May 2014 Payroll Employment
After 76 months, we finally got back to the prerecession level of payroll employment.
Click on the image to get a bigger version.
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 .
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.
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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Stumbling and Mumbling
"An extremist, not a fanatic”
In my previous post, I pointed out that, given the inflation target, a less tight fiscal policy implies higher official interest rates. This means that the choice between the two main parties isn't just about fiscal policy, but about the fiscal-monetary mix: Labour offers looser fiscal and tighter* ...
I fear that the argument between Robert Peston on the one hand and Simon, Paul and Alex on the other about the relationship between government borrowing and interest rates is understating something important.
I agree ...
Alex is right:
The debate over the economy occurring within the Westminster bubble may now have become completely detached from anything that is happening in what the rest of us would recognise as the economy...The everyday “reality” as it is experienced by the rest ...
One of the oldest and best-attested cognitive biases is the illusion of control - our tendency to over-estimate our ability to control events.Ed Miliband's speech on the deficit was an example of this bias.
He omitted to state what should be obvious, that ...
Neal Lawson is absolutely right. Social democracy is "hopelessly prepared for the 21st century."
This is because it is yet another example of an idea that has outlived its usefulness. Social democrats used to think that they did not need to challenge ...
Ryan Bourne said this morning on Twitter:
Inequality puff pieces and junk papers just can't answer a simple question: how does a larger gap of outturn income reduce productivity growth?
Here are some possible mechanisms.
1. Inequality might demotivate poorer-paid employees because they look to ...
"How Darwinian should an economy be?" asks Gilles Saint-Paul.
Econ 101 says: maximally so. If competition is fierce only efficient firms will survive and so we'll achieve an optimum allocation of resources. That's the first theorem of welfare economics.
However, there's ...
I have been watching Chancellors professionally for 25 years. During this time I've seen Budgets and Autumn Statements cheered and jeered by economists. But never have I known one to be greeted with as much incredulity as Osborne's effort on Wednesday. I've had numerous emails from City economists ...
You wouldn't guess from his performance yesterday, or from most of the mediamacro coverage of it, but there's one big fact about Osborne's Autumn Statement: it confirmed that austerity has failed in its own terms. Back in 2010, the OBR forecast that PSNB in 2014-15 would ...
Gordon Brown's resignation as an MP has prompted many retrospectives. I suspect, though, that they are mostly misdiagnosing his strengths and weaknesses.
First, his strengths. I agree with Jonathan that he deserves credit for keeping us out of the euro and for his ...