Teachers and State-Level Politics
Sunday, April 29, 2018
Saturday, April 28, 2018
World Bank Gets a New Chief Economist
Yale economist Pinelopi
Koujianou Goldberg appointed as the new Chief Economist of the World Bank:
Is the Era of Low Interest Rates Coming to an End?
The Era of Very Low Inflation and Interest
Rates May Be Near an End
Friday, April 27, 2018
Slowdown in US Consumer Spending
First estimate of 2018Q1 US GDP is out:
Bloomberg summary:
“U.S. economic
growth cooled last quarter as consumers pulled back following outsize spending
in the prior period, though solid business investment cushioned some of the
weakness and employee-compensation costs accelerated amid a tight job market.”
US Economic Recovery:
--
Post-Crisis US Consumer Spending:
Thursday, April 26, 2018
US-China Trade Spat
Stephen Roach on US-China Trade Spat
Jeffrey Frankel on US-China Trade Spat
U.S. Earns More
in China Than Trade Numbers Reveal
Financial Accelerator Effect in the Real World
Credit and financial conditions are often highly pro-cyclical:
Right now, credit conditions and lending standards are being
eased just as US economic growth is peaking:
Financial Deregulation Throws Fuel on
Already-Hot Economy
Macron offers a French Perspective on Global Challenges
French President’s address to the US Congress is well
received:
“Macron “solidified
his standing as leader of the West (to the extent there still is a West) by his
call today before Congress for an updated liberal world order to meet regional,
global challenges,” tweeted Richard Haass, the president of the Council on
Foreign Relations and a doyen of the Washington policy establishment. “His
problem is a lack of partners in Europe and here in U.S.””
Wednesday, April 25, 2018
The Importance of Economic Data
The fine art of reading financial accounts
and balance sheets by Peter van de Ven, OECD Statistics and Data
Directorate
Interesting quote:
“Back in 1777,
David Hume started his Essays on
Commerce and Trade with a surprising warning that can apply to the
intricacies (and importance) of financial accounts: “The greater part of
mankind may be divided in two classes, that of shallow thinkers who fall short
of the truth; and that of abstruse thinkers who go beyond it. The latter class
are by far the most rare and, I may add, the most useful and valuable.”
Rising US Home Prices
Factors influencing US home prices:
https://www.bloomberg.com/news/articles/2018-04-25/why-high-flying-u-s-home-prices-are-about-to-get-another-jolt
https://www.bloomberg.com/news/articles/2018-04-25/why-high-flying-u-s-home-prices-are-about-to-get-another-jolt
Tuesday, April 24, 2018
Rising Rates and Asset Allocation
Treasury benchmark yield reaches 3%:
https://www.bloomberg.com/news/articles/2018-04-23/how-3-percent-yields-could-reshape-the-investing-landscape
Yield curve flattening - cause for concern?
https://qz.com/1254990/the-us-yield-curve-is-getting-flatter-should-we-be-worried/
Yield curve flattening - cause for concern?
https://qz.com/1254990/the-us-yield-curve-is-getting-flatter-should-we-be-worried/
Monday, April 23, 2018
Education Matters
Lifetime learning is now essential:
https://www.bloomberg.com/view/articles/2018-04-23/adult-education-is-crucial-to-addressing-workers-skills-gap
Update:
Nobel laureate Paul Krugman on the politics of education funding in America
https://www.nytimes.com/2018/04/23/opinion/teachers-protest-education-funding.html
https://www.bloomberg.com/view/articles/2018-04-23/adult-education-is-crucial-to-addressing-workers-skills-gap
Update:
Nobel laureate Paul Krugman on the politics of education funding in America
https://www.nytimes.com/2018/04/23/opinion/teachers-protest-education-funding.html
Rising Debt Levels Pose a Threat to the Global Economy
Debt and the Global Economic Recovery
Debt surge in China
https://www.bloomberg.com/news/articles/2018-04-24/the-7-trillion-debt-pile-looming-large-over-chinese-households
America’s rising public debt
Debt surge in China
https://www.bloomberg.com/news/articles/2018-04-24/the-7-trillion-debt-pile-looming-large-over-chinese-households
Sunday, April 22, 2018
End of an Era in World Football
Andrés Iniesta, the legendary Barcelona midfielder, to
retire from club at the end of the season
Arsène Wenger to leave Arsenal after 22 years at the
helm:
https://www.theguardian.com/football/2018/apr/20/arsene-wenger-arsenal-miracle-worker-lost-his-touch
Interesting profile of Wenger:
Saturday, April 21, 2018
RECOMMENDED READING FOR BUDDING ECONOMISTS [UPDATED]
Here is a handy reading guide for those
wishing to pursue graduate education in Economics
(and Finance):
Macroeconomics
Macroeconomics
Macroeconomic Analysis by Dirk Niepelt
Dynamic Macroeconomics by George
Alogoskoufis
Advanced Macroeconomics by David Romer
Foundations of Modern Macroeconomics by
Ben J. Heijdra
Recursive Macroeconomic Theory by
Lars Ljungqvist and Thomas J. Sargent – Ph.D. level
Open Economy Macroeconomics by MartÃn Uribe and
Stephanie Schmitt-Grohé
Macroeconomics: Institutions, Instability, and the
