Today, we are pleased to present a guest contribution written by Enrique Martínez-García (Senior Reserach Economist and Policy Advisor, Federal Reserve Bank of Dallas). The views expressed here are those solely of the author and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System. He acknowledges the contributions of Valerie Grossman, Michael Morris, Amro Shohoud, and Mark A. Wynne in preparing these comments.
Don Luskin Speaks: On Trump’s Fed Nominees
Donald Luskin, chief investment officer at Trend Macrolytics, said: “Trump is holding the Fed accountable, and as the man who appoints Fed governors, that is entirely appropriate.” (CNBC)
Why Hasn’t the Incipient Trump-Xi Deal Shown Up in Soybean Futures?
(In honor of reader CoRev), soybean futures for May…
What Would It Take to Implement Cain’s Gold Standard, Interest-Rate-Wise?
Stabilizing the price of gold in US dollars requires adjusting the interest rate (akin to how the exchange rate is managed). Herman Cain’s call for a return to the gold standard would imply that the Fed funds rate would have to be about 15 percentage points higher than it was in January 2000 in order to keep the dollar’s value stable at January 2000 levels — a rate 18 percentage points higher than actually recorded in March 2019.
A Pyrrhic Victory (Perhaps) on China Trade
From Bradsher in NYT:
…spurred by tariffs and trade tensions, global companies are beginning to shift their supply chains away from China, just as some Trump administration officials had wanted.
Does Policy Uncertainty Matter?
The Atlanta Fed along w/Bloom (Stanford) and Davis (Chicago) survey business operators and finds it does!
“A Requiem for “Blame It on Beijing”: Interpreting Rotating Global Current Account Surpluses”
Empirically Assessing “a whole world of hurt”
That’s how an unidentified White House official characterized the impact of closing the southern border.
Two Years of “Winning”: Messages from GDP, International Investment Releases
The release of the final release for GDP, and the international investment position provides an opportunity to assess progress on the trade war. I for one have gotten tired of “winning”.
Measuring unemployment and labor-force participation
The underlying data from which the U.S. unemployment rate and labor-force participation rate are calculated contain numerous inconsistencies– if one of the numbers economists use is correct, another must be wrong. I’ve recently completed a research paper with Hie Joo Ahn that summarizes these inconsistencies and proposes a reconciliation.
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