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Or, Ironman at Political Calculations mangles Econ 101.

If you want to see Ironman mangle the use of economic statistics, see this post.

benefit calculation DWL externalities Ironman Marginal Political Calculation social soda tax

 

Today we are pleased to present a guest contribution written by Pierre Siklos, Professor of Economics at Wilfrid Laurier University.

Note: The figure reproduces part of Figure 7.6 in Siklos (2017).

central bank crisis economic estimate financial inflation institution monetary policy recent weather

 

U.S. begins ninth year of economic expansion [0.10]

Posted on July 28, 2017, 10:26 p.m. by Econbrowser @ [source]

The Bureau of Economic Analysis announced today that U.S. real GDP grew at a 2.6% annual rate in the second quarter. That is below the long-term historical average of 3.1%, but better than the 2.1% we’ve seen on average since the Great Recession ended in 2009.

annual fixed GDP increases investment oil quarter rate recession Solid

 

Steve Kopits obsesses on the household survey based employment series for Wisconsin, despite our previous exchange on why reliance on this series for Kansas is a problem. But just to make matters concrete, lets look at a few vintages of the household series.

civilian employment establishment household June release Steve survey variation Wisconsin

 

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. After all, they have spent 7 years with that as their single-minded goal, they campaigned on it in the 2016 presidential election, and they now control all branches of government.

government Health health care insurance mandate Obamacare pay Republican role system

 

Context Is Important: More on MN vs. WI [0.07]

Posted on July 25, 2017, 1:43 p.m. by Econbrowser @ [source]

Reader Jesse Livermore thinks he’s discovered Wisconsin is in actuality doing really well vis a vis Minnesota.

Wisconsin personal income growth dramatically outperformed Minnesota in Q1.

growth higher income Jesse Livermore Minnesota personal Reader vis Wisconsin

 

And lags further behind its neighbor Minnesota. Finally, employment lags what would be predicted from the historical correlation of Wisconsin employment with national.

correlation employment historical Lag National NFP nonfarm payroll predicted Wisconsin

 

Stephen Moore Is a Liar, Part 2 [0.04]

Posted on July 21, 2017, 1:01 p.m. by Econbrowser @ [source]

Readers will recall that, in response to CNN bringing Stephen Moore on board as an “economics analyst”, I noted that Stephen Moore is a liar. Now as the Brownback experiment has ended, it’s useful to see exactly how disastrous the Moore prescription has been for the Kansas economy.

calculations California Florida gained job Kansas Moore past Texas year

 

So You Want to Fix the Trade Deficit? [0.01]

Posted on July 20, 2017, 9:46 a.m. by Econbrowser @ [source]

Well, I don’t think a few tariffs and quotas, plus “tweaking” Nafta, are going to do it.

Something to remember, as the House starts trundling toward massive budget busting tax cuts (well, unless you believe spending cuts will be imposed in line with the tax cuts; if you do, well David Stockman has a bridge to sell you).

balance budget deficit defined dollar ex petroleum exchange rate net export saving trade

 

(Transitory) Revealed Preferences [-0.30]

Posted on July 20, 2017, 5:02 a.m. by Econbrowser @ [source]

Figure 1: Effects of H.R.

So, at least for part of one day, the President was content to let an additional 32 million be uncovered by 2026.

additional CBO content effects President table uncovered

 

Center for International Governance Innovation (CIGI, Canada); Centre d’Etudes Prospectives et d’Information Internationales (CEPII, France); Kiel Institute for the World Economy (IfW, Germany); Japan Institute for International Affairs (JIIA, Japan); Royal Institute for International Affairs (Chatham House, United Kingdom); Peterson Institute for International Economics (PIIE, United States). The project covered the following three subjects, representing major challenges for G7 policy-makers: macroeconomic policy coordination; international trade relations; global financial stability.

Affairs center conference governance innovation Institute international Japan policy United

 

The Administration Considers Raising Taxes [0.06]

Posted on July 15, 2017, 5:26 a.m. by Econbrowser @ [source]

STEEL REPORT COULD COME NEXT WEEK: Commerce Secretary Wilbur Ross is expected as early as next week to give President Donald Trump a menu of options for restricting steel imports, senators said after a closed-door meeting with the Cabinet official Thursday afternoon. This is interesting because imports of steel from China have decreased, and now rank behind countries like, for instance Russia.

administration American China domestic imports market raise restrictions Steel tariff

 

The CBO has just released an assessment of the President’s budget proposal.

Here are the projected budget balances, under CBO baseline (blue), as claimed in the Budget submitted by the White House (red), and as assessed by the CBO (green).

administration assessed balance baseline budget CBO economic Green President budget red

 

A New Puzzle à la Fama [0.08]

Posted on July 11, 2017, 6:05 a.m. by Econbrowser @ [source]

In a forthcoming paper (“The New Fama Puzzle”), coauthored with Matthieu Bussière (Banque de France), Laurent Ferrara (Banque de France), Jonas Heipertz (Paris School of Economics), we re-examine uncovered interest parity – the proposition that anticipated exchange rate changes should offset interest rate differentials. This development affords us the opportunity to examine whether the Fama puzzle is a general phenomenon or one that is regime-dependent.

coefficient differential examine Exchange expectations Fama finding interest puzzle rate

 

That’s from Bloomberg. Ya gotta wonder who’s running the show there.

balance China current dollars GDP international Republic Taiwan trade US

 

We have great capabilities in the area of trade.” [US Ambassador to UN Nikki] Haley said she spoke at length to President Donald Trump on Wednesday morning about “countries that are allowing, even encouraging trade with North Korea, in violation of U.N. Security Council resolutions.” “Such countries would also like to continue their trade arrangements with the United States,” she said. That’s because punishing China with effective trade sanctions would likely hurt America as much as the target (including through third channels as the global economy is hurt).

China countries credible hurt Model non sanctions threat trade Trump

 

In several recent pieces [1] [2] [3], I have worried about the economic implications of trade protection, particularly those moving forward in the guise of “national security”. While the President has recently spoken of the evils of Germany, I do not realistically believe there will be a surge of attacks on Americans of German descent, but should diplomatic and economic relations with China or other nations deteriorate, other groups may be targeted.

China countries economic groups implications minority moving partly President worried

 

Are we in a new inflation regime? [0.11]

Posted on July 2, 2017, 6:47 p.m. by Econbrowser @ [source]

In a world of global competition and new technology, I think competition is coming from new places. New partners are choosing to merge and sort of changing the marketplace and [bringing] more competitive pressures on price margins…If that’s the case, and I think that’s just speculative at this point, then it means that we need even more accommodation to get inflation up.

agree competition expectations factors inflation Natural Phillips rate unemployment year

 

Source: CRS.

Sources told CBS News that the last employees in the division, three holdovers from former President Obama’s administration, all left the White House this week.

CRS division employees House Obama policy reportedly Science staff White

 

Imagine…ACA Repeal and Delay [0.06]

Posted on June 30, 2017, 9:42 p.m. by Econbrowser @ [source]

Following Senator Sasse’s suggestion to implement HR 3762, the President tweeted in support of some version of repeal and delay.

The number of people who are uninsured would increase by 18 million in the first new plan year following enactment of the bill.

ACA CBO elimination enactment expansion marketplace Medicaid plan purchased subsidies