Financial System by Wendy Carlin and David Soskice [BEST ADVANCED UNDEGRAD
TEXT]
Microeconomics
Microeconomic Theory: Basic Principles and Extensions by Walter Nicholson and Christopher M. Snyder
Advanced Microeconomic Theory: An Intuitive Approach with Examples by Felix Muñoz-Garcia
Microeconomic Theory by Andreu Mas-Colell,
Michael D. Whinston, and Jerry R. Green – PhD Level
Labor Economics by Pierre Cahuc, Stéphane Carcillo and André Zylberberg
Intermediate Microeconomics: A Tool-Building Approach by Samiran Banerjee [Advanced Undergraduate Micro Text]
Monetary Economics
Intermediate Microeconomics: A Tool-Building Approach by Samiran Banerjee [Advanced Undergraduate Micro Text]
Monetary Economics
Monetary Theory and Policy by Carl E.
Walsh
Monetary Policy, Inflation, and the Business
Cycle: An Introduction to the New Keynesian Framework and Its Applications
by Jordi Gali
Interest and Prices by Michael
Woodford
Economic Growth
Acemoglu, Daron, Introduction to Modern
Economic Growth.
Barro and Salai-i-Martin, Economic Growth
Jones and Vollrath, Introduction to Economic Growth [Advanced Undergraduate Level]
Jones and Vollrath, Introduction to Economic Growth [Advanced Undergraduate Level]
International Trade
Advanced International Trade: Theory and
Evidence by Robert C. Feenstra
Lectures on International Trade by
Jagdish N. Bhagwati and Arvind Panagariya
Econometrics
Econometric Analysis by William H.
Greene
Econometrics by Fumio Hayashi
Mastering 'Metrics: The Path from Cause to
Effect by Joshua D. Angrist and Jörn-Steffen Pischke
Economic Development
Development Macroeconomics by
Pierre-Richard Agénor and Peter J. Montiel
Open Economy Macroeconomics in Developing
Countries by Carlos A. Végh
Development Economics: Theory and Practice
by Alain de Janvry and Elisabeth Sadoulet
Development Economics by Debraj Ray
Economic Policy and Political Economy
Economic Policy: Theory and Practice by
Agnès Bénassy-Quéré and Benoît Coeuré
International Political Economy: Perspectives on
Global Power and Wealth by Jeffry A. Frieden and David A. Lake
Mathematical Economics
Essential Mathematics for Economic Analysis
by Knut Sydsaeter, Peter Hammond, Arne Strom and Andrés Carvajal
Further Mathematics for Economic Analysis by Knut Sydsaeter,
Peter Hammond, Atle Seierstad and Arne Strom
Economic Dynamics in Discrete Time by
Jianjun Miao
Mathematics for Economists by Carl P.
Simon and Lawrence E. Blume
Finance/Financial Economics
Finance and Financial Intermediation: A Modern
Treatment of Money, Credit, and Banking by Harold L. Cole
International Financial Management by Geert
Bekaert and Robert Hodrick
Quantitative Financial Economics: Stocks, Bonds and Foreign Exchange by
Keith Cuthbertson and Dirk Nitzsche
Financial Decisions and Markets: A Course in Asset Pricing by
John Y. Campbell
Asset Pricing by John H. Cochrane
Principles of Financial Engineering by
Robert Kosowski and Salih N. Neftci
Rumors and Violence – The Downside of Social Media
Rumors on Facebook instigate violence and ethnic/religious
tensions in the developing world:
Related:
The 2018 Clark Medalist
MIT economist Parag Pathak wins the 2018
John Bates Clark Award (granted annually by the American Economic
Association to the best economist under the age of 40):
Update:
Update:
Friday, April 20, 2018
Inequality and Growth
Related: Politics and Inequality
https://promarket.org/democracy-fails-reduce-inequality-blame-brahmin-left/US vs. Canada – Attracting Immigrant Tech Workers
Bloomberg
BusinessWeek on skilled immigrant workers in the tech area:
Federal Reserve and Inflation
Fed Will Accept a
Recession Before It Allows High Inflation
Related:
The FOMC: Inflation
Theory and Inflation Control
A Good Pick for Fed Vice Chairman
Thursday, April 19, 2018
Dollar and Exorbitant Privilege
The Dollar's
'Exorbitant Privilege' Is a Terrible Thing to Waste
Related:
Wednesday, April 18, 2018
Gender Imbalances - Long-Term Consequences
Highly skewed sex ratios create problems in India and China
https://www.washingtonpost.com/graphics/2018/world/too-many-men/
https://www.washingtonpost.com/graphics/2018/world/too-many-men/
Tuesday, April 17, 2018
The Monsoon and the Indian Economy
India’s All-Important Monsoon Season
--
Indian Agriculture - Challenges
--
Indian Agriculture - Challenges
Monday, April 16, 2018
Sunday, April 15, 2018
Economic Development – Latin America
Peru’s Development Folly
Venezuela’s Economic Collapse
Colombia Update
Friday, April 13, 2018
Uncertainty and Financial Markets
Interesting analysis of risk and uncertainty:
“Pundits say
markets hate “uncertainty.” That is true, but not very helpful. What kind of
uncertainty? After all, the world is always an uncertain place. Some types of
uncertainty are linear and finite. For example, there’s always a lot of angst
leading up to the monthly jobs report, as debate rages whether the number will
exceed or miss estimates. But the point is that the number will be released,
the market will quickly reprice, and the uncertainty will pass.
