The Treasury Department reported a steady rate of purchases of Treasuries by foreigners (see the Bloomberg account here). Let’s hope that continues — although we should be cognizant of the ramifications: increasing debt and interest payments to foreigners.
Author Archives: Menzie Chinn
Escalation and Accidental Military Keynesianism
Under plausible assumptions, Fiscal Year ’07 expenditures for operations in Iraq will come close to 1 percentage point of GDP. What will be the impact on the U.S. economy?
Discussing the Economy on Minnesota Public Radio
I talked about trade and the economy with AEI’s James Glassman on Minnesota Public Radio’s Midmorning show a week ago. The link to the audio file is here
The Return of Knowledge-Based Policy-Making?
NOAA admits a human role in global warming. OMB drops — based on a critical National Academies of Sciences report –plans to implement a flawed risk-assessment procedure. Are these harbingers of change?
The Wartime Economy and Tax Policy
So Shinseki was right.
International Economics at the AEA/ASSA: Selected Items
The Allied Social Sciences Association (incorporating the AEA, the Econometric Society, the International Economics and Finance Society and many other groups) meetings took place in Chicago this last weekend. I wasn’t able to go to that many sessions, but I did attend a few related to international issues.
President Bush on Economics
On Wednesday, the President writes in a Wall Street Journal op-ed (sub. req.):
Low Real Rates Disappear…but the Deficit Remains
I’ve been looking at real long term interest rates as proxied by nominal rates minus expected inflation. The problem of course is finding measures of expected inflation. Subtracting off the ex post rate (appropriate under the rational expectations hypothesis) can lead to misleading inferences — and is not practicable for current measures of long term rates. Using ten year constant maturity rates and the Society of Professional Forecasters 10 year horizon CPI inflation rates yields the following picture.
Is Decoupling Possible?
The dream rebalancing scenario, in which adjustment of the world’s imbalances occurs without fiscal responsibility returning to America, relies upon “decoupling”.
Janet Yellen on Inequality in America
A survey of trends in income inequality, and some thoughts on what policy responses might be appropriate.