Statement yesterday, as reported by Washington Examiner:
“[That country] really needs to make up its mind” … “Do they want to be in the community of nations, do they want to be part of the WTO and just behave like everybody else, or don’t they?”
…“And if they don’t, then we, the community of nations, are going to have to think about what are we going to do about that?”… “Are we going to let them stay in the WTO?”
Today, we are fortunate to be able to present a guest contribution written by Steven J. Davis, William H. Abbot Distinguished Service Professor of International Business and Economics at the University of Chicago Booth School of Business and Senior Fellow at the Hoover Institution.
Donald Trump has upended U.S. trade policy. The particulars include a U.S. pullout from the Trans-Pacific Partnership (TPP), threats to jettison the North American Free Trade Agreement, a refusal to affirm new WTO judges, tariff hikes on steel and other goods, frequent rhetorical attacks on major trading partners, and a wrong-headed obsession with bilateral trade deficits.
Using Census and BEA data, one can assess at least in first order terms, what states will be impacted by tariffs against US exports — as well as the CNY depreciation that has occurred in the last few months.
Is he Willoughby or is he Hillenkoetter, or neither?
NEC Chair Kudlow in response to the Chinese threat to impose tariffs on an additional $60 billion worth of goods (from Bloomberg).
“Their economy’s weak, their currency is weak, people are leaving the country. Don’t underestimate President Trump’s determination to follow through.”
Just in case you were still wondering.
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Nearly a year ago, I asked Are Global Imbalances a Source of Concern?. At a minimum, we know they’re back. And the IMF certainly thinks so.
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate.
That’s a new article at the outstanding web portal VoxEU, coauthored by Matthieu Bussière, Menzie Chinn, Laurent Ferrara, and Jonas Heipertz, and based on this paper:
The ‘Fama puzzle’ is the finding that ex post depreciation and interest differentials are negatively correlated, contrary to what theory suggests. This column re-examines the puzzle for eight advanced country exchange rates against the US dollar, over the period up to February 2016. The rejection of the joint hypothesis of uncovered interest parity and rational expectations still occurs, but with much less frequency. In contrast to earlier findings, the Fama regression coefficient is positive and large in the period after the Global Crisis, but survey-based measures of exchange rate expectations reveal greater evidence in favour of uncovered interest parity.
