Vietnam Cuts Refinance Rate to 12% From 13%, Effective May 28
Global Macro Channel: Latest Posts
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Global Macro
Sachs: Where are the Global Leaders?
Jeffrey Sachs urges leaders to recognize that “working with the UN agencies is in fact the only way to solve global problems”: Where are the global leaders?, by Jeffrey Sachs, Commentary, Project Syndicate: The G8 Summit in Japan earlier this month was a painful demonstration of the pitiful state of global cooperation. The world is [...]
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Global Macro
Preferential Trade Agreements
Douglas Irwin reviews Jagdish Bagwati’s new book: How Free Is Free Trade?: Bhagwati’s ‘Termites in the Trading System’, by Douglas A. Irwin, Book Review, NY Sun: …In “Termites in the Trading System,” [Jagdish Bhagwati] argues that not all trade deserves our equal support, … and mounts a brisk and spirited attack on preferential, so-called “free [...]
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Global Macro
Good news about oil, but for our grandkids – not us
A comment on this site said ”The data really do speak for themselves if given a chance.” Unfortunately this is not so. Change can disorient us, making it difficult to clearly observe and analyze the situation. Lawrence Solomon demonstrates this for us in his article about peak oil. Too many people make his mistakes, and [...]
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Global Macro
Price Troubles Once More, But Still Hoping for a Break
Today’s update on consumer prices for June is one more bit of bad news on inflation. But maybe, just maybe, the inflationary momentum is about to break for a while. Before we dive into what may, or may not happen, let’s review the latest numbers. Consumer prices surged by 1.1% last month, the Bureau of [...]
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Global Macro
Why a lot of people think the CPI is not representative of their experience and are right. At least partly.
Government statistics, particularly the CPI, have been in the news (e.g., [0]). Following up on my previous posts [1], [2], I want to take a stab at the question posed in the title. This post focuses on issue separate from the mathematics of the index forumulation, and has to do with what the typical weights [...]
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Global Macro
Implications of adjustment to riskier dollar assets in a portfolio balance framework, illustrated in three steps
Consider a hypothetical world economy with assets denominated in dollars and euros. Define the exchange risk premium on dollar denominated assets as: rp = iUS – i* – E(ds) where E(.) is the expectations operator, and ds is the change in the log exchange rate in the next period. (Note that this is not the [...]
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Global Macro
Risk Mis-Assessment Agencies
No real surprises here. One of the reasons financial markets faltered is that ratings agencies fell down on the job, in large part due to the presence of incentives that worked against issuing low ratings: Study Finds Flawed Practices at Ratings Firms, by Michael M. Grynbaum, Commentary, NY Times: The analyst at the credit ratings [...]
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Global Macro
The Excessive Smoothness of Forecasts
Last summer, around this time, the consensus forecast for 2008 U.S. real GDP growth was 2.8%. Almost every month since then, the forecast has tended to be marked down a little: the latest consensus forecast, released ten days ago, is that U.S. growth this year will be 1.5 %. So even though the U.S. economy [...]
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Global Macro
Charitable Bequests
Do we need to put charitable bequests on a shorter leash?: Dog Eat Your Taxes?, by Ray D. Madoff, Commentary, NY Times: The latest news … that Leona Helmsley left instructions that her charitable bequest of as much as $8 billion be used for the care and welfare of dogs, rubs our noses in the [...]
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Global Macro
What’s Causing Global Food Price Inflation?
This research argues that India, China, and speculators are not the cause of the food price explosion, the cause is biofuel support policies. Thus, since the “OECD’s recent report on the economic assessment of biofuel support policies has clearly shown that their effectiveness is disappointingly low,” the conclusion is that governments should reconsider their biofuel [...]
