I’ve been tapped to teach the second course in the statistics/econometrics sequence at the La Follette School. I need examples of excruciatingly bad econometrics to discuss. Please post your suggestions as comments. In 2016, I assigned students to examine the empirical content of “business conditions” indices, like Stephen Moore’s/ALEC Economic Outlook rankings.
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Making America Great Again (in Indebtedness): Net International Investment Position
NIIP is the difference between US holdings of assets abroad, minus foreign holdings of US assets. Shown below is the ratio of NIIP to GDP.
Neel Kashkari at Madison: “Kashkari says he takes comfort from yield curve shape”
Should he? FRB Minneapolis Fed President was at UW Madison today, and stated:
“The fact that the yield curve is now uninverted gives me some indication that we have taken the brakes off the economy,”
“CBO’s Economic Forecasting Record: 2019 Update”
From the Highlights of a new CBO study:
If the Administration Is So Concerned about Corruption…
shouldn’t it be doing something about the Russian Federation as well?
Sick of “Winning”: Trade Deficit Edition
Since January 2017:
Gross vs. Net Investment, Pre- and Post-TCJA
In other words, the sugar high fades. Brad Setser has noted how weak nonresidential fixed investment has been, despite the TCJA. It looks worse when looking at net — rather than gross — investment.
Recession Probabilities, September-October 2020
Plain vanilla 10yr-3mo probit yields 37% probability of recession in October next year. Adjusting the spread by the 10 year term premium estimate (Kim-Wright) implies only a 6.5% probability in September (vs. 46.4% plain vanilla). Augmenting the term spread with the 10 year term premium implies a 42.2% probability for September…
Exactly How Much Does the Mainstream Literature Ignore Demographics?
Reader Steven Kopits writes about the economics profession: