We will be making some exciting changes to Econbrowser, moving to a new system for managing posts and comments. In preparation for the transition, we have temporarily closed all comments, and at some point during this weekend the complete site may be unavailable. We hope to have a new and better system completely functioning by the end of the weekend, and apologize for the temporary inconvenience.
On R-squared and economic prediction
Recently I’ve heard a number of otherwise intelligent people assess an economic hypothesis based on the R2 of an estimated regression. I’d like to point out why that can often be very misleading.
Wisconsin’s State of the State
Governor Walker delivered his State of the State address tonight (video here). From the press release:
“Tonight, we are laying out a plan to move Wisconsin further down the road to prosperity,” Governor Walker said. “Our friends and neighbors are going back to work and job creators are expanding their businesses. Thanks to sound fiscal management, I am proud to announce further tax relief for Wisconsinites and additional funding for worker training. We will continue to work diligently until everyone who wants a job can find a job.”
Guest Contribution: “The Impact of Exchange Rate Movements on Exports”
An Analysis of Indian Non-Financial Sector Firms
Today we are fortunate to have a guest contribution by Yin-Wong Cheung (HK City University) and Rajeswari Sengupta (Indira Gandhi Institute of Development Research). This post is based on their paper.
Euro and Non-Euro Countries and Fiscal Policy
Contractionary fiscal policy is … contractionary
There has been some dispute over the robustness of the finding that countries that embarked upon fiscal contraction experienced lower growth. There’s also been some dispute over the proper time horizon (I used 2010-12 in this post.) Here I provide some additional information.
Links for 2014-01-19
Quick links to a few items I found of interest.
Friday Fiscal Lookback
I’m writing a piece on recent thinking on fiscal policy efficacy, and in looking back at the debate over the American Recovery and Reinvestment Act, I read this choice comment from an Econbrowser reader in September 2009:
After today’s unemployment report, and in light of your past running blog fight with Posner, I’m thinking that Q3 GDP is going to come in much, much less than you would have predicted based on stimulus spending. You won’t take this as a repudiation of your multiplier theories, but I will.
So Much for International Monetary Cooperation
From Ted Truman (former director of Int’l Finance at the Fed, former Ass’t Sec. Treasury), at Peterson Institute’s Real Time Economic Issues Watch, yesterday:
The impending congressional adoption this week of a $1.1 trillion appropriations bill has been hailed far and wide as a victory for sorely needed bipartisanship cooperation in Washington. Left out of the legislation, however, was an important but little understood and underappreciated proposal to implement reform at the International Monetary Fund (IMF). …
Guest Contribution: “Understanding the Potential Effects of QE on Gross Financial Flows to Developing Countries”
Today we are fortunate to have a guest contribution written by Jamus Jerome Lim (World Bank), Sanket Mohapatra (World Bank), and Marc Stocker (World Bank). The findings, interpretations, and conclusions expressed in this article are entirely those of the authors. They do not necessarily represent the views of the World Bank, its Executive Directors, or the countries they represent.
Reserve Accumulation in the Wake of the Great Recession
More from For a Few Dollars More: Reserve Accumulation in Times of Crisis, by Matthieu Bussiere (Banque de France), Menzie Chinn (UW), Gong Cheng (Sciences Po), Noemie Lisack (European University Institute) (also NBER Working Paper No. 19791):