Economy / Finance

Trump's Deficit-Cutting Plan Isn't Realistic

May 27 12:18am Barron's Economic Beat
Growth assumptions are unlikely to be met, especially if the administration imposes rules that would hurt trade.
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Kansas GDP Growth Nil

May 26 8:09pm Econbrowser
Quarterly GDP figures for Kansas indicate essentially zero q/q growth in 2016Q4, and 0.3\% y/y. This is true despite the end of the drought. BEA Plains region growth outpaces Kansas, as well. Figure 1: Kansas real GDP, in millions Ch.2009$, SAAR ( blue, left log scale), and Kansas Palmer Drought Severity Index (red, right index); […]...
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China vs the Trilemma, Price Level Path, Balance Sheet Confusion, and FOMC Debates

May 26 7:34pm Macro and Other Market Musings
Here are some assorted macro musings from the past week:1.  Been there, done that, and it did not end well China edition. Once again, China forgets there is a macroeconomic trilemma. From the Wall Street Journal:China’s central bank is effectively anchoring the yuan to the dollar, a policy twist that has helped stabilize the currency in a year of political transition and market jitters about China’s economic management.... The newfound tranquility may not last: The focus seen in recent weeks on stability against the dollar, whether it goes up or down, means pressure on the yuan to weaken could get dangerously bottled up, potentially bring bouts of sharp devaluation.Pegging an exchange rate, tinkering with domestic monetary policy, and allowing some capital flows can be a dangerous game to play. Chinese officials should stare long and hard at the picture below and recall how by ignoring it they created a crisis back 2015. 2. St. Louis Fed President James Bullard notices the U.S. economy is falling off of its trend price level path in a recent speech.3. George Selgin  says the FOMC plans to shrink its balance sheet is seriously confused:In short, the Fed’s normalization plan calls for it to prop-up banks’ demand for cash, as a prelude to reducing the supply of cash! That means tightening and more tightening. The rub, of course, is that conditions may never justify so much tightening. What's more, no plan for Fed normalization can work that would prevent the Fed from meeting its overarching inflation and employment targets.4. Peter Ireland on what we can learn from the FOMC debates as seen in the latest minutes. Among other things, Peter notes the following:Digging into the details of the FOMC’s debate reminds us, as well, of important lessons from economy history. Participants who warn that low unemployment today raises the risk of higher inflation in the future are organizing their thoughts around the idea of the Phillips curve, which describes an inverse relation between those two variables. One lesson from history, however, is that while data do often support the existence of a statistical Phillips curve, its fit is not nearly strong enough to serve as a fully reliable guide for monetary policymaking. The limitations of the Phillips curve approach became clear, for example, during the 1970s, when chronically high unem...
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Q1-2017s Profits and Sales, as well as Aprils Orders and Shipments, Say No to a Higher than 2.5% 10-year Treasury Yield During the Rest of 2017

May 26 6:34pm Credit Trends from Moody's Analytics
Q1-2017’s profits from current production shrank sequentially as the metric’s year-to-year increase slowed from Q4-2016’s +9.3\% to Q1-2017’s 3.7\%.
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Why China's Latest Growth Scare Should Worry You

May 26 3:35pm Economy - Investor's Business Daily
When China's economy slows, Beijing usually responds with overpowering fiscal stimulus and monetary fuel. Here's why this time may be different.
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Economic Roundup: Wage Revisions Steal Spotlight From U.S. GDP

May 26 3:34pm Credit Trends from Moody's Analytics
Downward revision to Q4 wages makes us increasingly concerned about consumer spending.
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Future Development Reads: Impact investing, impact sourcing, and international development

May 26 2:41pm Brookings Topics - Economic Development
With aid money getting scarcer, official development agencies are reluctantly recognizing what should have been obvious all along: private investors are the most important actors in development.  Steps to improve the investment climate and remove obstacles to markets should rise to the top of the development agenda. There will also be more initiatives to cajole…         ...
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Africa in the news: South Sudans ceasefire, Tanzanian mining sectors audit, and Macrons Mali visit

