My paper with @Felix_Gerding "De-Dollarization? Not So Fast" is now published in Economics Letters. We find that U.S. dollar dominance has been totally unchanged across many metrics since COVID & the 2022 Russian invasion of Ukraine/related sanctions🧵 sciencedirect.com/science/articl… The US dollar share of central bank FX reserves has remained largely unchanged since early 2022.

Yesterday marked 10 years since the release of Piketty's "Capital In The 21st Century". Hard to think of an economics book in the past 10 years which, for better or worse, has had as much influence on discussion about economics, policy and politics. A Thread🧵
Measuring Top 1% income shares is difficult. Auten-Splitner using unreported earnings find after-tax top 1% income shares have been essentially flat since the 1960s unlike the Piketty-Saez-Zucman who find shows substantial increases. Capital21 didn't show after-tax Top 1% shares

In latest @CapAndFreedom ep, Steve Levitt talks his career & retiring as @UChicago prof while still leading RISC & Freakonomics. We talk applied economics, Chicago econ dept (price theory failure, macro success, personalities), Freakonomics origin & more podcasts.apple.com/us/podcast/ste… Podcast episode full transcript: capitalismandfreedom.substack.com/p/episode-28-s…

NFL 4th down attempts have skyrocketed since the 2018 NFL season. Amazing how such a simple insight that increases win probability, encapsulated in David Romer's 2006 Journal of Political Economy (@JPolEcon) article, took over 10 years to get coaches/GMs/owners on board. (1/4) "Do Firms Maximize? Evidence from Professional Football" (2006 JPE) by David Romer (2/4) journals.uchicago.edu/doi/full/10.10…

1: Am launching a new website "De-Dollarization Facts" (related paper "De-Dollarization? Not So Fast" ) tracking the status of the U.S. dollar and provide facts in the "de-dollarization" debate which often ignores just how dominant the US dollar is. THREAD de-dollarization.org 2: There are an almost endless number of commentators saying it's the end of the dollar (many from crypto/CBDC communities and intl political interests opposed to the US); most recently with JP Morgan, Goldman Sachs, State Street analysts jumping on this train. Not so fast. (2/N)

Today the IMF released 4Q2023 COFER data: the US dollar share of world reserves DECREASED from 59.8% in 3Q2022 to 58.4% in 4Q2022, the lowest level since Russia invaded Ukraine in 2022. Could this be the start of declining dollar dominance amid geopolitical realignment? THREAD🧵 Much short-run variation reflect changes in the USD FX spot price and FX reserve managers being slow to rebalance. USD massively sold off in 4Q2022, nonetheless, US dollar indices finished the end of 2022 MUCH HIGHER than at start of Russia invasion; dollar share now LOWER.

Today the IMF released the 2Q2022 COFER data, the first full quarter of data since the beginning of the Russian invasion of Ukraine. US dollar share of world reserves actually INCREASED to 59.53% in 2Q2022 up from 58.85% in 2022Q1 and 58.81% in 2022Q4! Dollar Dominance? THREAD🧵 Not the result I was expecting. To be sure there are a lot of concurrent events happening including the worst global inflationary spiral since the 1970s; however, dollar share of reserves usually decreases during inflationary spirals like in the 1970s/1980s per Eichengreen (2014)

A poor twist in tax policy with the "Inflation Reduction Act": tossing out closing carried interest loophole (a logical move to treat general partner income like ordinary income) yet creates a 1% buyback tax (when buybacks are already taxed through cap gains taxes): An EXPLAINER: 2: Backstory: in 2003, the div tax rate was cut to 15% (same rate as long term cap gains) to remove the tax advantage then afforded to buybacks. Firm dividend issuance was previously declining rapidly; see "Disappearing Dividends" of Fama and French (2001) sciencedirect.com/science/articl…

1: A THREAD on Modern Monetary Theory (MMT) and my new @NationalAffairs article which attempts to outline many of the major empirical flaws of MMT. nationalaffairs.com/publications/d… 2: After reading the main MMT texts from Stephanie Kelton's "The Deficit Myth" to "Macroeconomics" by Bill Mitchell, L. Randall Wray, and Martin Watts and "Modern Monetary Theory" by L. Randall Wray, this is my attempt at an objective assessment.

