Not an economics post, but I cannot resist.
What If China Gave Mr. Trump What He Says He Wants: A Stronger Chinese Currency
Well, given the trilemma, and limits to capital control efficacy, it’ll mean more PBoC decumulation of US Treasurys, and holding all else constant, higher long term interest rates.
Guest Contribution: “Identifying State-Level Recessions”
Today we are pleased to present a guest contribution written by Jason Brown, Senior Economist and Regional Executive at the Federal Reserve Bank of Kansas City. This post is based on the article by the same title. The views expressed are those of the author and do not necessarily reflect the positions of the Federal Reserve Bank of Kansas City or the Federal Reserve System.
Guest Contribution: “On the Global Financial Market Integration “Swoosh” and the Trilemma”
Today we are pleased to present a guest contribution written by Geert Bekaert (Columbia University) and Arnaud Mehl (ECB). This post is based on the paper by of the same title. The views expressed are those of the authors and do not necessarily reflect those of the ECB or the Eurosystem.
The Media Fails to Report the Sun Rose Today
President Trump is upset that the media missed this economic event:
“The media has not reported that the National Debt in my first month went down by $12 billion vs a $200 billion increase in Obama first mo”
Guest Contribution: “Let the US Fiduciary Rule Go Ahead”
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 on February 21st in Project Syndicate.
The “Unsustainable” US-Mexico Trade Deficit
From CNNMoney, President Trump:
“With Mexico we have $70 billion in deficit. … It’s unsustainable. … We’re not going to let it happen, can’t let it happen,”
Taking the President at His Word: Deportation As a “Military Operation”
Full quote:
“We’re getting really bad dudes out of this country, and at a rate that nobody’s ever seen before,” Trump said Thursday. “And they’re the bad ones. And it’s a military operation.”
The US-China Bilateral Trade Balance in Value Added
As the Administration mulls over possible trade actions against China, it is important to concede official trade statistics do provide in some sense a misleading picture of US-China bilateral trade — but not misleading in a way such that if corrected bolsters the Administration’s arguments.
The Trade Deficit Is Nearly 15% of GDP (“Alternatively Defined”)!
If we count only the import side and not the export side of re-exports, as some in the Administration have suggested, we might as well go “whole hog” and redefine the trade balance completely: Let’s count imports, but not exports.
Figure 1: The trade balance defined as net exports/GDP (blue), and the trade balance excluding exports (red). Source: GDP advance release for 2016Q4, and author’s calculations.