The U.S. Economy and Policy Though a Global Lens
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Dr. Catherine L. Mann Barbara 54 and Richard M. Rosenberg Professor of Global Finance International Business School, Brandeis University CLMann @ Brandeis.edu www.CLMann.com
Global Interdependence Center Annual Monetary and Trade Conference, LeBow School of Business, Drexell University April 16, 2014
Road Map • Real side observa-ons – Evidence for more robust growth?
• Financial side observa-ons – Evidence of return to normal market ac-vity?
• Implica-ons for – Global growth – QE exit – Dollar
US Economy Poised for Stronger Growth? (#
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Exports: Not robust in key sectors (capital goods, business services) ./01234+$$56!7$82193:$;3<;3(*$!=>$?1=32@ABC1=4$31$56!7$82193:$$ .=>(D46$E,FG$H$%$%I$=/3$H<'&$
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Imports: Surprisingly weak especially consumer goods ,./0123+$$45!6$710829$:2;:2(*$!<=$>0<21?@AB0<3$20$45!6$710829$$ C<=(D35$E,FG$H$%$%$<I2$H;'&$
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Houthakker-Magee: Imports and GDP Durable and persistent feature of US data
Table 3: Es+mates for ac+vity elas+ci+es for US exports and imports Data period
Method
Level of Disaggregation
Exports
Imports
income
income
Previous research:
Houthakker, Magee (1969)
Annual 1951-1966
Hooper, Johnson, Marquez (2000) Wren-Lewis and Driver (1998)
OLS
Goods and Services
0.99
1.68
Quarterly 1956-1996
ECM (SR), Johansen (LR)
Goods and Services
1.8* (SR) 0.8* (LR)
1.0* (SR) 1.8* (LR)
Quarterly 1980-1995
ECM (SR), Johansen (LR)
Goods
1.12 (SR) 1.21 (LR)
2.43 (SR) 2.36 (LR)
Our study: (Mann and Pluck) 1. GDP as income 2. Matched expenditure and matched prices
Annual 1980-2003
Source: Mann and Pluck
Country and Commodity Fixed effects, dynamic panel
Panel of 4 categories of goods
2.79** (SR) 1.44** (LR)
4.11** (SR) 2.22** (LR)
0.58** (SR) 1.19** (LR)
1.00** (SR) 1.63** (LR)
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Historical Houthakker-Magee most evident, short-run & consumer demanded imports if PCE is robust, consumer goods imports should be too
Demise of Houthakker-Magee? Average Growth rates: Domestic vs. Imports (by matched category) Data: NIPA
GDP Imports PCE-goods
1968-2010 (ann) 2.9 6.0
2011-2013 (qtr) 2.2 2.2
3.3
3.1
memo: PCE
3.2
2.1
Consumer goods imports
8.5
1.7
PCE-autos Auto&parts-imports
3.4 7.0
4.4 11.2
Equipment investment Capital goods imports
5.0 13.5
6.8 6.4
IT investment IT imports
12.0 33.7
2.4 7.0
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