May 26 11:22am Brookings Topics - Economic Development
South Sudan’s government announces unilateral ceasefire during national dialogue South Sudanese President Salva Kiir formally launched a national dialogue on Monday, May 22, aiming to end the country’s three-year civil war. Kiir also called for the release of political prisoners, as well as a unilateral ceasefire—although he maintained that government soldiers have the right to…         ...
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A New Mankiw Publication

May 26 10:08am Greg Mankiw
This one I am particularly proud of, though I cannot claim to fully understand it.
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No win-wins in Kenyas modern-day voyages in search of work

May 26 9:58am Brookings Topics - Economic Development
For centuries, people and merchandise have traversed the Indian Ocean, giving life to economic and cultural exchanges between the people of the East African Coast and the Gulf. This set in motion inter-cultural encounters and the formation of diaspora communities. Fast forward to today, and a considerable portion of the Middle East’s surging migrant population…         ...
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Protectionists are Masters of Legerdemain

May 26 8:38am Cafe Hayek
TweetHere’s a letter to the Wall Street Journal: Commerce secretary Wilbur Ross writes that “because American auto tariffs are so much lower than those of other countries, the only way U.S. trade negotiators can get trading partners to reduce their tariffs is by giving concessions against other U.S. industries.  This, then, requires the government to […] The post Protectionists are Masters of Legerdemain appeared first on Cafe Hayek.
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The Trump era: New trends in Sino-U.S. economics and trade

May 26 3:27am Brookings Topics - U.S. Economic Performance
Through the OBOR initiative and the AIIB, China’s economic leadership in the world is expanding both regionally and internationally. At the same time, pulling the U.S. out of the TPP was a major part of Donald Trump’s campaign, a strategy that he has pursued thus far in his presidency. After the Xi-Trump Summit in Mar-A-Lago,…        ...
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Stocks Rise to New Highs Despite Possible Demise of Tax Reform and Infrastructure Spending

May 25 8:34pm Credit Trends from Moody's Analytics
A destabilizing jump by interest rates will not impart a multi-year blow to share prices if it occurs in the context of profits growth.
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Bank bail-in: The effects on credit supply and real economy

May 25 8:00pm VoxEU.org: Recent Articles
The new resolution and bail-in regime in Europe hypothetically lets banks fail without resorting to public funding. This column examines the effects of the bail-in of the Portuguese Banco Espírito Santo. Existing borrowers from the banks exposed to the bail-in experienced a negative impact on their credit supply from these banks, but were able to compensate with increased borrowing from other, less-exposed banks. Nevertheless, the bail-in had negative real economy consequences with affected firms reducing investment and employment, while increasing precautionary cash holdings.
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Economic Roundup: Complement or Substitute for Managing Fed Funds Rate?

May 25 5:34pm Credit Trends from Moody's Analytics
We view the Fed’s balance sheet policy as an adjunct to, rather than a substitute for, rate hikes.
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How Markets Work

May 25 3:16pm The Baseline Scenario
By James Kwak The Congressional Budget Office’s assessment of the Republican health care plan, as passed in the House, is out. The bottom line is that many more people will lack health coverage than under current law—23 million by 2026—even though … Continue reading →...
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Figures of the week: Entrepreneurship and industrialization in Africa

May 25 3:07pm Brookings Topics - Economic Development
This week, from May 22 to 26, the African Development Bank Group (AfDB) is holding its 52nd annual meetings in Ahmedabad, India on the theme of “Transforming Agriculture for Wealth Creation in Africa.” India’s partnership with the AfDB spans over 30 years, and India has notably expanded its economic ties with sub-Saharan Africa recently—although it…        ...
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A new code aims to clean up the foreign-exchange market

May 25 10:49am Economics
FINANCIAL-MARKET traders have earned a pretty shocking reputation in recent years. From manipulating LIBOR, a benchmark interest rate, to rigging the daily fix of foreign-exchange (FX) rates, traders have shown themselves ready not just to stretch the rules, but to collude in outright illegality.A global code of conduct for the FX market, unveiled on May 25th, aims to put things on a sounder footing. Drawn up over the past two years by a coalition of central bankers, known as the FX Working Group (FXWG), and supported by a panel of industry participants, the code’s 55 principles lay down international standards on a range of practices, from the handling of confidential information to the pricing and settlement of deals.Such standards seem long overdue in the massive FX market. Roughly $5trn is traded every day (see chart). Many companies, pension funds and money managers depend on banks to hedge their exposure to currency fluctuations. Yet in the past traders colluded with one another...Continue reading...
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A trade deal between the EU and east Africa is in trouble