Other types of
uncertainty are open-ended. …
The stock market
engages in what I like to call catastrophic thinking. Presented with any risk,
it immediately imagines the worst-case scenario and quickly discounts it, which
in market parlance means pricing it in. This is what is happening with trade
and protectionism. The threat of protectionism is the No. 1 driver of the
downturn in equity markets because it’s such an open-ended risk”
Thursday, April 12, 2018
Higher Interest Rates and Risk of a Debt Crisis
Could the Fed Set Off a Debt Bomb?
Satyajit Das notes:
“Rising rates seem
like a valedictory return to “normality” -- a marker of how successful the
central banks’ heroic actions to counter the Great Recession were. What the
celebration misses, though, is how swelling levels of debt will amplify the
effect of any rate rises.
According to the
Institute of International Finance, global debt reached a record $237 trillion
in 2017 -- more than 327 percent of global GDP. Since 2007, when borrowing
levels were a key factor in the financial crisis, debt has increased by $68
trillion, or more than 50 percent of global GDP.
In developed
markets, the ratio of debt-to-GDP is around 380 percent. In emerging markets,
the ratio is above 200 percent. While the rate of growth has slowed, this is
only because of higher GDP growth -- driven, in part, by increased borrowing. A
decade of unprecedently low global rates and abundant liquidity appears to have
encouraged a spree of public and private debt accumulation.”
Related:
Flattening Yield Curve and the Fed:
https://www.bloomberg.com/view/articles/2018-04-12/flattening-yield-curve-is-sending-message-about-fed-s-rate-plans
Related:
Flattening Yield Curve and the Fed:
https://www.bloomberg.com/view/articles/2018-04-12/flattening-yield-curve-is-sending-message-about-fed-s-rate-plans
Tuesday, April 10, 2018
America’s Surprisingly Low Labor Force Participation Rates
Mary C. Daly (Director of Research in the Economic
Research Department of the Federal Reserve Bank of San Francisco) notes:
“Labor force
participation in the United States for prime-age workers reached a peak in the
late 1990s and then took a steep dive in the 2001 recession. In the 2007
recession, it took an even steeper tumble, reaching a low point in 2015, nearly
eight years after the initial downturn. While we have seen improvements since,
they have been modest. So today, the share of men and women in their prime
working years who are employed or actively searching for a job is far lower
than it was in the 1990s. What’s really interesting in these data is that, unlike
the trends for retirement and fertility, this one is unique to the United
States. We don’t see the same thing happening in other advanced economies. …
Although the share
of young people with four-year college degrees is rising, in 2016 only 37% of
25- to 29-year-olds had a college diploma (Snyder, de Brey, and Dillow 2018).
This falls short of the progress in many of our international competitors (OECD
2018), but also means that many of our young people are underprepared for the
jobs in our economy.”
