Some New Estimates of Japanese Trade Elasticities

by Menzie Chinn, Econbrowser.com Appeared originally 11 April 2013 at Econbrowser.  Image below added by Econintersect. One component of Abenomics is a vigorously expansionary monetary policy. The yen has depreciated substantially as a consequence – as of February, about 20% relative to 2012Q3. One question is how much of an expenditure switching effect this depreciation …

Reflation and Expenditure Switching in a Two Speed World

by Menzie Chinn, Econbrowser.com This appeared originally at Econbrowser, 25 March 2013. Illustration above added by Econintersect. Chairman Bernanke says it all From a speech today by Fed Chair Ben Bernanke, at the LSE:

What If People Lived Forever . . .

by Menzie Chinn, Econbrowser.com This appeared originally at Econbrowser, 28 February 2013. In a New Keynesian DSGE (or a RBC) Infinite-Lived vs. Finite-Lived Agents Jim Hamilton’s discussion of the Mankiw Dorian Gray pill reminded me that we already have the pill, distributed for free to all the residents of a typical DSGE implementation of New …

Evolving Views on Fiscal Multipliers

by Menzie Chinn, Econbrowser.com This article was originally published at Econbrowser. Context relevant estimates suggest larger, not smaller, fiscal multipliers. In its newly released Budget and Economic Outlook, the CBO has published new estimates of potential GDP. In conjunction with the most recent estimate of GDP, it appears that we are making halting progress on …

How to Induce Explosive Debt Dynamics

by Menzie Chinn, Econbrowser.com The debt ceiling and implications of: “We Republicans need to be willing to tolerate a temporary, partial government shutdown.” and more recently “I think it is possible that we would shut down the government to make sure President Obama understands that we’re serious.” It is one of the oddities of current …