Financial or banking panics were a recurrent theme in 19th-century U.S. economic history.
Category Archives: financial markets
Recession watch
Recent data leave me significantly more bearish than I was a month ago.
The Fundamentals Are…
The equity indices take a dive. Is this in spite of — or because of — the fundamentals?
San Diego County pension fund
I have been developing concerns about the possibility that hedge fund investment flows have become a destabilizing force in world financial markets. Following the maxim “think globally, act locally,” I decided to take a look at how the behavior of our local pension funds may be one small part of that phenomenom. And I have some recommendations to make on behalf of San Diego County residents and the world at large.
The market reads Bernanke’s lips
The Fed Chair speaks, and the market jumps. But why?
Exchange rates, output gaps and inflation rates
Is there any role for the Taylor rule in helping predict exchange rates?
Commodity speculation
Two stories this week give me some concern.
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.
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.
What will the Fed do next?
Probably nothing.