Roll Call notes Trump Nominates Anti-Deficit Crusader Mulvaney to Head OMB.
A Big MacParity Guide to Undervalued Currencies
China is not high on the list for “day one sanctions” if one were to look at this fast-food data.
Figure 1: Log relative dollar price of Big Mac against dollar price of US Big Mac (July 2016) versus log relative per capita income in PPP terms (2016 estimates); regression fit from quadratic specification (black dots), and 90% prediction interval (gray dots). Source: Economist, World Bank World Development Indicators, and author’s calculations. Data [XLSX]
Using the methodology outlined in this post, it’s clear that by the price criterion, Russia’s currency is much more undervalued (at 50% in log terms) than China’s.
Kansas Employment Decline Continues
Missouri employment rises.
“The Future’s So Bright, I Gotta Wear Shades”
That’s what Governor Walker said today about Wisconsin’s economy, quoting from a 1980’s song. This was apparently spurred by DWD’s release “Wisconsin Employment Reaches All-Time High in November”. This statement is true, when referring to the relatively imprecisely measured household survey figures [1]. It is not true when referring the (more precisely measured) establishment series.
Economic Report of the President, 2017
When Tax Cuts Meet Mass Deportations
As we get more clarity on the nature of fiscal and mass deportation policies under a Trump Administration, it seems useful to consider what happens to the output gap.
Prices of Imports from China Are Falling
As are all import prices.
Figure 1: Log import prices of non-petroleum goods (blue), and of goods imports from China (red), all normalized to 2014M06=0. Source: BLS via FRED, author’s calculations.
US Financial Conditions and Emerging Market Stress: The Outlook
From NYT:
…around the globe, the surge in the dollar is provoking financial jitters.
Emerging market countries and corporations that have been binging on cheap dollar debt for more than a decade now face a spike in servicing costs and elevated debt burdens.
Wisconsin GDP Trending Sideways
Quarterly state GDP figures for the second quarter were released yesterday. Estimated Wisconsin GDP is flat relative to 2015Q4; 2016Q1 GDP was revised down by 1.7%.
Raise the Yuan! Implications for the Treasury Spread
Some back-of-the-envelope calculations: If we get what President Elect Trump says he wants — no depreciation of the yuan — what happens to the Treasury 10 year-3 month spread?