In a new working paper, the St. Louis Fed’s Christopher Neely argues The Large Scale Asset Purchases Had Large International Effects.
The Federal Reserve’s large scale asset purchases (LSAP) of agency debt,
MBSs and long-term U.S. Treasuries not only reduced long-term U.S. bond yields also
significantly reduced long-term foreign bond yields and the spot value of the dollar. …
A reader requests that we update some of the charts we’ve used to track U.S. energy expenditures.
In this post, Keith Hennessey takes issue with President Obama’s assertion there were spiraling deficits during the President G.W. Bush years. He presents this graph.
One of the big issues facing policymakers around the world is the evolution of the pattern and volume of international trade flows. I recently participated in a very useful conference that included a number of papers that shed light on this important question. The conference, “Trade Costs and International Trade Integration — Past, Present and Future,” organized by Dennis Novy (Warwick University), David Jacks (Simon Fraser University), and Christopher Meissner (University of California, Davis), and sponsored by the UK’s ESRC, and the University of Warwick’s CAGE.
Yesterday, Greg Mankiw discussed the trilemma in international finance, noting that countries can trade off between capital mobility, monetary policy autonomy, and exchange rate stability, but cannot fully all three of those objectives at a given time. In this post, Hiro Ito cites work with Joshua Aizenman and myself, in which we quantified how countries have traded off these objectives over time (paper here).
I’ve been taking a look at what happened to the demand for U.S. Treasury bills and bonds as a result of the financial crisis. Here’s a summary of some of the data that I found interesting.
From Bloomberg’s Mike Rosenberg, in FX Market Insights (June 28):
The euro is now two years into what might be another
long-term downtrend. …
A new study
by Fed economists Neil Bhutta, Jane Dokko, and Hui Shan concludes that the median borrower does not strategically default until equity falls to -62 percent of their home’s value.
Karl Smith is not impressed by the USDA’s claims about the effects of a soda tax on childhood obesity.
Political Calculations compares the attractiveness to businesses of locating in California versus Texas.
Some analysts have claimed that basketball star LeBron James saved himself $12 million in taxes by choosing to play in Florida rather than New York, though Aaron Merchak, David Henderson, and
Frank Stephenson refine the calculation.
And some UCLA scientists found that brain scans can predict what you’re going to decide better than you can.
I await June figures with bated breath. From NOAA:
Given concerns about large budget deficits and quantitative easing feeding into inflation even as actual inflation was falling, I wondered what standard measures indicated. This follows up on the same question I posed in May of last year.