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The WSJ April Survey: Accelerating Growth Prospects

The survey results are out, and once again, the outlook improves. Figure 1: GDP actual (bold black), WSJ April survey mean (blue), February (red), December (green), October (light blue), CBO estimate of potential GDP (gray), all in billions Ch.2012$, on log scale. Forecasted levels calculated […]

When (US) Corporate Tax Rates Reductions Last Bloomed

Under the Tax Cuts and Jobs Act, no enormous surge in capital investment appeared. From the conclusion to U.S. Investment Since the Tax Cuts and Jobs Act of 2017, by Emanuel Kopp, Daniel Leigh, Susanna Mursula, and Suchanan Tambunlertchai. In the year following the passage […]

The Trade Balance: Macro Dominates Tariffs

Like I said four years ago. By Trump’s own criterion, the trade war was lost. My view – that was a stupid criterion in any case. Figure 1: Annualized trade balance (billions $, SAAR) (blue, left scale), and trade balance to (interpolated) GDP ratio (red, […]

The Market’s Expectations of Inflation over the Next Five Years

As of today, the five year constant maturity Treasury yield has stabilized for the last month at about 0.9%. The inflation breakeven implied by the spread between Treasurys and TIPS has plateaued at 2.52%. After accounting for the estimated term premium and liquidity premium, the […]

“Re-examining the Effects of Trading with China on Local Labor Markets: A Supply Chain Perspective”

From the paper by Zhi Wang, Shang-Jin Wei, Xinding Yu & Kunfu Zhu: The United States imports intermediate inputs from China, helping downstream US firms to expand employment. Using a cross-regional reduced-form specification but differing from the existing literature, this paper (a) incorporates a supply […]

Infrastructure Investment and Taxes

I talked about infrastructure investment and taxes on WPR today. Will higher corporate tax rates and closing of loopholes in the taxation of raise prices of goods produced? Given what happened in the wake of the 2017 reduction in corporate tax rates (i.e., lots of […]

Employment Surges to 5.5% below Feb 2020

The economy added 916,000 jobs in March, above the Bloomberg consensus of 647,000. Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 4/1 for March nonfarm payroll employment (light blue square), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and […]

Business Cycle Indicators at the Beginning of April

The Bloomberg consensus is for an increase of 674 thousand jobs in March. That’s heady news, offsetting the somewhat less upbeat news from the estimate of February monthly GDP released by IHS Markit today – a decrease of 0.9% after upward revision in January’s figure […]

Did the Lockdown Cause More Suicides?

A common assertion made by those opposed to public health measures such as lockdowns was that suicides were rising markedly – see e.g., Carney/Washington Examiner via AEI, Arthur Laffer and Stephen Moore, and blog commenters like sammy. The data are in. This article indicates suicides […]

On the Economic Outlook and More

Three quarters of an hour of me talking on the UW Department of Political Science’s 1050 Bascom Podcast, on “insights into how Covid-19 has impacted the US economy as well as international finance and global trade — and what the future might hold.” Original Article