Some people are getting a little spooked by recent stock market movements. Here I offer a few thoughts.
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Perspective on the stock market
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Wisconsin GDP ex-Madison ex-Milwaukee
Robin Vos has suggested Wisconsin would be much more Republican (hence “better”) without Madison and Milwaukee. I wondered what an ex-Madison and ex-Milwaukee Wisconsin economic output would look like. Here’s the picture.
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The 1990-91 Recession
The NBER BCDC memo and the data.
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14 Months, 8 Months, 16 Months
That’s the amount of time between 10 year-3 month yield curve inversions and the beginning of the subsequent NBER-dated recession (these are the three recessions in the Great Moderation period). This is shown in Figure 1.
Up, Up and Away
Economic Policy Uncertainty, 5 December 2018:
Scott Walker’s Parting Gift to Wisconsin
A shrinking economy.
Measuring monetary policy shocks
What are the effects on the economy when the Fed raises interest rates? This is a key question in empirical research, but is notoriously hard to answer. The reason is that when the Fed raises interest rates, it usually does so in anticipation of a stronger economy or rising inflation. If we look at what happens to inflation or output following an interest rate hike, it is impossible to distinguish the effect of the Fed’s actions from the effects of the changing fundamentals that led the Fed to act in the first place. New research by a graduate student at UCSD may have finally solved this problem.
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Wisconsin in Washington (the College Fed Challenge)
The University of Wisconsin’s Department of Economics was represented at the Federal Reserve System’s national Fed Challenge competition, this last Thursday. Wisconsin participated, after prevailing in the Chicago region’s competition.
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US Gets China to Agree to What It Was Going to Do Anyway
From NYT:
In a significant concession, Mr. Trump will postpone a plan to raise tariffs on $200 billion worth of Chinese goods to 25 percent, from 10 percent, on Jan. 1. The Chinese agreed to an unspecified increase in their purchases of American industrial, energy and agricultural products, which Beijing hit with retaliatory tariffs after Mr. Trump targeted everything from steel to consumer electronics.
Guest Contribution: “What are the drivers of TFP growth? An empirical assessment “
Today, we are pleased to present a guest contribution written by Iván Kataryniuk (Banco de España) and Jaime Martínez-Martín (European Central Bank) summarizing their chapter in the book International Macroeconomics in the wake of the Global Financial Crisis edited by L. Ferrara, I. Hernando and D. Marconi. The views expressed here are those solely of the author and do not reflect those of their respective institutions.
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