Or at least OECD plus China *, on the basis of the OECD’s Composite Leading Indicators for August 2011:
Author Archives: Menzie Chinn
On China: Global Impact, Domestic Costs, Hard Landing, and the RMB As an International Currency
A new book on China (and Asia) in the global economy, the costs of the Chinese currency regime, the prospects for a Chinese hard landing, and can China save the day if the US and euro area go into recession. Plus, the prospects for the RMB as a key international currency.
A new book — Asia and China in the World Economy, edited by Yin-Wong Cheung (UCSC and HK City U) and Guonan Ma (BIS).
IMF Book Forum: Lost Decades
A Book Forum on our book, Lost Decades will take place on October 14th, in Washington, DC.
Yuan Appreciation: Do Chinese Trade Flows Behave Differently? (I)
China is in the news; or more accurately, the Chinese currency, is. From Reuters:
A sharp rise in China’s yuan currency might cut the U.S. trade deficit by as much as one third and create enough American jobs to put at least a modest dent in the unemployment rate.
Then again, it may also lead to a destabilizing spike in Chinese unemployment and spark a trade war that drags the global economy back into a deep recession.
Gov. Perry on Anthropogenic Climate Change
From Reuters, three days ago:
“I still stand by that the science is not settled on man-made global warming,” Perry said while campaigning in the key early primary state of New Hampshire.
By the way of contrast, from the Preface to National Academy of Sciences, Advancing the Science of Climate Change (2010):
…there is a strong, credible body of evidence, based on multiple lines of research, documenting that climate is changing and that these changes are in large part caused by human activities. …
De-Mythologizing Fiscal Consolidation
In Lost Decades, Jeffry Frieden and I argue that fiscal consolidation is a necessary prerequisite for long term recovery; however, fiscal consolidation too soon can derail the recovery, and plunge us further into debt. In contrast, some commentators have asserted that fiscal consolidation can be accomplished painlessly, or even with immediate benefits (e.g., JEC-Republicans, Rep. Paul Ryan/Heritage Foundation). Recent empirical work which carefully identifies the relevant episodes concludes that such instances of expansionary fiscal contraction are rare, and usually conducted near full employment. Ball, Leigh and Loungani review the effects of fiscal contraction in “Painful Medicine”.
“International Policy Implications and Lessons From the Global Financial Crisis”
Last Friday and Saturday, the JIMF 4th Annual Conference at UC Santa Cruz took place, organized by Joshua Aizenman (UCSC & NBER), Robert Dekle (USC) & James Lothian (Fordham University & JIMF) and sponsored by JIMF, SCCIE-UCSC, and the FRBs of Atlanta and San Francisco. I didn’t get a chance to go, which was unfortunate as the papers were relevant to thinking about how the international financial system is linked to the events of 2008.
Lost Decades: The Lost Graphs
In our book Lost Decades, Jeffry Frieden and I tried to be as comprehensive as possible in documenting the history we described, the analytical results we reported, and the data we used. We had intended to rely to a greater degree on graphical depictions, but for a variety of reasons, not all the proposed graphs made it in. Hence, we present the graphs that didn’t make it into Lost Decades. (And, by virtue of the just-in-time nature of the web, updated!). The graphs are organized by chapters:
The Trillion Dollar War of Choice, and the Constraints on Macro Policy
Or at least $805.6 billion as of the end of September, not including debt service and additional reset costs; around $940 billion including interest payments.
As the US economy faces the prospects of stagnant growth or recession, it is of interest to see why the scope for fiscal policy is so circumscribed — that is why is the debt level so high given that in the last year of the Clinton Administration, we were paying down debt? Figure 1 depicts part of the answer (other parts, here).
“What Predicts a Credit Boom Bust?”
From Chapter 1 of the IMF’s recent World Economic Outlook (Box 1.2), a set of findings by Jörg Decressin and Marco Terrones:
The econometric results confirm that net capital inflows, financial sector reform, and total factor productivity are good predictors of a credit boom. Net capital inflows appear to have an important predictive edge over the other two factors.