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Blog Post - Views on the Economy and the World

How China Compares Internationally in New GDP Figures

| May 31, 2020

The World Bank on May 19, as it does every six years, released the results of the most recent International Comparison Program (ICP), which measures price levels and GDPs across 176 countries.  The new results are striking.  It is surprising that they have received almost no attention so far, perhaps overshadowed by all things coronavirus.

For the first time, the ICP shows China’s total real income as slightly larger than the US.  It reports that China’s GDP was $19,617 billion in 2017, in Purchasing Power Parity (PPP) terms, while the United States’ GDP stood at $19,519 billion.

Blog Post - Views on the Economy and the World

Outlook for 2017

| Jan. 03, 2017
Five journalist’s questions about the economic outlook in the New Year and my answers: In the first year of Trump’s presidency, what do you predict for the US economy in 2017?The US economy is currently at or near full employment, for the first time in 9 years.  So there is limited capacity for an acceleration of growth in the medium term.  Mr. Trump is fairly likely to follow through with his proposals for massive tax cuts and spending increases (which the economy needed 5 years ago, but were blocked by Republicans).

Blog Post - Views on the Economy and the World

What Will the Trump Presidency Look Like?

| Nov. 12, 2016
We unexpectedly find ourselves in uncharted territory, in so many ways. The United States has never before had a president with no political or military experience. And Donald Trump is especially unpredictable: he has so often said things that conflict with other things he has said. So it is hard to know what he will do.But a possible precedent for what the Trump presidency may look like sits in plain sight: the George W. Bush presidency. To be fair, the Bush family clearly did not support Trump’s campaign.

Blog Post - Views on the Economy and the World

Economists Sign Letter Opposing Trump

| Nov. 02, 2016
370 of us economists have signed a new letter opposing Donald Trump:  Economists Lay Out List of Reasons to Vote Against Trump.   Here is the text of the letter, which the Wall Street Journal has reported on .The WSJ earlier surveyed all previous members of the President’s Council of Economic Advisers, spanning eight presidential administrations, Republican and Democrat.  Not a single one supported Trump, including the Republicans!Also 19 Nobel Laureates have signed a letter endorsing Hillary Clinton.

Blog Post - Views on the Economy and the World

The Gold Standard and Trump

| Oct. 31, 2016
My preceding post, “The Fed and Inequality,” observed that populists have historically favored easy money and low interest rates.  I mentioned William Jennings Bryan’s campaigns for the presidency in the 1890s as well as the supply-siders in the early 1980s who blamed the failure of Reaganomics to produce sufficient growth on Paul Volcker’s efforts to fight inflation with tight monetary policy.An interesting dimension concerns gold.  Bryan’s proposed reform for allowing easy money was to take the US off of the gold standard, most famously in his 1896 “cross of gold” speech.

Blog Post - Views on the Economy and the World

The Fed and Inequality

| Oct. 28, 2016
Populist politicians, among others, have claimed in recent years that monetary policy is too easy and that it is hurting ordinary workers.   But raising interest rates is not the way to address income inequality.It is a strange claim for anyone to make, but especially for populists.  Low interest rates are good for debtors, of course, and bad for creditors. Throughout most of US history, populists have supported easy monetary policy and low interest rates, to help the little guy, against bankers, who had hard hearts and believed in hard money.

Blog Post - Views on the Economy and the World

Why Vote? Follow-up

| Sep. 29, 2016

My preceding blogpost — “A Radical Solution to the Fundamental Flaws in US Politics: Vote!” — received several objections from readers to the effect that I had failed to address the paradox of voting, or “Downs Paradox” (particularly at the Econbrowser site).That was a deliberate choice on my part.  I suspect that most people understand this issue instinctively, even the non-academic public who are not familiar with the phrase.Yes, it is true that it is not rational to take the time to vote… if you are a homo economicusnarrowly defined as someone whose utility function includes solely his or her own economic consumption, i.

Blog Post - Views on the Economy and the World

A Radical Solution to the Fundamental Flaws in US Politics: Vote!

| Sep. 26, 2016
The train of American electoral politics has gone further and further “off the rails” in recent decades.  A number of suspected culprits have been identified as the specific fundamental flaw in the system that needs to be fixed.  Gerrymandering.   Campaign finance.  Economic inequality.  “False balance” in the media.  It is strange that the public debate gives so much attention to these four explanations — and a few others like them. Those diagnoses don’t offer a ready remedy that is in the hands of the people.

Blog Post - Views on the Economy and the World

Column by Trump Adviser is Not Economically Literate

| Sep. 02, 2016
One can’t blame the Financial Times for publishing an opinion piece by Wilbur Ross, if he is indeed a senior policy adviser to Donald Trump (“Trump campaign benefits from criticism of trade imbalances,” 29 August).   It is hard to judge the Republican candidate’s positions from his own words, because of his famous “shoot from the lip” style.   Does Trump really believe, for example, that American workers’ wages are too high, as he said in the Republican debates?   Many had been waiting to see who his economic advisers would be, in part so that we could have clear and precise language by which to judge what are the candidate’s positions.