May 25 10:49am Economics
Magufuli advises Museveni on how to tilt at colonialismTHE winds that waft along the Swahili coast change direction with the seasons, a boon to traders in times past. Shifts in the political winds are harder to predict. Last July a proposed trade deal between five countries of the East African Community (EAC) and the EU was thrown into disarray when Tanzania backed out at the last minute. An EAC summit, scheduled for months ago, was meant to find a way forward. Held at last on May 20th in Dar es Salaam, after many postponements, only two presidents showed up. The deal is in the doldrums.The pact is one of seven “Economic Partnership Agreements” (EPAs) the EU wants to sign with regional groups in Africa, the Caribbean and the Pacific. The first was agreed with the Caribbean in 2008; southern Africa followed suit last year. But progress in west Africa has also stalled, with Nigeria raising objections. The EPAs were promoted as a new breed of trade deal, and...Continue reading...
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How becoming a Hong Kong pensioner can save you tax

May 25 10:49am Economics
Not dodging but shufflingTHE global war on tax evasion rumbles on. What began as an American onslaught, with the Foreign Account Tax Compliance Act (FATCA) of 2010, has been joined by more than 100 countries through an initiative called the Common Reporting Standard (CRS). Under this, governments will exchange tax information on their financial firms’ clients on a regular, “automatic” basis, without having to be asked for it, starting this year. Holdouts such as Panama, the Bahamas and Lebanon have, one by one, been frogmarched into line.But tax-dodgers and their advisers are enterprising sorts, eager to clamber through the smallest loophole—and gaps in the CRS there are. One involves becoming a pensioner in Hong Kong.The territory, home to a big financial centre, has a type of pension known as an ORS (for Occupational Retirement Scheme). The beauty of ORS from a tax evader’s point of view is that anyone can get one and they are not...Continue reading...
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Machine-learning promises to shake up large swathes of finance

May 25 10:49am Economics
MACHINE-LEARNING is beginning to shake up finance. A subset of artificial intelligence (AI) that excels at finding patterns and making predictions, it used to be the preserve of technology firms. The financial industry has jumped on the bandwagon. To cite just a few examples, “heads of machine-learning” can be found at PwC, a consultancy and auditing firm, at JP Morgan Chase, a large bank, and at Man GLG, a hedge-fund manager. From 2019, anyone seeking to become a “chartered financial analyst”, a sought-after distinction in the industry, will need AI expertise to pass his exams.Despite the scepticism of many, including, surprisingly, some “quant” hedge funds that specialise in algorithm-based trading, machine-learning is poised to have a big impact. Innovative fintech firms and a few nimble incumbents have started applying the technique to everything from fraud protection to finding new trading strategies—promising to up-end not just the humdrum drudgery of the back-office,...Continue reading...
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One bitcoin is worth twice as much as an ounce of gold

May 25 10:49am Economics
Fans of bitcoin, a crypto-currency, have long called it digital gold. Now this sounds like an insult: continuing its stellar rise, and adding more than 30\% to its value in just a week, one bitcoin is worth more than $2,600, over twice as much as an ounce of gold. As The Economist went to press all bitcoins in circulation were worth over $43bn. A sum of $1,000 invested in bitcoins in 2010 would now be worth nearly $36m. Other crypto-currencies are also marching upward: together this week they were worth $87bn. But if the history of gold is any guide, what goes up will come down—and then go up again.
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Is efficient-market theory becoming more efficient?

