Economics Roundtable

March 2017 Fed Funds Rate

What is the effect of a 0.25% change in the Fed Funds rate?.

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March 2017 Payroll Employment

Payroll employment has not grown impressively since 2000. Some baby-boomers retired, but that does not totally account for this graph.

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May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

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The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .

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Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.

Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?

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The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.

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Money and Banking

March 20, 2017, 9:33 am, 1730108

“The Financial CHOICE Act espouses some principles that we heartily endorse. Chief among them is that the more well-capitalized institutions are, the less of a threat they pose to financial stability. And we endorse removing many inefficient parts of Dodd-Frank. But at the end of the day, the CHOICE Act ...

March 13, 2017, 7:33 am, 1728037

“We’re going to have insurance for everybody.” People covered under the law “can expect to have great health care. It will be in a much simplified form. Much less expensive and much better.” President Trump, Washington Post, January 15, 2017.

We see health as a basic human right. Every ...

March 6, 2017, 9:33 am, 1725981

“We believe the Federal Reserve’s large-scale asset purchase plan (so-called “quantitative easing”) should be reconsidered and discontinued. […]The planned asset purchases risk currency debasement and inflation, and we do not think they will achieve the Fed’s objective of promoting employment.” Open Letter to Ben Bernanke, The Wall Street ...

February 27, 2017, 9:33 am, 1723801

“Don’t believe these phony numbers when you hear 4.9 and 5 percent unemployment. The number’s probably 28, 29 as high as 35. In fact, I even heard recently 42 percent.” Candidate Donald Trump, February 9, 2016.

When governments don’t like the numbers their statisticians report, they have two options. ...

February 20, 2017, 7:33 am, 1721454

“A key structural vulnerability from asset management activities is the potential mismatch in open-ended funds between the liquidity of fund investments and daily redemption of fund units.” Financial Stability Board, January 2017

In the aftermath of Britain’s July 2016 vote to exit the European Union, six U.K. open-end property ...

February 13, 2017, 9:33 am, 1719288

“Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough.” ECB President Mario Draghi, 26 July 2012.

In 2012, the ECB faced down a mortal threat to the euro: fears of redenomination (the re-introduction of domestic ...

February 6, 2017, 9:33 am, 1717048

“Despite the clear message delivered by President Donald Trump in prioritizing America’s interest in international negotiations, it appears that the Federal Reserve continues negotiating international regulatory standards for financial institutions among global bureaucrats in foreign lands without transparency, accountability, or the authority to do so. This is unacceptable.”

January 30, 2017, 9:33 am, 1714869

"That [comparative advantage] is logically true need not be argued before a mathematician; that it is not trivial is attested by the thousands of important and intelligent men who have never been able to grasp the doctrine for themselves or to believe it after it was explained to them."

January 23, 2017, 9:33 am, 1712728

“Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital currency. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and ...

January 16, 2017, 9:33 am, 1710866

“We call for further analysis of the technicalities, opportunities, and challenges of state-contingent debt instruments, including GDP-linked bonds.” G20 Finance Ministers & Central Bank Governors, 23-24 July 2016, Chengdu, China

Gross government debt in advanced economies has surpassed 105% of GDP, up from less than 75% a decade ago. ...