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.
Author Archives: Menzie Chinn
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.
Surge or no surge? minimal “burn rates” for operations in Iraq
Where are expenditure rates now? Where might they go?
The RMB: Where’s it been and where’s it going?
Faster appreciation against the dollar. And apparently against a broad basket of currencies.
Econoblog on “Dollars, Debt and the Trade Gap”
Thoughts on the Dropping Dollar
Bernanke in China
Distortion versus effective subsidy.
The October Trade Release
The non-oil trade balance stabilizes. Petroleum-related imports exceed the US-China trade deficit.
The Economic Debate over Minimum Wage Effects
A little bit of knowledge is a dangerous thing. How does extending the debate beyond Econ 101 levels of analysis change the nature of the debate?
Compensation Catch-up Postponed
The Administration has been lauding the acceleration in compensation growth. Newly revised figures indicate that the rejoicing was premature, as Q2 real compensation growth was revised downward.