December 05, 2010
Still no strength in this rebound
The new news looks to me like the same old news.
Continue reading "Still no strength in this rebound"
Posted by James Hamilton at 07:35 AM permalink | Comments (23) | digg this | reddit
December 04, 2010
The Hill: "Senate rejects million-dollar tax-cut compromise in Saturday session"
Or more clearly, all Senate Republicans plus one four Democrats reject a tax cut for incomes below one million dollars. From The Hill:
Republicans had held firm in recent weeks that the tax cuts — designed to benefit the wealthiest Americans — should be permanently extended as a whole. Democrats had argued that only the cuts for the middle class should be extended, also blasting Republicans for failing to propose any spending cuts or revenue increases to pay for all of the cuts.
Posted by Menzie Chinn at 09:29 AM permalink | Comments (51) | digg this | reddit
December 02, 2010
CEA Assessment of the the Impact of Letting UI Extensions Expire
From the CEA's report "The Economic Impact of Recent Temporary Unemployment Insurance Extensions" released earlier today.
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Posted by Menzie Chinn at 02:56 PM permalink | Comments (44) | digg this | reddit
Chicken**** Passes House
(That's not my phrase, it's Rep. Boehner's). Or, tax cut extension for income less than $250,000 passes. From The Hill:
House passes middle-class tax bill with three Republicans supporting
By Vicki Needham - 12/02/10 04:00 PM ET
The House passed by a vote of 234-188 a measure that permanently extends expiring middle-class tax cuts and provides a patch for the alternative minimum tax.
Continue reading "Chicken**** Passes House"
Posted by Menzie Chinn at 01:59 PM permalink | Comments (21) | digg this | reddit
December 01, 2010
BCA, UI and EGTRRA/JGTRRA
Four Acronyms in a Very Depressing Play
Truly we are in a strange world where legislative extension of unemployment insurance payments, which is highly effective at maintaining aggregate demand, is stalled, while giving tax cuts to households with income in excess of $250K (a.k.a. the Todd Henderson households) moves forward despite having very little impact on employment and aggregate demand. In other words, on benefit-cost grounds we would want to do exactly the reverse. Given the sheer incoherence of some of the arguments being propounded, it might be useful to recap some findings.
Continue reading "BCA, UI and EGTRRA/JGTRRA"
Posted by Menzie Chinn at 10:02 PM permalink | Comments (36) | digg this | reddit
November 30, 2010
Europe and China: is this deja vu all over again?
The autumn of 2010 is in some ways a replay of what we saw last spring. Is what we saw then a guide to what's going to happen next?
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Posted by James Hamilton at 12:52 PM permalink | Comments (23) | digg this | reddit
November 29, 2010
And This Is Going to Lead to High Inflation?
I struggle and struggle to understand the fear of near-term, rapid inflation that is being stoked by the likes of commentators noted here and here. This struggle becomes even more profound when I examine actual data.
Continue reading "And This Is Going to Lead to High Inflation?"
Posted by Menzie Chinn at 07:09 AM permalink | Comments (43) | digg this | reddit
November 27, 2010
Peak oil in Pennsylvania
Here I pass along a few items on the early history of the oil industry that I found interesting.
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Posted by James Hamilton at 12:44 PM permalink | Comments (32) | digg this | reddit
November 25, 2010
Core at Zero
At least, month-on-month. Three month annualized inflation -- either PCE or CPI -- both under 0.5%:
Continue reading "Core at Zero"
Posted by Menzie Chinn at 11:34 PM permalink | Comments (40) | digg this | reddit
November 24, 2010
The Fed's communication problem
The start of the FOMC's November meeting is described in the minutes released yesterday as follows:
The meeting opened with a short discussion regarding communicating with the public about monetary policy deliberations and decisions. Meeting participants supported a review of the Committee's communication guidelines with the aim of ensuring that the public is well informed about monetary policy issues while preserving the necessary confidentiality of policy discussions until their scheduled release. Governor Yellen agreed to chair a subcommittee to conduct such a review.
Here I provide some suggestions for Governor Yellen's subcommittee to consider.
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Posted by James Hamilton at 09:57 AM permalink | Comments (23) | digg this | reddit
November 22, 2010
Representative Ryan Requests
And Barry Eichengreen anticipates with an answer
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Posted by Menzie Chinn at 07:25 AM permalink | Comments (39) | digg this | reddit
November 20, 2010
Answering the bunnies
A cartoon has been making the rounds (e.g., Forbes, Zero Hedge, and Real Clear Politics) in which cartoon characters (bunnies maybe? or perhaps some other life form) ask questions about quantitative easing. I would have provided slightly different answers than did the didactic character in the cartoon, so I thought it might be fun to interject myself as a third character in the bunnies' conversation.
