The Romney Recovery of 2003-06

One of the most popular complaints of Barack Obama’s stewardship of the economy centers on the argument that bad government policies are responsible for the weak recovery we’ve had since the financial crisis. Many Romney supporters—including John Taylor, who is also one of Romney’s economic advisers—have pointed out that previous episodes of large contractions in […]

The Likelihood of BoJ Easing Next Week

The Fed’s Thursday easing announcement paves the way for the BoJ to announce its own asset purchase program expansion at next week’s policy meeting, in line with our previous view. There are certainly risks to this call: Just today the government released machine orders data showing a far more resilient July than expected, and earlier […]

Japan: Inflation Expectations and Real Interest Rates

There is evidence that inflation expectations are firmly moving into positive territory after languishing below zero following the onset of the global financial crisis. The 7y breakeven has stabilized at around 0.53% over the past couple of weeks, after averaging -1.1% from December 2008 to December 2011. This jump has helped move the 7y real […]

RGE’s Wednesday Note – Japan’s Production Shortfall Drags on EM Asia Supply Chain

The amplified shock from Japan’s March 11 earthquake, then tsunami, then nuclear crisis has rippled through the supply chain of its emerging Asia (EM Asia) neighbors. Production shutdowns and weakened demand in Japan began to register in Asia’s trade channels in the weeks following the disaster. As the extent and duration of disruptions to production in Japan become more apparent, the severity of regional supply chain interruptions and the effects on EM Asia’s industrial production and export volumes and prices through 2011 can be better anticipated.