Menzie Chinn Blog | Talkmarkets | Page 1
Professor of Public Affairs and Economics at the University of Wisconsin
Contributor's Links: Econbrowser University of Wisconsin

Menzie David Chinn is a professor of public affairs and economics at the University of Wisconsin–Madison. He, along with James Hamilton, are co-authors of Econbrowser, a weblog on current macroeconomic ... more

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A Monetarist Manifesto For The Covid-19 Era
Over the 2000-2021Q1 period, the CPI has grown about 31% faster than the GDP deflator, so that suggests a CPI inflation rate of about 34.5% for the next 1.5 to 2 years.
A Sugar High?
By Q4 of 2021, the White House is predicting output 1.2% above potential GDP as estimated by the CBO earlier this year (February).
Where To Find Business Cycle Dates For Different Economies
Here's how to find the business cycles in various economies using the Burns-Mitchell-NBER approach.
Kevin Hassett Prediction: 7% Y/Y Inflation By December 2021
This report implies that month-on-month inflation for June through December will average at least 7.3%, substantially higher than the 4% the University of Michigan’s June survey implied for the next year (through June 2022).
One Year Ahead Expected CPI Inflation Rates
From November to June, the Michigan (survey) measure has risen 1.2 percentage points, while the Cleveland Fed (hybrid market/survey) measure has risen only 0.6 percentage points.
Inflation: Three Event Studies
The surprise in inflation for the March, April, and May reference month releases induced respectively 2, 4, and 6 basis point upward moves in the 5-year inflation breakevens — hardly earthshaking.
Interpreting Inflation Rates For May
May CPI inflation surprised on the upside, with month-on-month 0.6% vs 0.4% (not annualized).
Who’s Consumer Price Index?
Unless the income distribution is concentrated at one level, or all households have the same expenditure patterns regardless of income levels, then almost nobody will feel the CPI is representative of the changing prices facing them.
Everything Is Relative
The dollar is down, and down relative to the NBER peak of 2020M02, but it’s still up 15.4% since 2014M05.
Five Year Breakeven Inflation Expectations
The five-year Treasure/Tips Spread, adjusted for premia.
CPI Skepticism
Every few years, skepticism of officially calculated inflation rates surges, so it seems a good idea to now recap how the CPI measures (and mis-measures) the cost of living.
Employment Release And Business Cycle Indicators
Employment figures were released today, showing continued growth.
Steel Employment And Production
Employment and production were declining before the pandemic. March employment is roughly the same as three years ago. Production is down 7.8% in April vs. three years prior.
Debt Dynamics, And The Real Interest Rate
May 10-year TIPS was -0.85%. As of yesterday, that rate was -0.84% and -0.05% for 30-year.
Sixty Years Of Money, GDP And The Price Level
The explanatory power of the M2 to GDP ratio is essentially zero for the price level at the year horizon.
Business Cycle Indicators As Of June 1
Monthly GDP figures were released by IHS-Markit today, showing a rebound in April.
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