The price and income elasticities of Chinese trade flows are key parameters in the debate regarding the importance of Renminbi revaluation in achieving rebalancing. [0][1] I was hoping to update my estimates to incorporate data spanning the recent crisis, but Shaghil Ahmed at the Fed beat me to the punch with a new working paper that includes data spanning the recent downturn in Chinese trade flows. From Are Chinese Exports Sensitive to Changes in the Exchange Rate?
Why Bernanke should be reconfirmed
Econbrowser readers are well aware that there are a number of issues on which I have concerns about some of the decisions the Fed has made, such as
dropping the ball on regulation ([1],
[2]),
keeping interest rates too low for too long over 2003-2005 ([1],
[2]),
taking some real risks with the Fed’s new balance sheet ([1],
[2],
[3]), and
pretending the Fed had nothing to do with the commodity price boom of 2008 ([1],
[2]). Notwithstanding, there is no question in my mind that Bernanke should be reconfirmed as Chair of the Federal Reserve Board. Here’s why.
Consumption Prospects and Rebalancing
In several previous posts, I’ve emphasized the importance of future US consumption behavior in determining whether the global imbalances shrink, or revert to their pre-crisis configuration. [0] [1] [2] An IMF SPN by Jaewoo Lee, Pau Rabanal, and Damiano Sandri weighs in on the question of consumption. From the executive summary:
Inflation fears
Is it reasonable to worry about inflation in the current environment?
Policies for Increasing Economic Growth and Employment
From the CBO’s report “Policies for Increasing Economic Growth and Employment in 2010 and 2011” released Jan 14, is an assessment of the boost to GDP and employment from various policies. Proper consideration of these measures are critical given the prospects for the output gap [0] and employment growth [1].
How the Federal Reserve earned its profit
I was curious to take a look at the details behind the following story:
The Federal Reserve Board on Tuesday announced preliminary unaudited results indicating that the Reserve Banks provided for payments of approximately $46.1 billion of their estimated 2009 net income of $52.1 billion to the U.S. Treasury. This represents a $14.4 billion increase over the 2008 results.
The January WSJ Survey: Recovery and Interest Rates
The WSJ survey for January is out. Growth is predicted to be fairly rapid, but hardly torrid, in 2010, with q4/q4 mean estimate at 3.0%. Here’s the mean forecast of the log level of GDP, and the trimmed high and low forecasts.
Haiti relief efforts
One of the organizations to which I have made a contribution is Heart to Heart International.
What Are Current Small Business Credit Conditions, Really?
Casey Mulligan titles a post Credit Study by the Federal Reserve Says No Crunch, citing a Macroblog post. But he neglects to mention that the survey is “A small business snapshot from the Southeast”. In contrast, a nation-wide NFIB survey summarizes conditions thusly:
Assessing Stimulus Measures: Statistical and Economic Significance
The CEA has updated its estimates of the impact of the stimulus plan on output. As I observed in my earlier post on assessing the results on 2009Q3 impact, one could use either a model approach (using multipliers, which can be derived from either neo-Classical synthesis, New Classical, New Keynesian models [0] [1]) or examine the actual versus some counterfactual based upon historical correlations (what CEA calls the “projection approach”).