Some pictures to envision the impact of covid-19: (1) lots of US int’l trade goes by air, (2) and US sensitivity to disruption to air freight from China, by sector.
Guest Contribution: “Questioning the puzzle: Fiscal policy, exchange rate and inflation”
Today we are fortunate to present a guest contribution written by By Laurent Ferrara (SKEMA Business School, Paris, and Director of International Institute of Forecasters), Luca Metelli (Banca d’Italia), Filippo Natoli (Banca d’Italia) and Daniele Siena (Banque de France). The views presented represent those of the authors, and not necessarily those of the institutions the authors are affilliated with.
How Plausible Is the Administration’s GDP Forecast?
As has been noted, the Administration’s forecast is about a percentage point higher than CBO’s. This seems like a large economic difference; as I’m teaching econometrics this semester, how does this seem in terms of statistical significance. Figure 1 below summarizes.
Malleable and Ductile
Those are two characteristics of gold … and of Judy Shelton’s economics. From Deutsche Bank today (Luzzetti & Hooper):
Iron and Steel Primary Production Employment
Down, down, down.
Why I Still Think June 2019 Employment Is Lower than Reported
The data from the Quarterly Census of Employment and Wages (QCEW) suggests to me that employment in June 2019 (last available QCEW data) is 505 thousand lower than estimated (although possibly as little as 111 thousand, as large as 899 thousand, using a 95% prediction interval).
Wisconsin in the Trade War of 2018-
I’m interviewed on Wisconsin Public Radio today, in the wake of declining Wisconsin exports.
The Employment Benchmark Revision: Implications for the Economy’s Trajectory
The January numbers are out. March 2019 levels revised down 514 thousands, vs. 501 in preliminary. December numbers revised down 422 thousands. My guess based on December estimates and the March 2019 preliminary benchmark (see this post), the actual reported numbers for December were higher by 79 thousand.
Productivity, Product Wage, and Real Wage
Productivity and costs for 2019Q4 were released yesterday.
What Method Implies 80% Probability of Recession by Nov 2020?
It’s the method described in this intriguing paper, by William Kinlaw, Mark Kritzman, and David Turkington. From the abstract:
The authors introduce a new index of the business cycle that uses the Mahalanobis distance to measure the statistical similarity of current economic conditions to past episodes of recession and robust growth. Their index has several important features that distinguish it from the Conference Board’s leading, coincident, and lagging indicators. It is efficient because as a single index it conveys reliable information about the path of the business cycle. Their index gives an independent assessment of the state of the economy because it is constructed from variables that are different than those used by the NBER to identify recessions. It is strictly data driven; hence, it is unaffected by human bias or persuasion. It gives an objective assessment of the business cycle because it is expressed in units of statistical likelihood. And it explicitly accounts for the interaction, along with the level, of the economic variables from which it is constructed.