May 25 10:49am Economics
BUILD a better mousetrap, the saying goes, and the world will beat a path to your door. Find a way to beat the stockmarket and they will construct a high-speed railway. As investors try to achieve this goal, they draw on the work of academics. But in doing so, they are both changing the markets and the way academics understand them.The idea that financial markets are “efficient” became widespread among academics in the 1960s and 1970s. The hypothesis stated that all information relevant to an asset’s value would instantly be reflected in the price; little point, therefore, in trading on the basis of such data. What would move the price would be future information (news) which, by definition, could not be known in advance. Share prices would follow a “random walk”. Indeed, a book called “A Random Walk Down Wall Street” became a bestseller.The idea helped inspire the creation of index-trackers—funds that simply buy all the shares in a benchmark like the S&P...Continue reading...
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Noble Group, a big Asian commodities trader, is teetering

May 25 10:49am Economics
THE difficulties facing Noble Group, a beleaguered Hong Kong commodities trader, are multiplying. On May 23rd the firm was forced to suspend trading of its shares in Singapore after their value slumped by more than 28\% in half an hour. The panicked selling came after S&P Global, a ratings agency, warned that Noble was at risk of defaulting on large debt repayments that are due within the next 12 months. Investors were also rattled by reports from Reuters and the Financial Times suggesting that Sinochem, a Chinese conglomerate at one time tipped to take a stake in Noble, had lost interest in a deal.Founded in 1986 by Richard Elman, a former scrap-metal merchant from London, Noble grew from an initial investment of $100,000 to be worth more than $10bn at its peak in 2010. But investors took fright in 2015 when a previously unknown group called Iceberg Research began publishing reports questioning Noble’s accounting practices (Noble has vigorously defended its...Continue reading...
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To forecast share returns, count buy-backs as well as dividends

May 25 10:49am Economics
WHAT is the point of buying shares? Ultimately investors must hope that the cash they receive from the company will offer an attractive long-term return.Over the long run, reinvested dividends rather than capital gains have comprised the vast bulk of returns. But since the 1980s American firms have increasingly used share buy-backs, which have tax advantages for some investors. Buy-backs have been higher than dividend payments in eight of the past ten years.In a buy-back, investors receive cash for a proportion of their holdings. A new paper* in the Financial Analysts Journal argues that adding this to dividend receipts to calculate a total payout yield gives a better estimate of future returns than the dividend yield alone. It also reveals a much better match between stockmarket performance and overall economic growth.Using data going back to 1871, the authors find that the average dividend yield has been 4.5\% and the total payout yield 4.89\%. Since 1970 the dividend yield has dropped to 3.03\%, but the total payout yield has averaged 4.26\%. Looked at on that basis, the overall income return from shares has been not that far below historical levels.The return from shares can be broken down into three components: the initial income yield; growth in the income stream; and any change in valuation. (If shares become more...Continue reading...
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What the German economic model can teach Emmanuel Macron

May 25 10:49am Economics
IT IS heartening that the euro area has a knack for surviving near-fatal crises. Yet confidence in the durability of the single currency might be stronger if it suffered fewer of them. Europe dodged its latest bullet on May 7th in France, when Emmanuel Macron, a liberal-minded (by local standards) upstart centrist, defeated Marine Le Pen for the presidency. Even so, an avowed nationalist and Eurosceptic captured 34\% of the vote, leaving Mr Macron with five years to assuage widespread frustration with the economic status quo. An obvious model lies just across the Rhine, where the unemployment rate—below 4\%, down from over 11\% in 2005—is testimony to the potential for swift, dramatic change. Yet Germany’s performance will not be easy to duplicate.It would be unfair to call France the sick man of Europe; half the continent is wheezing or limping. Yet there is certainly room for French improvement. Real output per person has barely risen in the past decade. Government spending stands at 57\% of GDP, outstripping the tax take; France’s budget deficit, at 3.4\% of GDP, is among the largest in the euro area’s core. The biggest worry, however, is the labour market. The unemployment rate, now 10.1\%, is stubbornly high. Nearly a quarter of French young adults are unemployed. Worklessness, especially among young people, is a source of rising social tension and a...Continue reading...
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Marshall, Merkel, and Africa

May 25 10:27am Brookings Topics - Economic Development
Earlier this year, Germany unveiled its Marshall Plan with Africa, which it will promote during its chairmanship of the G-20. Given the historic success of the original Marshall Plan and to avoid raising expectations that will not be met, the authors would be better off calling this development strategy the “Merkel Plan to increase investment…         ...
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The lamppost theory: Why economic policy so often comes up short

May 25 10:17am Brookings Topics - Fiscal Policy
At a moment when the Trump administration has relegated economists to the back rows, it’s a good time to ask why economists don’t have more influence on politicians, and why politicians find economists so frustrating. Visiting scholar Alan Blinder argues that politicians use economics the way a drunk uses a lamppost—for support, not for illumination. Blinder…         ...
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Resources Are Scarce In All Cases

