Sovereign default experiences are a staple in international finance. Here are a couple bits of information from a vast literature.
Author Archives: Menzie Chinn
How Innocuous Is a Treasury Default?
Steven Englander, Global Head of G-10 FX strategy for Citi is not very sanguine about a Treasury default, especially as it pertains to foreign holders of Treasurys. From an email today (not online):
Unemployment and Output Gaps in a New Keynesian DSGE
The output gap is big and negative; the unemployment gap is big and positive. From “Unemployment in an Estimated New Keynesian Model” (ungated version), by Jordi Galí, Frank Smets, and Rafael Wouters:
Economic Underpinnings of “The House Republican Plan for America’s Job Creators”
Such as they are
In reading this short document (a word count was 2069, essentially a 8 page paper, shorter than the term papers I assign), I was pervaded by a sense of déjà vu. There are many interesting assertions (not a single footnote in the entire document). Rejoinders to some assertions are here. I’ll focus on some key guffaw-inducing assertions, relying largely upon previous Econbrowser posts.
Forecasts: What and How Do Business Economists Think?
The WSJ and Philadelphia Fed surveys of economists were released last week. It’s of interest to consider what they imply for the macro outlook, and additionally, how they believe inflation will evolve as a function of other variables.
Are We on the Brink of High Inflation?
F for Fail
The Joint Economic Committee (JEC) Republican analysis of the impact of monetary policy on gasoline prices
I’ve been grading papers for the past half week, so when this popped into my mailbox yesterday morning, I was in a “grading” mood. And when I finished reading it, I determined I would give it an F. From “The Price of Oil and the Value of the Dollar: Declining Value of the U.S. Dollar Adds to the Price of Oil and Gasoline,” Republican Staff Commentary (May 16, 2011):
What Would Really Bring about a Dollar Dive?
One of the things about reading the op-eds and various articles in the blogosphere is the tendency to hype the possibility of the collapse in this, or the collapse in that. The most recent “bubble” in this type of writing involved hyper-inflation, commodities (silver, anyone?) and the dollar. Now I read things like QEIII would bring about a collapse in the dollar [1] (as if anybody really thought QEIII was politically likely, even if it were advisable on economic grounds); or easy monetary policy would be the culprit. Here’s a choice quote from Jim Rogers:
China’s Currency and Trade Balance: Two Pictures
The US-China Strategic and Economic Dialog is underway. [0] The topics span many issues. One of the perennials is the yuan’s real value and the Chinese trade balance. Here are two figures.
Learning about Long Term Unemployment (II)
Politics and Policy
Last Monday, I discussed some of the findings from the conference on causes and consequences of, and policy responses to, long term unemployment, which brought to UW Madison Prakash Loungani, an Advisor in IMF’s Research Department, Kenneth Scheve, Professor of Political Science at Yale, Phillip Swagel, Professor of Public Policy at the University of Maryland, and a former Assistant Secretary of Treasury for Economic Policy, Rob Valletta, Research Advisor at the Federal Reserve Bank of San Francisco, and Kenneth Troske, Professor of Economics from the University of Kentucky. In today’s post, I will discuss the presentations and papers by Ken Scheve and Phillip Swagel and Ken Troske.