Or, “Is current output really 18% below potential output?”
Chinese Foreign Currency External Debt
One constraint on devaluation as a means of stimulating the economy comes from the balance sheet. When there is a big stock of external debt denominated in foreign currency, a devaluation increases the amount of debt evaluated in domestic currency terms, potentially driving some firms into insolvency. How does China look in these terms?
Trade Policy Parallels
Surely, it’s occurred to others, but I find the following comparison of trade policy stances quite remarkable.
The Counter-cyclical Stabilization Policies of the Democratic Presidential Candidates
In this post, I assess how the candidates would implement macroeconomic stabilization policy, given the big reform packages proposed by the candidates, in particular those by Senator Sanders, are highly unlikely to be passed by a fully or partly Republican Congress. On the other hand, a downturn in the next four years is much more plausible; hence, knowing the candidates’ views on macro stabilization policy is arguably more relevant.
Guest Contribution: “Financial Regulatory Transparency and Sovereign Borrowing Costs”
Today we are fortunate to be able to present a guest contribution written by Mark Copelovitch (University of Wisconsin – Madison), Christopher Gandrud (City University of London), and Mark Hallerberg (Hertie School of Governance, Berlin).
Recession probabilities
Our GDP-based recession indicator index is now available from FRED, the database maintained by the Federal Reserve Bank of St. Louis.
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Yield Curve, February 11th
Given worries regarding an imminent slowdown in the wake of the stock market decline, it’s of interest to see what the term premium is signalling.
China Navigates the Trilemma (and Slowing Growth)
Benn Steil and Emma Smith at the Council on Foreign Relations present an interesting picture of Chinese reserves.
Stall Speed in Wisconsin?
The Philadelphia Fed has released leading indicators for December. Essentially zero growth in Wisconsin over the next six months is predicted.
Guest Contribution: “Does China’s Capital Flight respond to US Monetary Policy?”
Today we are fortunate to present a guest contribution written by Yin-Wong Cheung (City University of Hong Kong), Sven Steinkamp (Universität Osnabrück) and Frank Westermann (Universität Osnabrück).