The First Year Project is a multi-year, non-partisan effort to (1) Examine the history and structure of presidential First Years, (2) Assess the policy opportunities and threats for our next President, and (3) Influence the national debate by addressing candidates, opinion leaders, and the public.
Category Archives: international
“The Future of the EU and Trans-Atlantic Relations”
That’s the topic of this year’s La Follette Spring Symposium, being held Thursday, April 6th at the University of Wisconsin-Madison (Discovery Building, 330 N. Orchard Street, Madison).
Guest Contribution: “Mnuchin, Multilateral Meetings, Money Manipulation, and Message Mayhem”
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 on March 22nd in Project Syndicate.
How Financially Open Is the World?
Hiro Ito, who updates our de jure financial openness index (sometimes known as the Chinn-Ito index), has recently calculated GDP-weighted averages of the indices for country categories. The stylized facts regarding the evolution of openness changes, particularly with regard to emerging market economies.
National Security and Trade Deficits
National Trade Council Director Peter Navarro writes in the WSJ:
The national-security argument that trade deficits matter begins with this accounting identity: Any deficit in the current account caused by imbalanced trade must be offset by a surplus in the capital account, meaning foreign investment in the U.S.
What If China Gave Mr. Trump What He Says He Wants: A Stronger Chinese Currency
Well, given the trilemma, and limits to capital control efficacy, it’ll mean more PBoC decumulation of US Treasurys, and holding all else constant, higher long term interest rates.
Guest Contribution: “On the Global Financial Market Integration “Swoosh” and the Trilemma”
Today we are pleased to present a guest contribution written by Geert Bekaert (Columbia University) and Arnaud Mehl (ECB). This post is based on the paper by of the same title. The views expressed are those of the authors and do not necessarily reflect those of the ECB or the Eurosystem.
The “Unsustainable” US-Mexico Trade Deficit
From CNNMoney, President Trump:
“With Mexico we have $70 billion in deficit. … It’s unsustainable. … We’re not going to let it happen, can’t let it happen,”
The Trade Deficit Is Nearly 15% of GDP (“Alternatively Defined”)!
If we count only the import side and not the export side of re-exports, as some in the Administration have suggested, we might as well go “whole hog” and redefine the trade balance completely: Let’s count imports, but not exports.
Figure 1: The trade balance defined as net exports/GDP (blue), and the trade balance excluding exports (red). Source: GDP advance release for 2016Q4, and author’s calculations.
Would a Gold Standard Result in Fast Adjustment to Parity?
Judy Shelton argues that “Free trade needs sound money”:
…[T]he time has come to develop a comprehensive approach to international monetary reform compatible with genuine free trade under free-market conditions. If markets are to function properly, money needs to convey accurate price signals; that won’t happen as long as governments can manipulate exchange rates.