Despite reader Ed Hanson‘s comment:

[T]he current Monthly EPU is at an elevated level, but it has been at this elevated level 7 out of the past 9 years. The elevated value is better described as normal for about the last decade.

And his concluding admonishment:

Perspective, Menzie

I still believe that economic policy uncertainty as measured by the news based index (which Ed Hanson was discussing) is elevated.

Figure 1: Monthly Economic Policy Uncertainty, news based (blue), baseline (red), as reported. Source: http://www.policyuncertainty.com.

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A sequel to my rebuttal to an anti-log manifesto:
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From PredictIt:

From Goldman Sachs, “How Easy Is It to Win a Trade War?” (Stehn/Hatzius) today:

Thanks, Trump!

Source: ino.

That’s HTS code 84799041, on the Section 301 hit list released today. Mr. Trump has the thanks of a grateful Nation for stopping intellectual property theft in this important category.

The entire list is here.

There’s a 30 60 day consultation period. Since around $50 billion of goods is targeted, China will likely impose proportional measures if and when retaliation occurs.

Because the value added of Chinese exports to the United States is fairly low (i.e., exports incorporate lots of foreign components), it is unclear how much damage would be inflicted on bystanders. Wells Fargo uses data on trade in value added to show Taiwan’s exposure.

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Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. This is an extended version of a column that appeared at Project Syndicate on March 19.

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Is the trend more important than if there is actually a surplus or deficit, as one commenter suggests? On a bilateral basis, I don’t think either is particularly important, but as a matter of fact I think we need to verify that the US-Canada bilateral trade balance in goods and services is (barely) positive in 2017, and trending upward on a quarterly basis.

Figure 1: US-Canada trade balance in 000’s US$, s.a. (blue), and 12 quarter trailing moving average (red). NBER defined recession dates shaded gray. Source: BEA, NBER, author’s calculations.

Figure 1: Real GDP growth, actual (bold black), forecast of NY Fed Nowcast 3/16 (green), Atlanta Fed GDPNow 3/16 (red), Goldman-Sachs 3/19 (red), Macroeconomic Advisers 3/16 (blue), Merrill Lynch 3/19 (blue), q/q SAAR. Source: CR, Macro Advisers, Goldman-Sachs.

GDP growth in Q1 has been lower in the past years, few consistent with residual seasonality.