A few weeks ago I discussed some new research that suggests that the current negative spread between long-term and short-term yields may be a little less worrisome than earlier studies had led us to conclude, to the extent that the negative spread in part results from an unusually low term premium on U.S. bonds rather than an expectation of future declines in short-term yields. One factor that may be depressing that term premium is foreign holdings of U.S. securities.
Category Archives: international
Will the Dollar Plunge? Would that Be So Bad?
Yesterday’s dollar plunge unnerved markets. What’s the likelihood of a sustained, drastic decline?
Some Puzzling Effects of Productivity on the Real Exchange Rate
What should be the effect of productivity increases on the real exchange rate?
Can Gravity Be Defied?
“Dark Matter”, like all stories about free lunches, still excites lots of people’s imagination, as evidenced by the reaction to my post on the subject a week ago. Here is one picture that should further temper the excitement.
Current Account Imbalances, Again
At the 7th annual IMF Research Conference, Olivier Blanchard discussed in the keynote lecture whether it makes sense to worry about the U.S. current acount deficit.
RIP, Dark Matter As Cure-All
Two recent publications should help put to rest the conjecture that there are vast pools of U.S. wealth lying overseas, ready to save the day.
Estimating U.S.-China Trade Elasticities: Some Very Preliminary Results
Do we have any idea what the CNY appreciation against the dollar will accomplish?
How Strong Is (Was) the Dollar?
An alternative view on the dollar’s strength and trend over time.
Twin deficits redux
On the current account deficit, “We have met the enemy, and he is us”.
It’s not such a small world after all (and it’s getting bigger)
Taking a break from recession talk, I discuss some aspects of the progress of economic integration highlighted in a paper by Bergin and Glick presented at a SCCIE–JIMF conference on Financial and Commercial Integrations.