“… the quick fix, of the “countervailing tariff,” “voluntary” restraints, and the like, will only mean higher prices for consumers in the short run, and greater distress in the long term. “Reciprocity” … notwithstanding, protectionism will only prove a temporary, and costly, palliative for inefficient industries, in a world populated by NICs, MICs and [Advanced Developing Countries].”
State GDP Relative to 2019Q4
Here’s the cumulative GDP decline relative to 2019Q4, nationwide:
Wisconsin GDP in Q3
Recovery in Wisconsin has brought real GDP back to within 4% of peak levels.
Guest Contribution: “The US consumer benefits from Chinese imports”
Today, we are pleased to present a guest post written by Liang Bai (University of Edinburgh) and Sebastian Stumpner (Banque de France). The views presented represent those of the authors, and not necessarily those of the institutions the authors are affiliated with.
“In Memory of Richard Cooper”
By Jeffrey Frankel, December 24, 2020.
Business Cycle Indicators as of December 23
Key indicators tracked by NBER Business Cycle Dating Committee (BCDC) show mixed behavior; income (ex-transfers) declines. So too does consumption.
Quick Primer on Stock Market vs. GDP
The stock market booms while GDP staggers along. Why?
Wisconsin Employment Decline Continues
DWD data indicates nonfarm payroll employment declines in November, as does private nonfarm employment. Government employment also declines, while manufacturing versus accommodation/food services experience diverging fortunes.
Treasury’s FX Report – Currency Manipulation versus Currency Misalignment
The Treasury’s semi-annual report designated Switzerland and Vietnam as currency manipulators. Without taking a definitive stand on currency manipulation, I do want to highlight where Vietnam (and Switzerland) stand if evaluated by the Big Mac Parity/Penn Effect:
Figure 1: Log Big Mac dollar price in July 2020 plotted against log 2020 per capita income in 2017 I$. Penn Effect line estimated using regression (red) and 60% prediction interval (gray). Source: Economist, IMF World Economic Outlook October 2020 database, author’s calculations.
