Perhaps the most startling thing about the new COFER data on reserves released by the IMF is not the declining dollar share in total reserves, but rather the fact that reserves have risen relative to where we thought they were [0]. The change is entirely due to the upward revision in unallocated reserves by emerging market and LDC central banks. This point is shown in Figure 1.
Author Archives: Menzie Chinn
Guest Contribution: Monetary Policy and Asset Bubbles in 2010
By Joseph E. Gagnon
Today, we’re fortunate to have Joe Gagnon, senior fellow at the Peterson Institute for International Economics, as a guest contributor.
In his speech at the American Economic Association yesterday, Ben Bernanke said that monetary policy played at most a small role in the U.S. housing bubble and that financial regulatory policy is the appropriate tool for preventing harmful asset price bubbles in the future. I agree with these conclusions, but I suspect that many do not, even within the world of central banking.
Some International Finance at ASSA
I’m not at the ASSA meetings in Atlanta this year, but my coauthor Hiro Ito is presenting our papers (with Joshua Aizenman) in two very interesting sessions on international finance.
Counterfactuals and the Stimulus, Again
And some lessons from the 1930’s for the 2000’s
John Taylor returns to the topic of how much impact the stimulus package has had on output. The heart of the argument is summarized by his extension of a graph presented in the NYT (and reproduced in this post).
How Important Is Structural Unemployment in the Current Recession/Recovery?
Joseph Lawler at the Spectator distills the Austrian perspective on the sources of current unemployment.
The Prospects for Global Imbalances: A View from the IMF
Following up on recent posts ([1], [2], [3], [4], [5] [6]) Here’s another take on the prospects for resolving global imbalances, from Olivier Blanchard and Gian Maria Milesi Ferretti, “Global Imbalances: In Midstream?” Staff Position Note 09/29 (Dec. 22, 2009):
IV.B. Lower Global Imbalances in the Future
What will happen in the future depends on how long the factors we just listed will be in play [oil price decline, asset price busts, increase in home bias, the hit to durable consumption and investment goods demand].
Below is reproduced the IMF World Economic Outlook‘s October 2009 forecast for current account balances.
Levels versus Growth Rates and the Impact of ARRA
Since there is often confusion in popular discussions of the net effect of the stimulus on GDP, I thought it would be useful to present Deutsche Bank’s views on the impact on both the level and growth rates of GDP. (Here we are talking about seasonally adjusted at annual rates [SAAR] growth rates and levels; cautionary notes here: [1], [2].)
A Crisis Reading List
Teaching Macro, after the Great Recession
Or, How to adapt the intermediate macro syllabus to an altered world
This semester is the first time I’ve taught intermediate macroeconomics link in over two years. The last time I taught this course in the Spring of 2007, the key topics were inflation, the possibility of stagflation, and the possibility of containing the ongoing housing slowdown.
How High Do Income Elasticities Have to Be to Explain the Recent Import Drop-off?
There’s been a debate over the cause of the trade flow drop-off, with varying explanations being offered. Broadly speaking, the explanations are (1) trade credit and credit crunch more broadly, (2) enhanced vertical specialization implying higher income elasticities, and (3) compositional effects (the trade dependent sectors were those most highly affected in the latest recession). Without necessarily offering definitive evidence one way or the other, I wanted to quantify the extent to which income elasticities had to be higher in order to rationalize the movements observed in US data.