I’m teaching unconventional monetary policy in Financial Systems course. Here’s some interesting graphs (not altogether new), relating to forward guidance effectiveness.
Two Pictures from the Financial Markets
Usually, the Friday after Thanksgiving holiday is a quiet trading day. Today, there was lots of news to react to.
One Year Inflation Expectations
Expectations and forecasts from economists continue to diverge from consumer based expectations.
October Inflation Recap
With PCE inflation figures in, we have the key price indices for October. Core PCE inflation was at market expectations (Bloomberg). Nowcasts for November inflation is down markedly.
Monthly Business Cycle Indicators: The Rebound Continues
With the earlier rebound in industrial production, slightly accelerated growth in consumption, key indicators followed by the NBER BCDC look a little better than even a week ago.
GDP, GDI, and Forecasts/Nowcasts
GDP growth in Q3 was revised up 0.1% (SAAR). Real GDI was released; taking average of GDP and GDI reveals the possibility that actual growth was faster than indicated by GDP alone. And while forecasted levels have been downwardly revised over the past months, the most recent nowcasts suggest acceleration.
Now That’s Hyperinflation
Over the next week, you’re going to hear a lot about how high prices are, how much more a turkey dinner cost than a year ago. But when you hear somebody, say the word “hyperinflation”, remember this picture:
An Effective Anti-Inflationary Measure
As noted by Jeff Frankel:
In terms of what the president can actually control to reduce inflation, one neglected tool is trade policy. Former President Donald Trump put these tariffs on aluminum and steel, and everything we import from China — all kinds of goods. The tariffs raise prices to consumers. It seems to me a no-brainer to undo those barriers. Biden should be able to get China and other countries to reciprocally lower some barriers against us. But with or without that, removing tariffs could bring down consumer prices and prices to businesses for steel and aluminum and all kinds of inputs immediately. That’s the one thing that the government could most rapidly control.
“Do Central Banks Rebalance Their Currency Shares?”
Some do; some don’t. Now published, an article in Journal of International Money and Finance (updated) by me, Hiro Ito, and Robert McCauley answering this question. From the abstract:
Wisconsin Labor Force & Employment after Enhanced Benefits Termination
As of September 4th, enhanced unemployment benefits were ended in Wisconsin. What do the latest data reveal?