That’s the amount of time between 10 year-3 month yield curve inversions and the beginning of the subsequent NBER-dated recession (these are the three recessions in the Great Moderation period). This is shown in Figure 1.
Up, Up and Away
Economic Policy Uncertainty, 5 December 2018:
Scott Walker’s Parting Gift to Wisconsin
A shrinking economy.
Measuring monetary policy shocks
What are the effects on the economy when the Fed raises interest rates? This is a key question in empirical research, but is notoriously hard to answer. The reason is that when the Fed raises interest rates, it usually does so in anticipation of a stronger economy or rising inflation. If we look at what happens to inflation or output following an interest rate hike, it is impossible to distinguish the effect of the Fed’s actions from the effects of the changing fundamentals that led the Fed to act in the first place. New research by a graduate student at UCSD may have finally solved this problem.
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Wisconsin in Washington (the College Fed Challenge)
The University of Wisconsin’s Department of Economics was represented at the Federal Reserve System’s national Fed Challenge competition, this last Thursday. Wisconsin participated, after prevailing in the Chicago region’s competition.
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US Gets China to Agree to What It Was Going to Do Anyway
From NYT:
In a significant concession, Mr. Trump will postpone a plan to raise tariffs on $200 billion worth of Chinese goods to 25 percent, from 10 percent, on Jan. 1. The Chinese agreed to an unspecified increase in their purchases of American industrial, energy and agricultural products, which Beijing hit with retaliatory tariffs after Mr. Trump targeted everything from steel to consumer electronics.
Guest Contribution: “What are the drivers of TFP growth? An empirical assessment “
Today, we are pleased to present a guest contribution written by Iván Kataryniuk (Banco de España) and Jaime Martínez-Martín (European Central Bank) summarizing their chapter in the book International Macroeconomics in the wake of the Global Financial Crisis edited by L. Ferrara, I. Hernando and D. Marconi. The views expressed here are those solely of the author and do not reflect those of their respective institutions.
USDA Speaks
From Quarterly Agricultural Export Forecast, released yesterday.
Fiscal year (October/September) 2019 agricultural exports are projected at $141.5 billion, down $1.9 billion from fiscal year 2018 and $3.0 billion from the August 2018 forecast, largely due to decreases in soybeans and cotton. Soybean export volumes are down because of declining Chinese purchases from the United States as a result of trade tensions, and as a record U.S. crop continues to pressure soybean prices lower.
“Failed tax-cut experiment in Kansas should guide national leaders”
That’s the title of an oped by Heather Boushey in The Hill. There’s not much to disagree with in the article, but I think one graph of Kansas employment would’ve really driven home the conclusion.
Guest Contribution: “Trade War is Not a Reason to Ease Money”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared in Project Syndicate on November 26th.