Category Archives: Uncategorized

PoMo Micro

A reader writes (in discussing the Taylor rule):

Like [the] price elasticity of demand, we have an analytical approach that is appealing in theory, but so ill defined as to be useless in practice.

Wow. I haven’t read anything like that since I read Anti-Samuelson. Believe it or not, this was written by a person who purports to do policy analysis.

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”.