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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Jobs

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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Money and Banking


May 22, 2017, 9:33 am, 1749623

“… positive trends can sometimes evolve into prices that increase more than fundamentals justify.” Eric Rosengren, President and CEO, Federal Reserve Bank of Boston, May 9, 2017.

The Federal Reserve’s annual stress test is the de facto capital planning regime for the largest U.S. banks. Not surprisingly, it comes ...


May 15, 2017, 9:33 am, 1747681

Guest post by Professor Lawrence J. White, NYU Stern School of Business

Overshadowed by the media attention to the proposed repeal of Obamacare, the House Financial Services Committee recently approved substantial changes in financial regulation. The House of Representatives may soon consider the proposed bill—the Financial CHOICE Act—which would ...


May 8, 2017, 9:33 am, 1745309

With Sunday’s election of President Emmanuel Macron, voters confirmed that France remains a bedrock of the euro area, buttressing the region’s financial markets. But political risks to the euro have not disappeared. In coming months, concerns probably will turn to Italy, where the leader of one popular party has called ...


May 1, 2017, 9:33 am, 1742762

“…the ability of U.S. regulators to assume control of the resolution process may be required to elicit cooperation from non-U.S. regulators in countries where a recapitalized SIFI operates.” Jane Lee Vris, Chair, National Bankruptcy Conference, March 17, 2017

“Frankly, if we were left with a bankruptcy-code only solution [in ...


April 24, 2017, 9:33 am, 1740425

“[T]he overall ability of entrepreneurship to facilitate … economic prosperity depends disproportionately on the … performance of a very small number of new firms.” Guzman and Stern, 2016.

For at least the past 30 years, the rate of U.S. business formation has been falling and the average age of ...


April 17, 2017, 11:33 am, 1738406

“…a small reduction in liquidity from regulatory changes—even if present, which is not obvious—may be a reasonable price to pay for greater safety.” FRB Vice Chair Stanley Fischer Speech, November 15, 2016

Prior to the financial crisis of 2007-2009, many people took market liquidity for granted. So, when the ...


April 10, 2017, 9:33 am, 1736379

U.S. monetary policy is tightening, as everyone who pays even the slightest attention to the financial news knows. But when and how? Here, the discussion is focused on two complementary aspects of Federal Reserve policy: interest rates and the balance sheet. The first of these concerns policy of the old-style ...


April 3, 2017, 9:33 am, 1734408

For several years, economists and policymakers have been debating the wisdom of raising the inflation target. Today, roughly two-thirds of global GDP is produced in countries that are either de jure or de facto inflation targeters (see our earlier post). In most advanced economies, the target is (close ...


March 27, 2017, 9:33 am, 1732025

No one should be surprised that the Fed is tightening monetary policy and expects to tighten significantly further over coming years. The U.S. economy will soon enter the eighth year of its current expansion. Unemployment is less than 5 percent, consistent with normal use of resources. Inflation is ...


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 ...