Menzie Chinn

Madison

Contributor at Freelance

Professor of Public Affairs and Economics, University of Wisconsin, and Blogger at Econbrowser. All views are my own.

Articles

“Heritage Foundation Names EJ Antoni as Chief Economist”

4 days ago | econbrowser.com | Menzie Chinn

Announcement on May 28 from Heritage:“The Heritage Foundation is thrilled to announce Dr. EJ Antoni as its new chief economist, bringing his exceptional ability to communicate complex economic ideas with clarity and passion to advocate for the American people.
The Roller Coaster Ride Continues … EPU through 6/1

6 days ago | econbrowser.com | Menzie Chinn

And it doesn’t seem like it will end soon, unless …Figure 1: EPU – trade (blue, left scale), EPU (red, right scale). Source: policyuncertainty.com.
“Trump may actually want a recession…”

6 days ago | econbrowser.com | Menzie Chinn

That would explain a lot. He’s not very effective at much, but he is effective at setting the preconditions for a recession. From Yahoo!Finance quoting the Kobeissi Letter:“In a way, President Trump may actually want a recession,” the post says. “A recession achieves most of Trump’s economic goals at once,” referring to his campaign promises of low inflation, treasury yields, a reduction in trade deficits, a rate cut by the Federal Reserve, and lower oil prices.
Global Imbalances as Global Recession EWS?

6 days ago | econbrowser.com | Menzie Chinn

EWS = “Early Warning System”. Jamel Saadaoui has an interesting blogpost, investigating whether the median current account to GDP balance — namely when it becomes very negative, -2% to -4% — presages a global recession as defined by Kose et al. (2020). Source: Saadaoui (2025). As Saadaoui notes, there’s not a perfect record — there’s a false positive in 2022Q3 (well, Kose et al.
Policy Uncertainty Watch

6 days ago | econbrowser.com | Menzie Chinn

Data through yesterday, from Baker, Bloom and Davis:Figure 1: EPU – trade (blue, left scale), EPU (red, right scale). Source: policyuncertainty.com.
Taking Economic Policy Uncertainty Seriously

1 week ago | econbrowser.com | Menzie Chinn

EPU has risen from a 2016-2024 level of 136 to a 2025 level of 430. Ferrara and Geurin (2018) find that a 90 pt increase results in a bit less than 2% decline in employment at the one year horizon. Assuming linearity in the impacts, this means that at a one year horizon, employment might be down by as much as 6 ppts. This is shown in the figure below.
Nowcasted Equipment Investment Decelerates

1 week ago | econbrowser.com | Menzie Chinn

Why? Q2 equipment investment as implied by GDPNow of 5/30. Figure 1: Caldara et al. Trade Policy Uncertainty index (blue, left scale), and nonresidential equipment investment (black, right log scale), and implied by GDPNow of 5/30 (gray square), both in bn.Ch.2017$ SAAR. Source: Iacoviello TPU, BEA 2025Q1 second release, and Atlanta Fed. Note the spike in trade policy uncertainty.
Measured Trade Uncertainty Spikes

1 week ago | econbrowser.com | Menzie Chinn

Graph for data through 5/30 for Baker, Bloom and Davis index. Figure 1: EPU-trade category (blue, left scale), and Trade Policy Uncertainty index (red, right scale). Source: Baker, Bloom & Davis policyuncertainty.com, and Caldara et al. TPUD.
GDP and “Core GDP” Nowcasts

1 week ago | econbrowser.com | Menzie Chinn

Where “core” GDP (per Furman) is final sales to private domestic purchasers. Figure 1: GDP (black), SPF May median (tan), GDPNow of 5/30 (blue square), GS of 5/30 (red inverted triangle), and NY Fed of 5/30 (light green triangle). Source: BEA 2025Q1 second release, Atlanta Fed, Goldman Sachs, NY Fed, Philadelphia Fed, and author’s calculations.
Trump Predicts at Least 3% Growth

1 week ago | econbrowser.com | Menzie Chinn

At least it’s mercifully less than the 4% that he promised last time (but 9% is more than last time)This is what 3% looks like:Figure 1: GDP (black), CBO (light blue), Troika inferred from Trump remarks at 3% (red squares), and May Survey of Professional Forecasters median (tan), all in bn.Ch.2017$ SAAR. Source: BEA 2025Q1 second release, CBO (January 2025), TruthSocial post of 30 May 2025, Philadelphia Fed (May 2025), and author’s calculations.