Saturday, April 7, 2018
Consolidation in the US Healthcare Sector
Rapid consolidation is changing the US healthcare system
https://www.nytimes.com/2018/04/07/health/health-care-mergers-doctors.html
Related: Cure for High Healthcare Costs
https://www.nytimes.com/2018/04/07/health/health-care-mergers-doctors.html
Related: Cure for High Healthcare Costs
Brad De Long on Globalization – MUST READ
UC Berkeley macroeconomist Brad De Long on Globalization:
When Globalization Is Public Enemy Number
One
http://www.milkenreview.org/articles/when-globalization-is-public-enemy-number-one
Related:
Related:
Recent US Manufacturing Employment: The Exception that Proves the Rule
https://piie.com/system/files/documents/wp17-12.pdfUS and Global Economic Outlook
Federal Reserve Chairman Jerome Powell on the Outlook
for the US Economy
Life After the Global Economy's Synchronized
Upswing
US Equities – Performance Since the Tax Cut
Economic impact of Tariffs - FRB Dallas study on tariff impact:
Friday, April 6, 2018
Federal Reserve – Monetary Policy Implementation in the Post-QE Era
Related:
Interest Rate Control Is More Complicated
Than You Thought
International Political Economy and Trade Wars
U.S. Needs China More Than China Needs the
U.S.
https://www.bloomberg.com/view/articles/2018-04-06/trump-s-tariffs-overlook-how-much-u-s-needs-china
Trade Wars in a Winner-Take-All World
High Tariffs on Chinese Imports Would Weaken
America
Nobel Laureate Paul Krugman on US-China Trade Squabble
Nobel Laureate Joeseph Stiglitz notes:
“Even if Trump had
no economists advising him, he would have to realize that what matters is the
multilateral trade deficit, not bilateral trade deficits with any one country.
Reducing imports from China will not create jobs in the US. Rather, it will
increase prices for ordinary Americans and create jobs in Bangladesh, Vietnam,
or any other country that steps in to replace the imports that previously came
from China. In the few instances where manufacturing does return to the US, it
will probably not create jobs in the old Rust Belt. Instead, the goods are
likely to be produced by robots, which are as likely to be located in high-tech
centers as elsewhere.”
Wednesday, April 4, 2018
Economic Misconceptions Regarding International Trade
Five Reasons Why the Focus on Trade Deficits Is
Misleading
Trump's Trade Chief Makes a Rookie Mistake
Are Trade Deficits a Drag on U.S. Economic
Growth?
https://object.cato.org/sites/cato.org/files/pubs/pdf/FTB-027.pdf
China responds to US protectionist measures:
https://www.reuters.com/article/us-usa-trade-china/china-vows-countermeasures-as-u-s-issues-extensive-tariff-list-idUSKCN1HB0G6
Trade Is Not a Job Killer by Donald J. Boudreaux
https://www.nytimes.com/2018/03/28/opinion/trump-tariffs-trade-war.html
Fake Economic Theories
https://www.bloomberg.com/view/articles/2018-04-04/fake-economic-theories-sell-better-than-real-ones
Fact versus Fiction – Irrelevance of Bilateral Trade Figures
in the Era of Global Supply Chains
In the era of global supply chains, traditional trade
figures are increasingly meaningless
---
RISK OF A TRADE WAR:
https://www.reuters.com/article/us-usa-trade-china/china-vows-countermeasures-as-u-s-issues-extensive-tariff-list-idUSKCN1HB0G6
America’s muddled trade strategy
Tuesday, April 3, 2018
How Humans Learn
How babies learn –
and why robots can’t compete
Alex Beard notes:
“Until recently,
scientists had tended to think of infants as irrational, illogical and
egocentric. … This understanding had contributed to a mechanistic view of
learning, and the idea that the sheer repetition of words was what mattered
most. But it wasn’t true.
Even in utero,
babies are learning. At that stage, they pick up sounds. One-hour-olds can
distinguish their mother’s voice from another person’s. They arrive in the
world with a brain primed to learn through sensory stimulation. …
“We enter the world
ready to ‘read the perfect cues out of the environment’,” said Hirsh-Pasek. I
thought back to Toco. He read the environment, too – or at least what his eye
cameras saw and ear microphones heard. But robots can only reach out in ways
they have been programmed to, can only learn from stimuli they were instructed
to pay attention to. It limits them to a small range of experiences that would
shape their behaviours. There is no meaning in their methods. Babies, on the
other hand, are social learners.”
Williams to Head the New York Fed
Monetary economist John Williams will head the Federal
Reserve Bank of New York:
A recent speech by John Williams:
Expecting the Expected: Staying Calm When the Data
Meet the Forecasts
https://www.frbsf.org/economic-research/publications/economic-letter/2018/february/expect-expected-staying-calm-when-data-meet-forecasts-speech/el2018-03.pdfMonday, April 2, 2018
Bad Policies are Beginning to Affect the US Economy
U.S. Stocks Would Bear the Brunt of a Trade
War
https://www.bloomberg.com/view/articles/2018-04-02/stocks-bear-the-brunt-if-trump-sparks-a-trade-war
Tariffs push up input costs
Fresh shockwaves hit U.S. markets after
Trump tweets, China steps up trade war
Sunday, April 1, 2018
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