January 2014 Payroll Employment
We are getting closer to the previous peak.
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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Institutional Economics (S. Kirchner)
I will be speaking at a Finsia Industry Lunch Forum on the regulation of foreign direct investment on 28 February. Other speakers include Ian Harper, Anthony Latimer and Tony Mahar. Details and registration here.
I participated in a roundtable discussion on the Financial System Inquiry’s draft terms of reference organised by federal Treasury. Item 7 of the draft terms of reference states that:
In reaching its conclusions, the Inquiry will take account of, but not make recommendations on the objectives and procedures of the ...
I have an op-ed in the AFR on Treasurer Joe Hockey’s decision to exercise his discretion under the Foreign Acquisitions and Takeovers Act to reject ADM’s bid for Graincorp. Full text under the fold (may differ slightly from edited AFR text). As I note in the op-ed, a re-examination ...
I have an op-ed in today’s AFR on the occasion of the 30th anniversary of the decision to float the Australian dollar. This year also marks the 20th anniversary of the adoption of implicit inflation targeting by the Reserve Bank, although a formal inflation target was not adopted until ...
This week’s abolition of the local federal debt limit is a welcome development, but only because a debt limit in absolute dollar terms is not a well specified fiscal rule and was never intended to serve as such. The US debt limit, from which Australia’s took its inspiration, was also ...
John Cochrane reviews Bob Shiller’s Nobel lecture and notes that he still can’t define the idea for which he is most well known. Moreover:
In an entire lecture, Bob did not give a single concrete example of how “listening to psychologists” produces one concrete positive step to understanding “bubbles.”
Cochrane then ...
I have a new paper in the CIS Target 30 series, Strengthening Australia’s Fiscal Institutions, that re-states the case for legislated fiscal rules to be monitored and enforced by an independent statutory Fiscal Commission.
It is often argued that fiscal rules are unlikely to serve as an effective discipline ...
In January 2010, The Australian named then Prime Minister Kevin Rudd as ‘Australian of the Year’ ‘because of the way he dealt with the global financial crisis’. From affiliate EWI’s 2014 State of the Global Markets Report:
We correctly called the award a sell signal for Australian stocks - the ...
Nina Munk’s summation in her Econtalk interview is not at all surprising, but no less devastating for that:
they were now really living in a kind of squalor that I hadn’t seen on my first visit. Their huts were jammed together; they were patched with those horrible polyurethane bags that ...
I have an op-ed in today’s Australian beating the housing supply drum at the expense of the anti-negative gearing brigade. In particular, I address the argument that demand for investment property is largely met through existing rather than newly built dwellings:
This reflects the fact that the flow of new ...