May 25 5:52am Cafe Hayek
TweetHere I elaborate on this post in which I argue that, if you understand that cutting the funding for a government program results in a scaling-back of that government program, then you should also understand that raising the minimum wage has the same effect on the operations of employers of low-skilled workers. The obstacle to […] The post Resources Are Scarce In All Cases appeared first on Cafe Hayek.
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Tigers, Tiger Cubs and Economic Growth

May 25 5:30am On the Economy blog
Economic growth of East Asia can be seen by dividing countries into three distinct groups.
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Gauging globalisation

May 24 8:00pm VoxEU.org: Recent Articles
The economic effects of foreign direct investment are generally expected to be positive for the host economy. However, this is usually conditional on certain thresholds of development being met, for instance in terms of human capital or institutional quality. This column argues that the economic impact of foreign direct investment is less ‘conditional’ than commonly thought, perhaps because below the thresholds, the difference between private and social returns is substantial, while above them it is smaller.
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Growth, import dependence, and war

May 24 8:00pm VoxEU.org: Recent Articles
Classical models suggest that shifts in the balance of power can lead to conflict, where the established power has the incentive to trigger war to deter the threat to its dominance. This column argues that this changes if international trade is taken into account. Industrialisation requires the import of natural resources, potentially leading a smaller nation to trigger war either against a resource-rich country or the incumbent nation. The model can help explain the US-Japanese conflict of 1941 and Hitler’s invasion of Poland, and has implications for US-Chinese relations today.
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The puzzle of high policy uncertainty and low market volatility

May 24 8:00pm VoxEU.org: Recent Articles
Since 2000, political uncertainty has had a strong influence on market volatility in the US. Since Donald Trump became president, however, high policy uncertainty has not translated into high market volatility. Building on a theoretical framework linking stock prices and political news, this column argues that the US market does not respond to political uncertainty because political news coming from the new administration has been unreliable and difficult for investors to interpret. ...
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Welfare: Savings not taxation

May 24 8:00pm VoxEU.org: Recent Articles
The future of publicly funded welfare states is in doubt as costs trend upward, yet there is little agreement about the shape of the necessary reforms. This column uses the case of New Zealand to show how tax cuts can be designed to establish compulsory savings accounts so that a publicly funded welfare system can be changed into one that relies largely on private funding. Transparent pricing of services can be introduced, offering the potential for efficiency gains. The government retains sufficient revenues to act as ‘insurer of last resort’ for those individuals unable to meet welfare expenses out of their savings accounts.
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Market Still Sees Fed Funds Midpoint At 1.125% by Years End

May 24 6:34pm Credit Trends from Moody's Analytics
the futures market now assigns only a 46\% likelihood to a greater than 1.125\% midpoint for fed funds following the FOMC’s final meeting for 2017 that is scheduled for December 13.
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Coverage Implications of the Revised AHCA

May 24 6:18pm Econbrowser
From today’s CBO score of the AHCA, bottom line, 14 million more uninsured next year, and 23 million more by 2026. CBO and JCT broadly define private health insurance coverage as consisting of a comprehensive major medical policy that, at a minimum, covers high-cost medical events and various services, including those provided by physicians and […]...
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Economic Roundup: Fed Getting Its Ducks in a Row

May 24 5:35pm Credit Trends from Moody's Analytics
Minutes show the central bank plans how, but not when, to begin normalizing its balance sheet.
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Hutchins Roundup: Minimum wage, debt limits, and more

May 24 5:30pm Brookings Topics - U.S. Economic Performance
Studies in this week’s Hutchins Roundup find that minimum wage increases do not pass through to prices, US debt limit impasses in Congress raise the cost of borrowing for the federal government, and more. Want to receive the Hutchins Roundup as an email? Sign up here to get it in your inbox every Thursday. Minimum…        ...
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Questions for Those Who Obsess Over Income Differences

May 24 2:43pm Cafe Hayek
TweetIn my latest column in the Pittsburgh Tribune-Review I pose some questions to those people who obsess over differences across individuals or households in incomes. A slice: • What, exactly, counts as income? Only what workers receive as take-home pay? Or does it include also the value of fringe benefits? What about the value to […] The post Questions for Those Who Obsess Over Income Differences appeared first on Cafe Hayek.
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Exclusionary zoning is opportunity hoarding by upper middle class

