Author Archives: Menzie Chinn

Data Based Assessment of the Unemployment Insurance Impact on UE

From the San Francisco Fed’s Valletta and Kuang (h/t RTE/Derby):

Although economists have shown that extended availability of UI benefits will increase unemployment duration, the effect in the latest downturn appears quite small compared with other determinants of the unemployment rate. Our analyses suggest that extended UI benefits account for about 0.4 percentage point of the nearly 6 percentage point increase in the national unemployment rate over the past few years. It is not surprising that the disincentive effects of UI would loom small in the midst of the most severe labor market downturn since the Great Depression.

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Averting the Consumption Disaster

The CEA has just released the newest quarterly report on the impact of the ARRA. In addition to tabulating the impacts on output and employment, there’s a special section by Chris Carroll (one of the leading authorities on modeling consumption behavior — I used to teach his papers in my PhD macro course), which concludes in the absence of the ARRA “…consumer spending would likely have continued to fall” (which is consistent with my post from a couple days ago).

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IMF WEO: “Transitioning out of Sustained CA Surpluses”

[Corrections made 11am Pacific]

“Getting the Balance Right: Transitioning Out of Sustained Current Account Surpluses” by Abdul Abiad, Daniel Leigh and Marco Terrones:

This chapter examines the experiences of economies
that ended large, sustained current account surpluses
through policy actions such as exchange rate appreciation
or macroeconomic stimulus. It subjects these
historical episodes to statistical analysis and provides a
narrative account of five specific transitions, examining
economic performance and identifying key factors that
explain various growth outcomes.

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The Post-Crisis Global Economy: Prospects for Recovery and Reform

An event at the University of Wisconsin sponsored by the Division of International Studies and the Business School CIBER:

Join a distinguished panel of speakers, including Jeffry Frieden, Stanfield Professor of International Peace, Department of Government, Harvard University, Menzie Chinn, Professor of Economics and Public Affairs, and Michael Knetter, Albert O. Nicholas Dean, Wisconsin School of Business, for a discussion of pressing questions facing the global and U.S. economies in the aftermath of the crisis. Moderated by Mark Copelovitch, Assistant Professor of Political Science & Public Affairs.

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Measuring the Long Run Real Exchange Rate – Income Relationship

Yanping Chong, Oscar Jorda and Alan M. Taylor have tackled the perennial challenge of measuring the long run relationship between the real exchange rate and per capita income levels. From the abstract to The Harrod-Balassa-Samuelson Hypothesis: Real Exchange Rates and their Long-Run Equilibrium:

Frictionless, perfectly competitive traded-goods markets justify thinking of purchasing power parity (PPP) as the main driver of exchange rates in the long-run. But differences in the traded/non-traded sectors of economies tend to be persistent and affect movements in local price levels in ways that upset
the PPP balance (the underpinning of the Harrod-Balassa-Samuelson hypothesis, HBS). This paper uses panel-data techniques on a broad collection of countries to investigate the long-run properties of the PPP/HBS equilibrium using novel local projection methods for cointegrated systems. …

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The Predictive Content of Commodity Futures: Latest Estimates

Econbrowser readers will know that I’ve long been interested in how derivatives like futures predict commodity prices. An early paper on energy futures, coauthored with my former CEA colleagues Michael LeBlanc and Oli Coibion, was summarized in this 2006 post (paper here). Recently, Oli Cobion and I have updated and expanded our examination, to incorporate for the most recent data, account for GARCH effects, alloow for time variation, and to try to explain why there has been time variation in the deviations in the unbiasedness proposition.

 

From the abstract to our paper:

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