More on Real Exchange Rate Changes and Trade Adjustment

Time for an update on estimated income and price elasticities of US trade flows. These issues are important to those of us who believe that the US remains vulnerable to shifts in the rest-of-the-world’s willingness to finance the current account deficit. If you think it’s just jolly fine and likely for the US to keep on borrowing at around 6.5 percent of GDP for the indefinite future, skip this post.

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One (Non-Isolated) Example of the Current State of Affairs in Government Administration

From GovExec.com:

Special counsel finds GSA chief violated Hatch Act

By Daniel Pulliam dpulliam@govexec.com May 23, 2007

A report from the federal agency that investigates allegations of illegal political activity in the government has concluded that Lurita Doan, the head of the General Services Administration, violated the Hatch Act.

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Who should pay this bill?

I suggested a few weeks ago that rising crude oil prices along with seasonal demand and fuel requirements were the primary cause of this spring’s hike in U.S. gasoline prices. As Menzie noted yesterday, refining margins are clearly also now making an additional contribution. Which reminded me to look into the current status of the now decade-long effort of Arizona Clean Fuels to try to build a new refinery.

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