Competitiveness is often appealed to in popular discourse, but seldom defined. In macroeconomics, competitiveness is usually interpreted as cost competitiveness. Chinn and Johnston (JPAM, 1994) discuss the topic at length. Here is the OECD’s measure of cost competitiveness since 1999, along with the Fed’s CPI deflated measure of the dollar against a broad basket of currencies.
Some Statistics and Thoughts Regarding Causality
Consider the incidence of hate crimes directed against Asian-Americans/Pacific-Islanders as reported to the FBI.
CPI: Growth Rate vs. Level
Headline CPI inflation is up. But the level matters.
The American Rescue Plan – GDP Impact Assessed
Goldman Sachs (Phillips/Briggs/Mericle, 3/13) document some aspects of the American Rescue Plan, signed into law by President Biden.
Inflation Expectations, Post-Passage of the American Rescue Plan
At the end of the week, the five year constant maturity Treasury yield continued to rise along with the implied expected inflation rate; but after accounting for the estimated term premium and liquidity premium (h/t Bob), the increase in the latter since the Georgia elections is much more modest.
Wisconsin Employment Trends with Benchmark Revisions
Wisconsin month on month employment (nonfarm payroll) grows at an annualized 4.8% in January, but remains 5.1% below January 2020 levels. NFP employment levels for December are benchmark-revised up by 51.7 thousand, or about 1.8%. Details from DWD.
Recent Developments in Interest Rates and Spreads
The five year constant maturity Treasury yield has risen; but after accounting for the estimated term premium, the increase is much more modest, if not negative. Moreover, expected 5 year inflation has not on net moved much over 2021.
Oil Prices: Futures, Survey Expectations
Despite the recent runup in oil prices, measures of expectations do not spike.
The US Economic Outlook: March WSJ Survey
Forecasted GDP rises yet again, with considerable dispersion.
The Price Level Shortfall
Had we run a 2% price level target since December 2007 (the beginning of the previous recession).