As the decoupling thesis becomes more and more tenuous [1], and the rest of the world exhibits greater evidence of a slowdown [2], [3], [4], leading to predictions of a more persistent and deeper slump in the US than previously anticipated [5], I wonder — where did that presciption of a one percentage point of GDP fiscal stimulus come from?
Author Archives: Menzie Chinn
More Thoughts on Fiscal Stimulus: Business Incentives
What does the literature say about the efficacy of incentives for investment?
More Things I Learned at ASSA: Inflation and Labor Cost Measures
One of the AEA sessions I attended (at least in part — I missed the first paper) was titled (excitingly) “Reconciliation of Seemingly Inconsistent Data Series”.
The Implications of a Textbook Analysis of Macro Stabilization via Discretionary Fiscal Policy
From Reuters:
If Bush and Congress are to act at all, they will have to move quickly to have any impact, says Alan Auerbach, an economics professor at the University of California, Berkeley, who has done research on the effects of fiscal stimulus.
“Timing is extremely important,” he says. “Recessions typically last less than a year, so unless you can be pretty quick, it’s not worth doing.”
What Are the Prospects for a Two Recession Bush Presidency?
With recession calls becoming more frequent ([1], [2], [3], [4], [5]) it might pay to revisit the indicators that the NBER looks at in determining the turning points in recessions (The fact that NBER put up some new recession-dating-FAQs just a couple days ago might be a leading indicator of sorts).
International Reserves: Messages from the ASSA
I did not get a chance to go to too many sessions at the ASSA meetings in New Orleans (the AEA agenda is here). That being said, I did manage to squeeze in a few on international economics, and the topic of several papers was foreign exchange reserves.
Do We Really Know that a Flexible Exchange Rate Regime Facilitates Current Account Adjustment?
In an post in VoxEU, Shang-Jin Wei alluded to work we have undertaken examining whether de facto exchange rate regimes have an impact on current account reversion.
Financial Globalization and the US Current Account Deficit
Matthew Higgins and Thomas Klitgaard at the Federal Reserve Bank of New York discuss the outlook for financing the deficit, going forward, in a new Current Issues. From the introduction:
The Dollar in the New Year
Is there (an “equlibrium” exchange rate) model for all seasons?
More on China, Currency Misalignment and Data Revisions
In a previous post on China’s currency, I focused on the implications of the ADB’s report on the new ICP analysis of PPP-based GDPs for misalignment estimates for China. Now, it’s time to look a bit more closely at why the data revision occurred.