May 24 12:08pm Brookings Topics - Housing and Mortgage Markets
One of the great advantages of the United States has, at least historically, been the nation’s sheer scale. With almost four million square miles of territory, there has almost always been somewhere to go to find land, or at least a living. But the economic geography of the nation has shifted. Productive activity is increasingly…         ...
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Donald Trumps budget ignores what is ailing American workers

May 24 10:47am Economics
PRESIDENTIAL budget requests are worth exactly nothing. They carry no force of legislation. They land, heavy, bound and shrink-wrapped, so they can be immediately binned as Congress continues its now yearly stumble toward a “continuing resolution”—a supposedly temporary legislative act that in recent decades has almost entirely replaced the statutory budget process. The request from the President is the least consequential part of something that is completely broken. It functions like a bumper sticker on an old car. It only tells you about the person who’s driving. Mick Mulvaney, a former congressman from South Carolina who won his seat in the Tea-Party wave of 2010, runs Donald Trump’s Office of Management and Budget. Mr Mulvaney has created the budget his wing of the Republican party always wanted: government as a service, paid for by its clients, the taxpayers. If you receive more than you pay, the system has failed, and must be fixed. The marketing copy that accompanied the budget calls this “respect for people...Continue reading...
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A note from the World Economic Forum on Africa in Durban

May 24 10:24am Brookings Topics - Economic Development
Earlier this month, more than 1,000 leaders from business, government, and civil society participated in the World Economic Forum on Africa in Durban in early May with the theme, “Achieving Inclusive Growth through Responsive and Responsible Leadership.” This note highlights several conversations relevant to the forum’s theme. The leadership challenge The challenge of responsible leadership…         ...
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How tax rates influence the migration of superstar inventors

May 24 9:11am Microeconomic Insights
This paper shows that taxes affect the international location decisions of the best “superstar” inventors. Higher tax rates lead to a significantly lower share of superstar inventors remaining in their home country and a lower share of foreign superstar inventors who move to the country. This may have significant fiscal and innovation costs for a country that should be taken into account when setting tax policy. The post How tax rates influence the migration of superstar inventors appeared first on Microeconomic Insights.
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How The Fed Could Spook Markets, Bank Stocks Today

May 24 8:00am Economy - Investor's Business Daily
The Federal Reserve releases May meeting minutes Wednesday. The central bank could signal a move toward paring its huge massive balance sheet. Early hints in the March meeting minutes spooked investors in April.
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Allergies are even worse than you think

May 24 7:00am The Incidental Economist
The following originally appeared on The Upshot (copyright 2017, The New York Times Company) This is the time of year my kids and I have seasonal allergic rhinitis, better known as hay fever. I’d always thought it was merely a nuisance, but it turns out it also degrades cognitive performance, at least a little. Hay fever affects […]...
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Tooth Fairies and Ludicrous Supply-Side Economics

May 23 11:54pm Econbrowser
That’s how Larry Summers described the growth forecasts underpinning the Trump budget released today. And I can’t really disagree, regarding the medium to longer term forecasts. From the article: Apparently, the budget forecasts that U.S. economic growth will rise to 3.0 percent because of the administration’s policies — largely its tax cuts and perhaps also […]...
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Some reflections on Japanese monetary policy

May 23 8:30pm Ben Bernanke's Blog
Over the years, I’ve done a lot thinking and writing about challenges faced by Japanese monetary policymakers in their attempts to combat deflation. In some of my earlier pieces I argued that, if the Bank of Japan (BOJ) showed more resolve, it could readily overcome these problems. But, in recent years, the Bank has shown…...
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Financial integration in the Eurozone should not be a tough sell

May 23 8:00pm VoxEU.org: Recent Articles
Much progress has been made in recent years to improve the financial integration of the Eurozone.  This column argues that while banking union promotes stability, markets remain fragmented and consumers aren’t yet fully enjoying the fruits of integration. With Brexit on the horizon, it is up to the remaining EU member states to foster competition and efficiency in financial services by completing the banking union, harmonising national regulation, and accelerating the realisation of a true capital markets union. ...
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Risk-based capital requirements and corporate lending

