The results from the triennial BIS forex survey are out. Unsurprisingly, trading volume continues to rise, the dollar retains its dominance in forex transactions, and the dollar/euro currency pair is the most heavily traded. But, notably, algorithmic trading is on the rise.
Debt ceiling politics
The decision to raise the debt ceiling will be the first test of whether the Republicans can move from tree shaking to jelly making.
On Reading “The Financial Crisis Primer”
The Republican members on the FCIC released a Financial Crisis Primer that has been debunked by a number of observers (since so many of the old canards were hauled out, this was easily accomplished). [0] [1] But the refusal to allow the phrase “Wall Street” in the final commission report [2] impelled me to quantify the attempts by Wall Street to influence financial legislation in the years leading up to the financial crisis.
Energy cornucopia?
Don Boudreaux and Mark Perry are among those who regard John Tierney’s claims of energy cornucopia to be persuasive.
Best economics blogs
The Wall Street Journal has a new list of the best economics blogs, but may have inadvertently omitted the names of some of the best economics bloggers.
Hazards in Interpreting Seasonals
Professor Casey Mulligan has an interesting post, in which he observes that while retail sales are about 15-20% higher in December than in the previous three months, retail employment is only about 4% higher in December than October, thus proving that fiscal stimulus cannot be very effective at raising employment.
Looking back at the Great Recession
Some people use the end of December as an opportunity for a retrospective on the year. But I decided to take a look back at the last three years, by way of updating some comparisons I made in April 2009 between the Great Recession and the average characteristics of other postwar recessions.
Petroleum Prices and the International Dimension
Paul Krugman observes that there are many real side factors that should drive oil prices higher (in an article that cites Jim’s 2009 paper). I certainly don’t have much to add in terms of thinking about oil prices and domestic macro implications, but Krugman’s note did impel me to examine more closely the international aspects of the underlying demand factors.
Changes in the yield curve
The bond market sees an improving economy.
Consumption, Imports and the Prospects for US External Balances
Most forecasts incorporate a resurgence in the US trade and current account deficits. This projection makes sense to the extent that the US is expected to grow faster than Europe and Japan, and the estimated income elasticity of US imports exceeds that of US exports (the Houthakker-Magee finding [0]). Here’s a summary of forecasts for the current account.