
I am a little late to this debate [0] [1] [2], but I wanted to highlight something that is clear from basic international trade theory. Opening up to international trade changes relative prices, and in fact raises some prices. If a pipeline were to be built which could transport oil currently produced in the Midwestern US to the Gulf Coast, then to the extent that oil in the Midwest is lower priced than on the coasts, then average US oil prices may actually rise with completion of the pipeline.
Simon Johnson and James Kwak on Learning — or Not — from the Past
I’ve been reading some history, from Simon Johnson and James Kwak‘s new book, White House Burning. And it strikes me how ahistorical (or just plain ignorant of history) so many of the prescriptions for fixing up the economy are. For instance, the tax cutting ideology of today is merely a recapitulation of what has caused America to come to grief at the Nation’s birth.
Chinn-Ito Financial Openness Index Updated to 2010
The Chinn-Ito KAOPEN index — a measure of de jure financial openness — has just been updated to 2010 (site here). The results show some slight retrenchment in recent years, particularly in LDCs and emerging markets, as shown in Figure 1.
Assume a Can Opener*
Revisiting the Determinants of the Term Premium
In last Thursday’s post, John Kitchen recounted our joint work on what amount of foreign financing would be required to make consistent projections of government debt, and short and long term interest rates. That article from International Finance is now freely available on the Council on Foreign Relations website here.