The portents from China, on the price front, are ominous. Inflation is rising, as shown in Figure 1:
Author Archives: Menzie Chinn
Heritage Breaks Internet Silence on Its Ryan Plan Simulations (w/o a single number!)
Or, a “Forensic Analysis for the Heritage CDA results”
The Heritage Foundation Center for Data Analysis (CDA) simulation of the Ryan plan, on behalf of the House Committee, has come in for some criticism. Commentary has been provided by Paul Krugman, and perhaps most comprehensively by Macroeconomic Advisers. (My comments are here: [1] [2] [3]). Yesterday, the Heritage Foundation CDA’s director, William Beach, posted a rebuttal to Krugman’s critique. While Big Picture posted an excellent rejoinder,
I want to deal with one particular aspect of Mr. Beach’s open letter. Consider this excerpt.
Dispatches (XIII): Gov. Walker: “It doesn’t save any [money]”
That is Governor Walker’s answer to the question of how much money rescinding collective bargaining for public unions saves the state government. From the Capital Times:
More on the Characteristics of the Heritage Foundation CDA Analysis of the Ryan Plan
Dispatches (XII): Wisconsin Governor Walker Threatens Layoffs (Again!)
From WisPolitics today:
Gov. Scott Walker says he may have to again consider laying off state employees if his collective bargaining law remains tied up in the courts for much more than the next week or two.
From the GOP: Budget Cuts for FY 2011
From the House Appropriations Committee (Republican), courtesy of TPM:
Some Thoughts on Energy Independence
The President’s new initiative on increasing energy independence inspired much commentary on how much it was aspirational, rather than realistic; see for instance this extensive NYT article. In this post, I want to consider whether reduced dependence on imported energy is a worthwhile objective.
Implied Supply Side Elasticities from the Heritage CDA Simulations
Following up on yesterday’s post on the Heritage Foundation’s assessment of the Ryan plan, I thought it would be useful to see how the labor and capital supply elasticities that are implied in the simulations compare with the literature, for the benefit of my macroeconomics class. Unfortunately, I come up with some really odd numbers, so I must either be making a mistake somewhere, or the simulation is very odd. Update 4/10, 4:50pm Pacific: I added two graphs illustrating exactly how odd these numbers are.
Representative Ryan’s Roadmap: Interesting Implied Macro Impacts
I’ve read and re-read the Heritage Foundation’s analysis of how the projections for the Ryan plan were developed. I’m sure it’s my own failing, but I still don’t quite understand what is going on. And this is after Heritage took down their original documentation that indicated unemployment would eventually hit 2.8%.[0]
Gains and Losses from Trade with China
From the conclusion to a provocative paper by David Autor, David Dorn, and Gordon Hanson, entitled The China Syndrome: Local Labor Market Effects of Import Competition in the United States:
our study suggests that the rapid increase in U.S. imports of Chinese goods during the
past two decades has had a substantial impact on employment and household incomes, benefits
program enrollments, and transfer payments in local labor markets exposed to increased import
competition. These effects extend far outside the manufacturing sector, and they imply substantial
changes in worker and household welfare.