Today, we are fortunate to present a guest contribution written by Ashoka Mody, Charles and Marie Visiting Professor in International Economic Policy, Woodrow Wilson School, Princeton University. Previously, he was Deputy Director in the International Monetary Fund’s Research and European Departments. He is the author of “EuroTragedy: A Drama in Nine Acts,” recently updated with a new afterword.
If the last few days of February is like the rest, then recession probabilities are up. Using a plain-vanilla probit model of recession based on the10yr-3mo spread, the following recession probabilities are obtained.
Figure 1 shows both of these at monthly frequency, with February data through 2/21.
Decisions regarding the trilemma, but also choices regarding macroprudential policies have an impact. From the revised version of Joshua Aizenman, Menzie Chinn and Hiro Ito, “Financial Spillovers and Macroprudential Policies” (forthcoming Open Economies Review):
Why was the financial crisis of 2008 so surprising to so many macroeconomists (but from my experience, a little less so for international finance economists familiar with financial crises in emerging markets…)? From the conclusion to George Akerlof’s “What They Were Thinking Then: The Consequences for Macroeconomics during the Past 60 Years” in the latest JEP.
Today, we are pleased to present a guest contribution written by N.R. Ramirez-Rondan and Marco E. Terrones (Universidad del Pacifico).
The Federal Reserve has increased the size of its balance sheet by a third of a trillion dollars over the last 15 weeks, returning to tools that a short while ago we thought it had abandoned. But the Fed’s current goal in these operations is quite different from what we had seen earlier.
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See if you can find when Trump makes his statement about trade negotiations with China. Winning!
Today we are fortunate to have a guest contribution written by Kim Kowalewski, formerly Senior Adviser in the Macroeconomic Analysis Division of the Congressional Budget Office.
That’s the title of my October 18th Global Hot Spots talk, sponsored by the Wisconsin Foundation and Alumni Association (Fluno Center, 1:30-2:30).