Monday , March 27 2017
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Econbrowser – James Hamilton

Guest Contribution: “Mnuchin, Multilateral Meetings, Money Manipulation, and Message Mayhem”

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. A appeared on March 22nd in Project Syndicate. US Treasury Secretary Steven Mnuchin is already finding himself hemmed in on all sides. Domestic constraints come from the promises that he and President Trump have made and the laws of arithmetic. How, for example, is he ever going to be...

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CBO Projections of Coverage under the ACA

We all know that the CBO has been under assault over the recent scoring of the AHCA (14 million reduction in coverage by 2018, 26 million by 2026), with allegations that their previous projections have been “wrong”. I document in this post that CBO macro projections have been comparable to Blue Chip averages, in terms of accuracy (mean bias, RMSE’s). In terms of the issue at hand, here is a graph depicting various vintages of CBO projections of reduction in uninsured. Source: WaPo via Daily...

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EconoFact: “The Agricultural Implications of Mr. Trump’s Policies”

That’s the title of a new EconoFact memo written by me: Nearly 70 percent of rural votes cast in the 2016 election went to Donald Trump. This phenomenon has been attributed in part to the declining fortunes of farmers. But rather than helping reverse this trend, several of the Trump administration’s policy proposals would negatively affect the fortunes of the agricultural sector by depressing the prices received by farmers, reducing the demand for American agricultural exports, and raising...

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Nowcasting with OMB Director Mick Mulvaney

Since Mr. Mulvaney has been criticizing the numbers produced by the BLS [1], and scoring by CBO [2], I thought it of interest to see Mr. Mulvaney’s record on predictions. To make things easy on Mr. Mulvaney, I thought it would be more fair to evaluate his “nowcasting” abilities. In July 2016, Mr. Mulvaney gave a speech to the John Birch Society in which he observed: the Fed’s actions have “effectively devalued the dollar” and harmed economic growth. It is difficult to assess the economic...

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TrumpCare Evaluated

“I am going to take care of everybody. I don’t care if it costs me votes or not. Everybody’s going to be taken care of much better than they’re taken care of now.”— Donald J. Trump, September 27, 2016 CBO has released its cost estimate. President Trump’s promise will not be fulfilled by this particular legislation. CRFB presents graphically the impact by 2026:Source: CRFB. If the 24 million reduction in insured relative to current law weren’t alarming enough, the 14 million reduction by...

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2017 Econbrowser NCAA tournament challenge

March Madness returns! All are invited to sign up for the world famous tenth annual NCAA tournament challenge, in which you can demonstrate your inability to predict the outcome of the U.S. college men’s basketball tournament. If you want to participate, go to the group at ESPN, do some minor registering to create a free ESPN account if you haven’t used that site before, and fill in your bracket before Thursday at noon! I see that a number of the more serious...

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How Financially Open Is the World?

Hiro Ito, who updates our de jure financial openness index (sometimes known as the Chinn-Ito index), has recently calculated GDP-weighted averages of the indices for country categories. The stylized facts regarding the evolution of openness changes, particularly with regard to emerging market economies. First, here are the typically reported simple average series, standardized to range between 0 and 1. Figure 1: Unweighted Average of KAOPEN for Different Country Groups. Source: Chinn and...

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Noted Forecaster Sean Spicer on CBO Projections

From The Hill: If you’re looking at the CBO for accuracy, you’re looking in the wrong place,” White House press secretary Sean Spicer said Wednesday. Since Mr. Spicer’s BA is in government rather than economics, I thought it useful to consult some documentation based on quantitative assessment. Here are three graphs from CBO, “CBO’s Economic Forecasting Record: 2015 Update,” February 2015. Source: CBO, “CBO’s Economic Forecasting Record: 2015 Update,” February 2015. here is a summary for...

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Wisconsin Benchmarked Employment through January: Flat since April

Today, the Wisconsin Department of Workforce Development released establishment data benchmarked to data from the Quarterly Census of Employment and Wages through September of 2016. Briefly, Wisconsin employment continues to lag the Nation, and its neighbor Minnesota. Figure 1: Log nonfarm payroll employment for Minnesota (blue), Wisconsin (red), and US (black), all normalized to 2011M01=0. Green shading denotes period for which QCEW data is not available. Source: BLS, DWD, DEED, accessed...

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National Security and Trade Deficits

National Trade Council Director Peter Navarro writes in the WSJ: The national-security argument that trade deficits matter begins with this accounting identity: Any deficit in the current account caused by imbalanced trade must be offset by a surplus in the capital account, meaning foreign investment in the U.S. … running large and persistent trade deficits also facilitates a pattern of wealth transfers offshore. Warren Buffett refers to this as “conquest by purchase” and warns that...

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