Source: PredictIt accessed 12/21.
Closing price 34 cents. I assume this means that there is 1/3 chance that President Trump will fire Mueller within the next 6 months. Not surprising given the President’s rabid attacks on the FBI.
Imagine…107% Publicly Held Debt to GDP Ratio
(Some) defenders of the Tax Cuts and Jobs Act as passed argue that tax cuts for households will be extended, rather than disappearing by 2027. What does that mean for debt?
Source: CRFB. Note: Differs from gross debt by netting out intra-Federal government holdings.
CRFB estimates FY2019 deficits will be $1.1 trillion.
Fortunately, the President has stated he will not sign a tax bill that he believes will increase the budget deficit.
Best Schematic Ever: Financial Frictions in Macro/Finance
I tire of hearing people who had one (or no) class in economics saying “the magic of the marketplace” will lead to the optimal outcome. What teaching finance has made me realize is that information problems are rife in many economic interactions. And one can’t be a student of currency crises without being even more convinced. The paper by Stijn Claessens and Ayhan Kose, “Macroeconomic Implications of Financial Frictions: A Survey” is a must-read for those who want to keep up with the literature. It has this fantastic schematic:
Views on Fiscal Stimulus Then and Now
Remember when critics wailed about the high cost/per job saved and low multipliers likely under the American Recovery and Reinvestment Act? The same set of people do not seem very bothered at all by the relatively small implied output impact of the TCJA produced by any of the reasonable modelers.
What Constitutes “an Economist”?
What prompted this question was seeing this release from Senator Portman (as well as this tweet) extolling the Tax Cuts and Jobs Act, appealing to the opinion of “137 economist”. Here’s the list:
Leontiev Lives! In Wisconsin
The MacIver Institute has released new projections of the impact of the Tax Cuts and Jobs Act on Wisconsin:
Continue reading
Brownback’s Regime in Long Term Context
It looks even worse than shown in this post.
Term Papers Due this Friday
Kansas and Missouri GDP Trends since Brownback
Figure 1: Kansas real GDP in mn.Ch.2009$ SAAR (black) and log linear deterministic trend based on 2005-2010 (red), a log difference stationary fit* (green) all on log scale. Source: BEA and author’s calculations.
“Financial Spillovers and Macroprudential Policies”
That’s the title of a new paper by Joshua Aizenman, Hiro Ito and me.