was bernanke right about exports in feb 2008?
TRANSCRIPT
1confidential
Devon F, 12Jun09
Ben Bernanke’s Feb 2008 Testimony before Congress
2confidential
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming quarters,
providing some impetus to domestic economic
activity and employment”
3confidential
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming quarters,
providing some impetus to domestic economic
activity and employment”
4confidential
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming quarters,
providing some impetus to domestic economic
activity and employment”
confidential
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1.1
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Strength of the US Dollar against a basket of world currencies, weighted by trade volume and normalized against 2008Q1 value
Real value of total US exports, normalized against 2008Q1 value
US Real Exports & Foreign Value of the US Dollar
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Correlation or causation?
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Dependent Variable: G_EXP_TOTAL_REAL
Method: Least Squares
Date: 06/10/09 Time: 11:48
Sample (adjusted): 2000Q4 2009Q1
Included observations: 34 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 3.263742 2.035128 1.603704 0.1200
G_EXP_TOTAL_REAL(-1) 0.626724 0.189017 3.315709 0.0025
G_EXP_TOTAL_REAL(-2) -0.165856 0.208888 -0.793992 0.4339
G_FX_RATE_WA -0.205268 0.089567 -2.291785 0.0296
G_FX_RATE_WA(-1) -0.129487 0.085896 -1.507492 0.1429
G_FX_RATE_WA(-2) -0.035263 0.114459 -0.308088 0.7603
R-squared 0.654264 Mean dependent var 2.578084
Adjusted R-squared 0.592526 S.D. dependent var 15.46998
S.E. of regression 9.875060 Akaike info criterion 7.576687
Sum squared resid 2730.471 Schwarz criterion 7.846045
Log likelihood -122.8037 Hannan-Quinn criter. 7.668546
F-statistic 10.59734 Durbin-Watson stat 1.922675
Prob(F-statistic) 0.000009
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1.1
1.2
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But what’s going on here?
$ value
real E
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming
quarters, providing some impetus to domestic
economic activity and employment” confidential
9
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10
Dependent Variable: G
Method: Least Squares
Date: 06/10/09 Time: 12:06
Sample (adjusted): 1947Q3 2008Q4
Included observations: 246 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 2.806401 0.464904 6.036522 0.0000
G(-1) 0.324615 0.060971 5.324050 0.0000
EXPORTS_REAL 0.039252 0.012136 3.234217 0.0014
EXPORTS_REAL(-1) -0.040393 0.012194 -3.312604 0.0011
EXPORTS_REAL(-1)-EXPORTS_REAL(-2) -0.030775 0.016726 -1.839934 0.0670
R-squared 0.173127 Mean dependent var 3.377413
Adjusted R-squared 0.159403 S.D. dependent var 4.134518
S.E. of regression 3.790694 Akaike info criterion 5.523091
Sum squared resid 3463.017 Schwarz criterion 5.594338
Log likelihood -674.3402 Hannan-Quinn criter. 5.551779
F-statistic 12.61488 Durbin-Watson stat 2.106617
Prob(F-statistic) 0.000000
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming
quarters, providing some impetus to domestic
economic activity and employment” confidential
11
confidential
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Dependent Variable: G_PAYROLLS
Method: Least Squares
Date: 06/12/09 Time: 13:25
Sample (adjusted): 1995Q2 2008Q4
Included observations: 55 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 1.943280 0.754529 2.575487 0.0132
G_PAYROLLS(-1) 0.797414 0.076222 10.46170 0.0000
EXPORTS_REAL 0.004007 0.004391 0.912738 0.3660
EXPORTS_REAL(-1) 0.000217 0.006595 0.032965 0.9738
EXPORTS_REAL(-2) -0.005987 0.004932 -1.213909 0.2308
IMPORTS_REAL 0.003921 0.003060 1.281384 0.2063
IMPORTS_REAL(-1) -0.005055 0.004793 -1.054655 0.2970
IMPORTS_REAL(-2) 0.001094 0.003567 0.306636 0.7605
R-squared 0.857774 Mean dependent var 1.138615
Adjusted R-squared 0.836591 S.D. dependent var 1.475625
S.E. of regression 0.596505 Akaike info criterion 1.938264
Sum squared resid 16.72344 Schwarz criterion 2.230240
Log likelihood -45.30227 Hannan-Quinn criter. 2.051174
F-statistic 40.49417 Durbin-Watson stat 2.421794
Prob(F-statistic) 0.000000
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1.0
1.1
1996 1998 2000 2002 2004 2006 2008
Payrolls, Relative to 2008Q1 Value
Real Value of Imports, Relative to 2008Q1 Value
Real Value of Exports, Relative to 2008Q1 Value
Doesn’t look like jobs are connected to exports much….
