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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Stumbling and Mumbling

"An extremist, not a fanatic”

July 27, 2017, 10:36 am, 1766445

One of the most elementary distinctions in economics (and in life) is that between instruments and objectives. Interest rates, for example, are only an instrument whereas the objectives are price and output stability. I fear, though, that this distinction is being overlooked by those Brexiters aroused by what ...

July 26, 2017, 10:35 am, 1766033

Actor Tom Chambers has caused a row by claiming that “many men's salaries aren't just for them, it's for their wife and children, too." As a justification for the gender pay gap, this is lousy. But there’s a core of truth in what he says.

July 25, 2017, 8:35 am, 1765630

“Should we pension off the state pension?” asks Robert Colville. The answer is: emphatically no. Quite the opposite. There’s a case for increasing it.

Robert is right that the cost of the state pension will rise over time. The OBR expects it to rise from ...

July 22, 2017, 8:35 am, 1765024

One curiosity of the row over top BBC pay has been the attempts of past and present BBC bosses to defend high pay by invoking “the market”. “There is a market for Jeremy Vines, there is a market for John Humphrys” says James Purnell. “We operate ...

July 21, 2017, 8:35 am, 1764754

Is actually-existing capitalism a fair or a rigged game? The answer matters a lot for attitudes towards redistribution, as some recent experiments by Matthias Sutter and colleagues show.

They got people to choose between a safe investment and a risky one. After the pay-off to the ...

July 20, 2017, 8:35 am, 1764429

“We’ve got to reverse QE and do so quickly” says Tim Worstall. I don’t want to take a view on that. What interests me instead is that reverse QE might be a misnomer, because central banks selling bonds doesn’t have the same effects as them buying bonds. ...

July 19, 2017, 10:35 am, 1764141

The BBC’s publication of a list of its best-paid talent has triggered many subjective views on who’s overpaid. But there’s another issue here, namely: how can we understand what’s going on?

The natural framework for doing so is a bargaining model. This says that pay depends ...

July 18, 2017, 10:36 am, 1763827

John Rapley’s claim that economics has become a religion has kicked off another debate about the state of economics.

For me, there seems to be a presumption here which both sides seem to share but which I don’t – or at least that ...

July 17, 2017, 10:36 am, 1763498

Much as I like this piece by Ian Leslie, there’s something I disagree with. It’s this:

Almost as a blanket rule, don’t bash the BBC…The BBC is about the only thing standing between post-Brexit Britain and a Trump-style reality-free culture war.

He has a point, ...

July 16, 2017, 8:35 am, 1763311

It’s become common to demand that Labour take a clearer stand against Brexit. Such demands, I fear, forget Wittgenstein’s point – that a clear picture of a fuzzy thing is itself fuzzy.

I say this because there is a genuine dilemma here. On the one hand, ...