On Saturday I commented on whether
rising oil prices threaten the economic recovery. Here are some quick links to perspectives from other observers.
Averting the Consumption Disaster
The CEA has just released the newest quarterly report on the impact of the ARRA. In addition to tabulating the impacts on output and employment, there’s a special section by Chris Carroll (one of the leading authorities on modeling consumption behavior — I used to teach his papers in my PhD macro course), which concludes in the absence of the ARRA “…consumer spending would likely have continued to fall” (which is consistent with my post from a couple days ago).
IMF WEO: “Transitioning out of Sustained CA Surpluses”
[Corrections made 11am Pacific]
“Getting the Balance Right: Transitioning Out of Sustained Current Account Surpluses” by Abdul Abiad, Daniel Leigh and Marco Terrones:
This chapter examines the experiences of economies
that ended large, sustained current account surpluses
through policy actions such as exchange rate appreciation
or macroeconomic stimulus. It subjects these
historical episodes to statistical analysis and provides a
narrative account of five specific transitions, examining
economic performance and identifying key factors that
explain various growth outcomes.
“Where’s the Consumption Disaster?”, Again
Back in November 2009, Casey Mulligan asked this question, and observed:
Both of these [disposable income and consumption] are HIGHER in September 2009 than they were a year earlier.
I observed that it made sense to look at per capita values; and that changed the conclusions substantially.
The Post-Crisis Global Economy: Prospects for Recovery and Reform
Join a distinguished panel of speakers, including Jeffry Frieden, Stanfield Professor of International Peace, Department of Government, Harvard University, Menzie Chinn, Professor of Economics and Public Affairs, and Michael Knetter, Albert O. Nicholas Dean, Wisconsin School of Business, for a discussion of pressing questions facing the global and U.S. economies in the aftermath of the crisis. Moderated by Mark Copelovitch, Assistant Professor of Political Science & Public Affairs.
A Chinese Trade Deficit?
From Reuters:
China’s $7.24 billion deficit in March, the first time the trade balance has been in the red since April 2004, mainly reflected strong imports of oil, raw materials and cars, the General Administration of Customs said on Saturday.
Do rising oil prices threaten the economic recovery?
Ten of the 11 recessions in the United States since World War II have been preceded by a sharp increase in the price of crude petroleum. Oil had been holding around $80/barrel over the last month, but traded as high as $87 last week, leading the Financial Times to ask whether oil could give the “kiss of death to recovery.” Here is how I would answer that question.
Measuring the Long Run Real Exchange Rate – Income Relationship
Yanping Chong, Oscar Jorda and Alan M. Taylor have tackled the perennial challenge of measuring the long run relationship between the real exchange rate and per capita income levels. From the abstract to The Harrod-Balassa-Samuelson Hypothesis: Real Exchange Rates and their Long-Run Equilibrium:
Frictionless, perfectly competitive traded-goods markets justify thinking of purchasing power parity (PPP) as the main driver of exchange rates in the long-run. But differences in the traded/non-traded sectors of economies tend to be persistent and affect movements in local price levels in ways that upset
the PPP balance (the underpinning of the Harrod-Balassa-Samuelson hypothesis, HBS). This paper uses panel-data techniques on a broad collection of countries to investigate the long-run properties of the PPP/HBS equilibrium using novel local projection methods for cointegrated systems. …
Links for 2010-04-07
A few items from the ‘sphere that you might find interesting.
The Predictive Content of Commodity Futures: Latest Estimates
Econbrowser readers will know that I’ve long been interested in how derivatives like futures predict commodity prices. An early paper on energy futures, coauthored with my former CEA colleagues Michael LeBlanc and Oli Coibion, was summarized in this 2006 post (paper here). Recently, Oli Cobion and I have updated and expanded our examination, to incorporate for the most recent data, account for GARCH effects, alloow for time variation, and to try to explain why there has been time variation in the deviations in the unbiasedness proposition.
From the abstract to our paper: