Or not.
Figure 1: Manufacturing employment in US (blue), and Wisconsin (red), in logs normalized to 0 in September 2018. Light orange shading denotes Walker administration. Source: BLS, DWD, author’s calculations.
The Wisconsin Manufacturing and Agriculture Credit was fully phased in as of January 2016.
Today we are fortunate to have a guest contribution written by Kim Kowalewski, formerly Senior Adviser in the Macroeconomic Analysis Division of the Congressional Budget Office.
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:
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.
With industrial production continuing its dive in October, we have a mixed picture of economic activity.
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:
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.
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 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:
Consider the rest-of-the-world… Who’s going to pick up the slack this time?