Some people think that foreign direct investment into the United States has surged as confidence in the American economy has risen under Mr. Trump’s administration. The data do not support such a supposition. From BEA:
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.
Business Cycle Indicators, Mid-November
With industrial production continuing its dive in October, we have a mixed picture of economic activity.
More on What Trump Could Have Meant
As I noted in yesterday’s post, in Mr. Trump’s speech at the Economic Club of New York Tuesday, he made a mysterious claim:
What Could Trump Have Possibly Meant?
From Mr. Trump’s speech at the Economic Club of New York yesterday:
…we’ve added nearly $10 trillion of new value to our economy. That’s in a short period of time. Remember, I only use numbers from the time of the election because I can’t go to January 20th. It’s not fair. We picked up tremendous stock market and economic numbers. They actually went wild the day after I won.
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,”
The Trumpian World as Natural Experiment
The Trump economic policy regime (if it can be called that) has provided several “natural experiments”. Do corporate tax rate reductions “pay for themselves”? Does expansionary fiscal policy at full employment lead to large increases in output? Does increasing trade protection necessarily lead to an increase in the trade balance? Does a bellicose and confused trade negotiating stance accelerate fixed investment? I think the answers are No, No, No, and No. On this last point, see Altig et al. on Macroblog:
Why Is the 2019 Slowdown Different than the 2016 Slowdown?
Consider the rest-of-the-world… Who’s going to pick up the slack this time?
“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?