Can urban coffee consumption help predict US inflation?

Motivated by the importance of coffee to Americans and the significance of the coffee subsector to the US economy, we pursue three notable innovations. First, we augment the traditional Phillips curve model with the coffee price as a predictor, and show that the resulting model outperforms the traditional variant in both in-sample and out-of-sample predictability of US inflation. Second, we demonstrate the need to account for the inherent statistical features of predictors such as persistence, endogeneity, and conditional heteroskedasticity effects when dealing with US inflation. Consequently, we offer robust illustrations to show that the choice of estimator matters for improved US inflation forecasts. Third, the proposed augmented Phillips curve also outperforms time series models such as autoregressive integrated moving average and the fractionally integrated version for both in-sample and out-of-sample forecasts. Our results show that augmenting the traditional Phillips curve with the urban coffee price will produce better forecast results for US inflation only when the statistical effects are captured in the estimation process. Our results are robust to alternative measures of inflation, different data frequencies, higher order moments, multiple data samples and multiple forecast horizons

Understanding American Power:Conceptual clarity, strategic priorities and the decline debate

What does it mean for the United States to be powerful? The prospect of a decline in American power, especially relative to a rising China, has attracted considerable scholarly and political attention. Despite a wealth of data, disagreements persist regarding both the likely trajectory of the US-China balance and the most effective strategy for preserving America’s advantage into the future. This article locates the source of these enduring disputes in fundamental conceptual differences over the meaning of power itself. We map the distinct tracks of argument within the decline debate, showing that competing positions are often rooted in differences of focus rather than disputes over fact. Most fundamental is a divide between analyses dedicated to national capabilities, and others that emphasise mechanisms of relational power. This divide underpins how strategists think about the goal of preserving or extending American power. We therefore construct a typology of competing understandings of what it means for America to be powerful, to show that a strategy suited to bolstering American power according to one definition of that goal may not support, and may even undermine, American power understood in other ways