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4 posts from August 2019

August 21, 2019

Online Estimation of DSGE Models



The estimation of dynamic stochastic general equilibrium (DSGE) models is a computationally demanding task. As these models change to address new challenges (such as household and firm heterogeneity, the lower bound on nominal interest rates, and occasionally binding financial constraints), they become even more complex and difficult to estimate—so much so that current estimation procedures are no longer up to the task. This post discusses a new technique for estimating these models which belongs to the class of sequential Monte Carlo (SMC) algorithms, an approach we employ to estimate the New York Fed DSGE model. To learn more, check out this paper of ours.

Continue reading "Online Estimation of DSGE Models" »

Posted by Blog Author at 7:00 AM in DSGE, Macroecon | Permalink | Comments (0)

August 14, 2019

Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?



Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?

The imposition of Section 301 tariffs on about half of China’s exports to the United States has coincided with a fall in imports from China and gains for other countries. The U.S.-China trade conflict also appears to be accelerating an ongoing shift in foreign direct investment (FDI) from China to other emerging markets, particularly in Asia. Within the region, Vietnam is often cited as a clear beneficiary of these trends, a rising economy that could displace China, to some extent, in global supply chains. In this note, we examine the data and conclude that Vietnam is indeed gaining market share, but is too small to replace China anytime soon.

Continue reading "Are U.S. Tariffs Turning Vietnam into an Export Powerhouse?" »

Posted by Blog Author at 7:00 AM in Exports, International Economics, Tariffs | Permalink | Comments (0)

August 13, 2019

Just Released: Mind the Gap in Delinquency Rates



Just Released: Decoding Delinquency

Total household debt balances increased by $192 billion in the second quarter of 2019, boosted primarily by a $162 billion gain in mortgage installment balances, according to the latest Quarterly Report on Household Debt and Credit from the New York Fed’s Center for Microeconomic Data (the mortgage installment balances exclude home equity lines of credit, which are reported separately and have been declining in balance for some time). The new mortgage total of $9.4 trillion is slightly higher than the previous high in mortgage balances from the third quarter of 2008 in nominal terms.

Continue reading "Just Released: Mind the Gap in Delinquency Rates" »

Posted by Blog Author at 11:00 AM in Credit, Household Finance | Permalink | Comments (2)

August 07, 2019

Does a Data Quirk Inflate China’s Travel Services Deficit?



LSE_Does a Data Quirk Inflate China’s Travel Services Deficit?

Chinese residents are increasingly traveling to see the rest of the world, logging a total of 162 million foreign visits in 2018, up from 57 million in 2010. Increased travel spending by Chinese residents is acting to reduce the country's trade surplus because such spending is counted as a services import. However, there appears to be a quirk in the Chinese data that results in a significant understatement of the offsetting spending by visitors to China (a services export). According to other Chinese data, this understatement totaled $85 billion in 2018. If so, China's deficit in travel services is smaller than officially reported, and its trade surplus correspondingly larger.

Continue reading "Does a Data Quirk Inflate China’s Travel Services Deficit?" »

Posted by Blog Author at 7:00 AM in Balance of Payments, Current Account, Exports, International Economics | Permalink | Comments (0)

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