Continue reading "Answering the bunnies"
Posted by James Hamilton at 08:59 AM permalink | Comments (71) | digg this | reddit
November 18, 2010
Assessing Fantasy Scenarios
With the EGTRRA/JGTRRA extensions and proposals for tax reform and debt reduction flying left and right, I think it behooves us to review what the theoretical (well, actually undergraduate textbook) literature and the empirical assessments suggest will be the impact of tax rate changes. I want to devote special attention to the hypothesis that there will be large dis-incentive effects on high income households should their tax rates go up, with correspondingly large negative ramifications for overall economic activity.
Continue reading "Assessing Fantasy Scenarios"
Posted by Menzie Chinn at 06:20 AM permalink | Comments (32) | digg this | reddit
November 17, 2010
Billion prices project
Justin Lahart is among those calling attention to the Billion Prices Project of MIT Professors Roberto Rigobon and Alberto Cavallo.
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Posted by James Hamilton at 06:58 AM permalink | Comments (14) | digg this | reddit
November 16, 2010
Cut the Deficit!
The New York Times has provided a neat interactive graphic that allows one to see how various proposals affect the budget deficit in 2015 and 2030, here.
Continue reading "Cut the Deficit!"
Posted by Menzie Chinn at 10:05 AM permalink | Comments (23) | digg this | reddit
November 15, 2010
Jeffrey Frankel on QE2, Inflation Hysteria and Actual Facts
Recalling President Reagan's statement, "Facts are stupid things", it's no surprise that the disinformation campaign arguing that the Fed has been pressured into engineering a bout of high inflation continues. Jeffrey Frankel helps bring some facts to the table. From "The pot again calls the kettle red: Republicans, Democrats, the Fed and QE2".
Continue reading "Jeffrey Frankel on QE2, Inflation Hysteria and Actual Facts"
Posted by Menzie Chinn at 02:05 PM permalink | Comments (44) | digg this | reddit
November 13, 2010
Losing the Battle, Winning the War?
Or, the Economic Implications of the G-20 Meeting's Aftermath
The narrative emerging in the wake of the G-20 meetings is that, not only is the rest of the world angry at us over quantitative easing, but we also achieved none of our diplomatic objectives regarding rebalancing (the coverage seemed particularly negative on CNBC). [1] [2] [3] In addition, the outcome has been taken as a harbinger of the end of US dominance over economic policymaking, to the extent the US no longer has the intellectual high ground (given the failure to regulate the financial system in a sensible way) and the relative decline in economic weight.
Continue reading "Losing the Battle, Winning the War?"
Posted by Menzie Chinn at 12:32 PM permalink | Comments (31) | digg this | reddit
November 11, 2010
Inflation Fears and Measures of Expected Inflation
Recent news items have noted the fears of several individuals that QE2 will spark rapid inflation, e.g. [1]. For instance, Representative Paul Ryan, expected to become the Chairman of the House Budget Committee in January, stated: "I think it's going to give us a big inflation problem down the road."
Here are what various market-based indicators suggest.
Continue reading "Inflation Fears and Measures of Expected Inflation"
Posted by Menzie Chinn at 11:59 AM permalink | Comments (25) | digg this | reddit
November 10, 2010
Commodity inflation
I guess now we know that the Fed has the tools to prevent deflation.
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Posted by James Hamilton at 07:29 AM permalink | Comments (55) | digg this | reddit
November 09, 2010
Gold standard discussion
The New York Times hosts a discussion of the proposal by World Bank President Robert Zoellick for an international monetary system that uses the price of gold as a reference.
Posted by James Hamilton at 07:55 PM permalink | Comments (27) | digg this | reddit
November 08, 2010
East Asian Exchange Rates and China’s Trade Surplus
By Willem Thorbecke
Today, we're fortunate to have Willem Thorbecke, Senior Research Fellow at Asian Development Bank Institute, and consulting fellow at Japan's Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of ADBI, RIETI, or any other institutions the author is affiliated with.
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Posted by Menzie Chinn at 09:34 PM permalink | Comments (17) | digg this | reddit
Alaska and the Gulf of Mexico and Oil
Several articles caught my attention: first, the impact on the Gulf from the largest oil spill in US history, in particular on coral [0], and second, the attempts to get approval to drill off Alaska's coast [1].
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Posted by Menzie Chinn at 02:10 PM permalink | Comments (7) | digg this | reddit
November 07, 2010
Current economic conditions
Things look slightly cheerier than they did a month ago. But that's not saying much.
Continue reading "Current economic conditions"
Posted by James Hamilton at 06:48 AM permalink | Comments (7) | digg this | reddit
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