Last Thursday, I had the opportunity to participate in a panel on Global Economic Crisis: The Untold Stories, sponsored by the Center for World Affairs and the Global Economy (WAGE). I was tasked with surveying the impact on the economy outside the borders of the United States — in 20 minutes.
Category Archives: international
Triple “Ut-Oh”: September Trade Release and the End of the Consumer of Last Resort
Brad Setser says “Ut-Oh”, beating me to the punch on the September trade release, which showed US exports plunging. It’s a post that Paul Krugman rightly expresses some angst upon reading. And now I’m going to add two more reasons to worry (not that I think Setser and Krugman aren’t aware of these points).
Chinese Trade: An Update
I was surprised by this item from the BBC:
Chinese trade surplus at new high
Wednesday, 10 September 2008
China’s trade surplus hit a monthly record of $28.7bn (£16.28bn) in August as the gap with the US and Europe widened, despite weaker world demand.
Trade Deficit Reduction via Changes in Exports, Imports or Prices
Today’s July trade release was a little bit of a surprise, due to oil [0]; Haver covers the numbers. Calculated Risk discussed the release, and actually took the outcome as a fairly positive, albeit with some anxiety about whether exports will keep up the robust growth necessary to continue shrinking the deficit.
I want to focus on a couple of other aspects of the release which seem to make me worry a bit more.
Taylor Rules, Synchronized Recession and the Potential for Competitive Depreciation
In yesterday’s FT, “All in this together” assessed the possibility of a roughly synchronized downturn in the world’s major economies, with the United States, ironically enough, suffering the smallest hit. This brings up all sorts of interesting questions regarding exchange rates, if one believes that Taylor rules define monetary policy making to some degree, and that interest differentials affect exchange rates.
The Dollar and the Trade Deficit: How Does Productivity Fit In?
Why is the trade deficit, even taking out oil, so large when the dollar is so weak? Maybe some insights can be gleaned from productivity measures.
The International Outlook: The View from Dallas
Enrique Martinez-Garcia and Janet Koech at the Dallas Fed present their perspective on the international macro outlook. The first is particularly interesting to me.
Current Account Adjustment Redux? What’s Different this Time Around
Taylor rules, exchange rates, and the speculation about the dollar/euro rate
As Europe teeters on the edge of recession [0], and the United States remains mired in slow growth, expectations of what interest rates, and hence exchange rates, are shifting. Here’s a familiar depiction of where policy rates in the US and the euro area have been, and where they are predicted to go.
Implications of adjustment to riskier dollar assets in a portfolio balance framework, illustrated in three steps
Consider a hypothetical world economy with assets denominated in dollars and euros.