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13
Dependent Variable: G_PAYROLLS
Method: Least Squares
Date: 06/12/09 Time: 13:25
Sample (adjusted): 1995Q2 2008Q4
Included observations: 55 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 1.943280 0.754529 2.575487 0.0132
G_PAYROLLS(-1) 0.797414 0.076222 10.46170 0.0000
EXPORTS_REAL 0.004007 0.004391 0.912738 0.3660
EXPORTS_REAL(-1) 0.000217 0.006595 0.032965 0.9738
EXPORTS_REAL(-2) -0.005987 0.004932 -1.213909 0.2308
IMPORTS_REAL 0.003921 0.003060 1.281384 0.2063
IMPORTS_REAL(-1) -0.005055 0.004793 -1.054655 0.2970
IMPORTS_REAL(-2) 0.001094 0.003567 0.306636 0.7605
R-squared 0.857774 Mean dependent var 1.138615
Adjusted R-squared 0.836591 S.D. dependent var 1.475625
S.E. of regression 0.596505 Akaike info criterion 1.938264
Sum squared resid 16.72344 Schwarz criterion 2.230240
Log likelihood -45.30227 Hannan-Quinn criter. 2.051174
F-statistic 40.49417 Durbin-Watson stat 2.421794
Prob(F-statistic) 0.000000
NADA!
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And what about this??
$ value
real E
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15
Dependent Variable: G_PAYROLLS
Method: Least Squares
Date: 06/12/09 Time: 13:25
Sample (adjusted): 1995Q2 2008Q4
Included observations: 55 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 1.943280 0.754529 2.575487 0.0132
G_PAYROLLS(-1) 0.797414 0.076222 10.46170 0.0000
EXPORTS_REAL 0.004007 0.004391 0.912738 0.3660
EXPORTS_REAL(-1) 0.000217 0.006595 0.032965 0.9738
EXPORTS_REAL(-2) -0.005987 0.004932 -1.213909 0.2308
IMPORTS_REAL 0.003921 0.003060 1.281384 0.2063
IMPORTS_REAL(-1) -0.005055 0.004793 -1.054655 0.2970
IMPORTS_REAL(-2) 0.001094 0.003567 0.306636 0.7605
R-squared 0.857774 Mean dependent var 1.138615
Adjusted R-squared 0.836591 S.D. dependent var 1.475625
S.E. of regression 0.596505 Akaike info criterion 1.938264
Sum squared resid 16.72344 Schwarz criterion 2.230240
Log likelihood -45.30227 Hannan-Quinn criter. 2.051174
F-statistic 40.49417 Durbin-Watson stat 2.421794
Prob(F-statistic) 0.0000007,600
8,000
8,400
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10,400
10,800
05Q1 05Q3 06Q1 06Q3 07Q1 07Q3 08Q1 08Q3 09Q1
Federal Government Debt: Total Public Debt ($B)
So the Dollar is still the safest currency?
But weren’t we to blame?
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Dependent Variable: G_PAYROLLS
Method: Least Squares
Date: 06/12/09 Time: 13:25
Sample (adjusted): 1995Q2 2008Q4
Included observations: 55 after adjustments
Variable Coefficient Std. Error t-Statistic Prob.
C 1.943280 0.754529 2.575487 0.0132
G_PAYROLLS(-1) 0.797414 0.076222 10.46170 0.0000
EXPORTS_REAL 0.004007 0.004391 0.912738 0.3660
EXPORTS_REAL(-1) 0.000217 0.006595 0.032965 0.9738
EXPORTS_REAL(-2) -0.005987 0.004932 -1.213909 0.2308
IMPORTS_REAL 0.003921 0.003060 1.281384 0.2063
IMPORTS_REAL(-1) -0.005055 0.004793 -1.054655 0.2970
IMPORTS_REAL(-2) 0.001094 0.003567 0.306636 0.7605
R-squared 0.857774 Mean dependent var 1.138615
Adjusted R-squared 0.836591 S.D. dependent var 1.475625
S.E. of regression 0.596505 Akaike info criterion 1.938264
Sum squared resid 16.72344 Schwarz criterion 2.230240
Log likelihood -45.30227 Hannan-Quinn criter. 2.051174
F-statistic 40.49417 Durbin-Watson stat 2.421794
Prob(F-statistic) 0.000000
18confidential
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming quarters,
providing some impetus to domestic economic
activity and employment”
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming
quarters, providing some impetus to domestic
economic activity and employment” confidential
19
“ US real exports of goods and services increased at
an annual rate of about 11 percent in the second
half of (2007), boosted by continuing economic
growth abroad and the lower foreign exchange
value of the dollar… US exports should continue to
expand at a healthy pace in coming quarters,
providing some impetus to domestic economic
activity and employment” confidential
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Chairman Bernanke
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Chairman Ber-nocchio