Category Archives: Uncategorized

World Economic Outlook Update: On Trade Policy Risks

From Maury Obstfeld, IMF, Chief Economist, today:

…the risk that current trade tensions escalate further—with adverse effects on confidence, asset prices, and investment—is the greatest near-term threat to global growth. Global current account imbalances are set to widen owing to the United States’ relatively high demand growth, possibly exacerbating frictions. The United States has initiated trade actions affecting a broad group of countries, and faces retaliation or retaliatory threats from China, the European Union, its NAFTA partners, and Japan, among others. Our modeling suggests that if current trade policy threats are realized and business confidence falls as a result, global output could be about 0.5 percent below current projections by 2020. As the focus of global retaliation, the United States finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable.

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Homosocial Reproduction and Economic Policy Formulation in the White House

Word is that Stephen Moore is in the mix for NEC staff. I think he would fit in perfectly in the Trump White House (hence the reference to Rosabeth Moss Kantor’s concept of “homosocial reproduction”). After all, NEC Chair Kudlow just said the budget deficit is shrinking. Now, consider these instances of Mr. Moore’s sheer mendacity (or, I admit, it could be statistical incompetence):

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And in Ohio…Contemplating 25% Tariffs on Soybeans

From Brown, Sheldon,AEDE Agricultural Report 2018-001, May 2018:

Through calculations made based on a representative west central Ohio farm, and assuming an average degree of Chinese substitution between U.S. and Brazilian soybean import, it is estimated that average net income per year (2018-2024) would drop from $63,577 to $26,107 under the proposed tariff, which translates to a 59% decrease in net farm income.

The US tariffs on steel and Chinese retaliation induces this effect through “higher machinery costs, lower corn, soybean and pork prices for U.S. agricultural producers”.

Garbage and Non-Garbage Estimates: Puerto Rico Edition

Since the Puerto Rican government ceased publishing mortality data in February, there has been a debate over the death toll arising from Hurrican Maria. The official death toll, focusing on direct deaths, remains at 64. However, starting in November, a number of scholars attempted to gain further insight into the extent of the human disaster in the Commonwealth. One commentator has labeled another study “garbage”. What is the import of these competing analyses?

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Please, Do Not Comment on This Post Unless You Understand the Following Terms

  • Population mean
  • Sample mean
  • Population standard deviation
  • Sample standard deviation
  • Standard error
  • Administrative data
  • Survey data
  • Point estimate
  • Confidence interval
  • Sampling bias
  • Reporting bias

Now, let’s begin. Here is a graph of estimates of cumulative fatalities in Puerto Rico over time.


Figure 1: Estimates from Santos-Lozada and Jeffrey Howard (Nov. 2017) for September and October (calculated as difference of midpoint estimates), and Nashant Kishore et al. (May 2018) for December 2017 (blue triangles), and Roberto Rivera and Wolfgang Rolke (Feb. 2018) (red square), and calculated excess deaths using average deaths for 2015 and 2016 compared to 2017 and 2018 using administrative data released 6/1 (black square), and Santos-Lozada estimate based on administrative data released 6/1 (large dark blue triangle), end-of-month figures, all on log scale. + indicate upper and lower bounds for 95% confidence intervals. Orange + denotes Steven Kopits 5/31 estimate for range of excess deaths through September 2018. Cumulative figure for Santos-Lozada and Howard October figure author’s calculations based on reported monthly figures. [Figure revised 6/3]
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