Wednesday , January 24 2018
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Econbrowser – James Hamilton

World Economic Outlook Update: Upwardly Revised Growth, Rising Risks?

The IMF released an update to WEO today: Source: IMF, WEO (January 2018). From the report: Buildup of financial vulnerabilities. If financial conditions remain easy into the medium term, with a protracted period of very low interest rates and low expected volatility in asset prices, vulnerabilities could accumulate as yield-seeking investors increase exposure to lower-rated corporate and sovereign borrowers and less credit-worthy households. As noted in the October 2017 Global Financial...

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Guest Contribution: “Trump’s Tax Cut Will Worsen the US Current Account Deficit”

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. This is an extended version of a column Project Syndicate on January 15th. President Trump and the Republicans succeeded last month in passing their big tax cut. It may not have many of the desirable attributes of true tax reform (equity, efficiency, bi-partisanship, revenue-neutrality,...

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Wisconsin Nonfarm Employment Flat

Today, the DWD released statistics for December here. Total nonfarm payroll declined slightly, private increased slightly. The cumulative gap with respect to Minnesota (and the US) widened in both cases. Figure 1: Nonfarm payroll employment in Minnesota (blue), Wisconsin (red), and US (black), all in logs normalized to 2011M01=0. Light green shaded dates indicates data not yet benchmarked using QCEW data. Source: WI DWD, MN DEED, BLS and author’s calculations. Figure 2: Private nonfarm...

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Ruminations about What (and How) to Post in the Current Times

Reader rtd admonishes me: Someone with your smarts & level of education should be able to ignore these types of political rhetoric & certainly not induce you to create a blog post devoted to such atrocious comments & lunacy (particularly considering, as you’ve explicitly noted in the past, that you hold your readers to a relatively high regard as it relates to their intellectual capabilities). Unfortunately your (persistent) biases & subjectivity don’t seem to allow you to...

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Guest Contribution: “Inequality Falls Globally, Even as it Rises Within-Country”

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.. There are lots of measures of inequality. If we are interested only in income distribution within the United States, it doesn’t matter much which one we look at: They all show rising inequality, as noted in my preceding blogpost. But when we look at inequality internationally, which measure we look at...

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No Retraction: TCJA Average Growth Acceleration = 0.01-0.02%

In response to my quote of CRFB’s assertion that average growth acceleration under the Tax Cuts and Jobs Act relative to baseline will be only between 0.01-0.02 percent (shown below), Source: Committee for a Responsible Federal Budget (Jan. 3, 2018). Reader Vivian Darkbloom writes: I’m asking myself how an average increase of only 0.01 percent to 0.02 percent in GDP growth over a decade could result in an average of increase in the level of GDP output of 0.7 percent of that same ten-year...

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Polling Data Analysis with Stephen Moore

Not lying so much as willfully misleading. I had the misfortune to watch Stephen Moore debating approval ratings for Trump by African Americans. From RawStory: …you have to look at [Trump’s] record when it comes to civil rights not necessarily what he said or is alleged to have said,” Moore answered. “Brooke, if this man is a racist, why is it that his approval rating, among blacks, has increased while he has been president? It’s because of his record, not what he says.” Data on this...

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A Trumpian Immigration Policy

Once again I’m going to save Donald Trump some time in writing up the legislation. Here is some handy-dandy text borrowed from the Chinese Exclusion Act of 1882. An Act to Execute Certain Treaty Stipulations Relating to individuals of s***hole countries Whereas, in the opinion of the Government of the United States the coming of individuals of s***hole countries to this country endangers the good order of certain localities within the territory thereof: Therefore, Be it enacted by the...

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Economic Policy Uncertainty on the Rise

What does it mean for economic activity?Figure 1: Daily US Economic Policy Uncertainty Index (blue), and centered 7 day moving average (bold red). Source: policyuncertainty.com accessed 1/15/2018, and author’s calculations. Does economic policy uncertainty matter for real activity. In a new CEPII brief, Laurent Ferrara, Stéphane Lhuissier & Fabien Tripier review the evidence in “Uncertainty Fluctuations: Measures, Effects and MacroeconomicPolicy Challenges”. Their Lesson #3 is...

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