Yesterday I spoke on the @TDANetwork about frothiness in the technology sector (particularly in streaming and electric cars) given excessively high valuations (Tesla's P/E ratio was around 1300 as of yesterday). The Nasdaq (QQQ) is now down over 5% today. tdameritradenetwork.com/video/rB4AoXQ4… “U.S. Stocks Fall Amid Decline in Tech Shares” via @WSJ wsj.com/articles/globa…

RIP Tom Laubach, one of the most influential macroeconomists of our time, who among many achievements co-authored the Laubach-Williams (“LW”) and Holston-Laubach-Williams (“HLW”) models of the natural rate of interest or "R-star" newyorkfed.org/research/polic… The famous Laubach-Williams ("LW") model comes from Laubach and Williams. 2003. “Measuring the Natural Rate of Interest,” Review of Economics and Statistics 85, no.4 (November): 1063-70. federalreserve.gov/pubs/feds/2001…

Incentives at work along with transaction utility/mental accounting. At the the Vystavochaya Station in Moscow, if you do 30 squats in front of a squat sensor, you get a free metro pass (which costs 30 rubles/~$0.91 USD) @R_Thaler @m_sendhil @StevenDLevitt "Moscow Subway Station Lets Passengers Pay Fare In Squats" via @Forbes forbes.com/sites/andrewbe…

RIP Emmanuel Farhi, a giant in macroeconomics and an incredibly warm, gentle person. A huge loss for the @Harvard community. Gone too soon. Farhi delivering the 2019 @SEDmeeting Plenary Talk: "Macro as Explicitly Aggregated Micro"

A THREAD on my new paper with @arebucci1 on the impact of #COVID-19-related central bank long-term asset purchases of sovereign debt (#QuantitativeEasing) on government bond yields in both Developed and #EmergingMarkets (1/n) papers.ssrn.com/sol3/papers.cf… We analyze 20 #COVID-19 QE announcements made by 17 central banks (9 DM central banks, 11 EM central banks) using the classic event study framework of FFJR(1969), extending work of Vissing-Jorgensen and Krishnamurthy (2011) and Swanson (2011) who analyze Great Recession QE (2/n)

A THREAD on my new @nberpubs working paper with Urban Jermann which explores optimal government debt management with floating rate notes (FRNs) (1/n) nber.org/papers/w27065 U.S. Treasury has been issuing 2-year Treasury floating rate notes (FRNs) since 2014 and total FRNs outstanding is approaching $450 billion (2/n)

A THREAD on why wage subsidies in the form of negative payroll taxes merit consideration in Phase 4 stimulus, echoing my recent op-eds with Art Laffer (1/n) 1: what is a negative payroll tax wage subsidy? It is the result of cutting the payroll tax not only to zero (which arguably provides too little relief) but lowering it further to make the payroll tax rate negative to become a payroll wage subsidy or “negative payroll tax” (2/n)

THREAD: My latest at National Review Online (@NRO) on the Federal Reserve's response to the economic fallout associated with COVID-19, "By Lending More Broadly, the Fed Can Avoid Picking Winners and Losers", makes the following policy recommendations (1/n) nationalreview.com/2020/04/corona… 1) Congress should amend Section 13(3) of the Federal Reserve Act to clarify solvency requirements and grant the Fed more flexibility in administering its Main Street Business Lending Program. The Fed could also use the APA to eliminate previous Dodd-Frank 13(3) rulemaking (2/n)

@PredictIt recession prediction markets now expect about a 75%-80% chance of a recession between now and the end of 2020 in the wake of #COVID19 #CoronavirusOutbreak. (1/n) The big question is at this point how could the U.S. still avoid a recession? (2/n)

I wonder how applicable the Diamond-Dybvig model of bank runs is to grocery store runs (1/n) Runs on both banks and grocery are largely a type of self-fulfilling prophecy: each depositor/consumer’s incentive to withdraw funds depends on what they expect other depositors/consumers to do. (2/n)

Interesting that the TIPS market doesn’t think coronavirus is entirely inflationary (a supply side story) given that inflation breakevens have fallen by about 0.3% over the past week. At same rate, breakevens haven't fallen anywhere close falling as much as they did in 2008. Maybe markets believe #Coronavirus is both a demand-side story (people not buying stuff) and a supply side story (store closures/people not going to work) which seem to offset each other, having a small net impact on inflation

My latest working paper in @nberpubs w/ @jkrimmel and Joe Gyourko on how zoning/land use regs have changed since the Great Recession: “The Local Residential Land Use Regulatory Environment Across U.S. Housing Markets: Evidence from a New Wharton Index” nber.org/papers/w26573 Since the Great Recession, U.S. municipalities on a net basis adopted slightly more restrictive land use regulations from 2006 to 2018