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,”
Category Archives: international
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.
A New Approach to Tackling Chinese Currency Manipulation That I Do Not Understand
From Bloomberg:
President Donald Trump’s administration is considering a new tactic to discourage China from undervaluing its currency that falls short of a direct confrontation…
“Who Will Pay for the Wall?”
That’s the title of a new post written by me, on Econofact. Short answer to the question posed: not likely just the Mexicans…
WaPo: Federal agents conduct immigration enforcement raids in at least six states
From the article:
Officials said the raids targeted known criminals, but they also netted some immigrants without criminal records, an apparent departure from similar enforcement waves during the Obama administration. Last month, Trump substantially broadened the scope of who the Department of Homeland Security can target to include those with minor offenses or no convictions at all.
Exchange Rate Prediction Redux
That’s the title of a new European Central Bank working paper (coauthored with Yin-Wong Cheung (City U HK), Antonio Garcia Pascual (Barclay’s), and Yi Zhang (U. Wisc.)) just released.
Paying for the Wall/Fence: Tariff Edition
Tax reform (DBCFT) will not pay for the wall. A remittances tax will not yield sufficient revenues, except perhaps over many years. What about a tariff?
MacParity Defined Undervaluations: 3.7%, 8.5%, 50.2%
Those are estimated amounts of currency undervaluation, using the Big Mac index and the Penn Effect as of July 2016. Guess which currency is 3.7%, and which currency is 50.2%.
Paying for the Wall/Fence: Capital Controls Edition
Can we fund the partly see-through wall by taxing worker remittances?