May 23 8:00pm VoxEU.org: Recent Articles
Bank risk-weighted assets differ significantly across banks. Using a unique database covering Europe’s top 50 banking groups, this column argues that national segmentations explain a significant (albeit decreasing) share of this variability. Furthermore, institutions that rely more heavily on the internal ratings-based approach have reduced more (or increased less) their corporate loan portfolio. This effect is somewhat stronger for banks located in Eurozone periphery countries during the 2010-12 sovereign crisis.
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Economic Roundup: Color Us Skeptical

May 23 6:34pm Credit Trends from Moody's Analytics
Economic assumptions in Trump's budget seem too rosy.
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M&A Tops Capital Spending since June 2014

May 23 6:34pm Credit Trends from Moody's Analytics
Refinancings offer the best way of explaining the profound discrepancy between the marked deceleration by C&I loans outstanding and the pronounced acceleration by the gross amount of newly rated bank loan programs from high-yield companies...
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Trucking And Blue-Collar Woes

May 23 5:11pm Paul Krugman
Neither trade nor technology, but politics.
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Do You See What I See?

May 23 3:11pm Cafe Hayek
TweetChampions of keeping markets free and government limited typically have a solid grasp of economics.  The same cannot remotely be said of the people who run the oddly named “Americans for Limited Government.”  Here’s yet another letter to the president (Rick Manning) of that organization: You say today in your now-daily e-mail plea for Trump […] The post Do You See What I See? appeared first on Cafe Hayek.
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Treasury's Mnuchin on tax reform: 'Our objective is to get it done this year'

May 23 11:15am Economy
Mnuchin said the Trump administration hopes to pass a plan to overhaul the U.S. tax system by the end of the year.
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The Ive paid in all my life fallacy

May 23 9:40am Economics
SOCIAL security is often described as the “third rail” of American politics—touch it and you die. Britain’s prime minister has just tied herself into a tangle over the way to fund long-term care for the elderly.The problem is made more difficult because of the way that such benefit schemes were established and marketed to the public—as insurance schemes in which what you receive in benefits relates to what you put in. When pension schemes were set up by Franklin Roosevelt (pictured, left) in the 1930s or in Britain, by David Lloyd George (pictured, right) in the Edwardian era, the insurance notion was something people could easily grasp (private schemes already existed) and could be seen as fair. This was fine in the early years of such schemes when the number of people contributing was far greater than the number of people taking benefits. But as our societies age, the costs rise and the inadequacy of...Continue reading...
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Why Didn't Bank Regulators Prevent the Financial Crisis?

May 23 5:30am On the Economy blog
While many saw the exuberance of the housing market, other contributing factors led to a “perfect storm” making it tough to foresee the impending meltdown.
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Spec-Grade Bond Yields and Spreads Are Better at Explaining Bank Loan Supply than Bond Issuance

May 22 9:46pm Credit Trends from Moody's Analytics
A further broad-based recovery by share prices and the continuation of historically low readings for the VIX index would buttress systemic liquidity to the benefit of corporate credit quality.
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Economic Roundup: More Evidence U.S. Economy Will Bounce Back in Q2

May 22 8:17pm Credit Trends from Moody's Analytics
Weakness in the first quarter was temporary, but we are watching C&I lending.
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How university admissions can help integrate secondary schools

May 22 8:00pm VoxEU.org: Recent Articles
In recent years, several US states have introduced college admission policies that reward local rather than global relative performance by guaranteeing admission to students graduating in the top N-percent of their high school. This column examines how these policies affected socioeconomic and ethnic segregation at both the university and high school levels in the state of Texas. While the policies did not replicate the level of diversity in universities seen under earlier affirmative action policies, they did lead to a reduction in the overall level of ethnic segregation in high schools.
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Rivlin: Congratulations on choosing public policy

May 22 5:10pm Brookings Topics - U.S. Economic Performance
Graduates and members of the McCourt School extended family: I have taught at McCourt School as a part-time visiting professor since the fall of 2003—almost 14 years—and absolutely loved being here, especially interacting with students. The McCourt School is fortunate to attract such a talented, lively group of young people from all over the United…        ...
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