Technical Problems 1/21/15
The website was down for a day and a half, but is back up now.
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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"Who would have thought an economics blog could be this exciting?”
Like Greek bonds. Dumb question of the day.
"Because risky assets are risky!" is not the answer.
Other things equal, I would prefer to hold a safe asset than a risky asset, because I don't like risk. But other things are not equal, precisely because other people don't like holding risky assets ...
Last week the Bank of Canada cut the overnight rate of interest from 1.00% to 0.75%. The exchange rate dropped 2 cents (about 2.5%) on the news.
Consider a very simple economy with only two goods: apples and bananas. It's a non-monetary economy; apple producers and banana producers swap apples and ...
Here's a question for you: Suppose there is a permanent increase in monopoly power across the economy (either firms having more monopoly power in output markets, or unions having more monopoly power in labour markets). Would that permanent increase in monopoly power cause a permanent increase in the inflation rate?
As Ontario moves into budget season, it is instructive to take a quick look at the finances to date as revealed in the most recent Ontario Economic Outlook and Fiscal Review which was presented November 2014.† Ontario‚Äôs aim then as no doubt now was to have the budget balanced by ...
Take a very standard New Keynesian macroeconomic model. The two key ingredients (the only ones that matter for this post) are: monopolistically competitive firms; the Calvo Phillips Curve. In that model, if there are no macroeconomic shocks, the equilibrium level of output and employment is below the efficient level of ...
Samuelson 1958 (pdf) built an overlapping generations model in which intrinsically worthless green bits of paper have positive value.
It is possible to build a mirror-image of Samuelson's model in which intrinsically worthless red bits of paper have negative value.
My model actually makes more sense. Because any ...
How come no economist on the right is asking "Where are the Galbraiths of yesteryear?"? It's because Milton Friedman won the debate, and John Kenneth Galbraith lost. Both Friedman (on the right) and Galbraith (on the left) were once leading public intellectuals and economists. I used ...
Suppose Statistics Canada reports the latest inflation data, and I am surprised to learn that inflation is lower than I had expected it to be. Or below the Bank of Canada's 2% target. Is that good news or bad news?
For most of my life I would have said that is ...
It looks like the respite from falling oil prices for consumers at the pump has finally attracted the attention of government.† Ontario Premier Kathleen Wynne has been reported as saying Ontario will unveil a carbon-pricing scheme this spring.† While the idea of a carbon tax in Ontario has ...
Tony Yates complains that Market Monetarists don't have a model to justify their support for NGDP targeting. So I decided to build him a little model. It's a cruddy little one-period model, and it's really only a sketch of a model, but any competent grad student should be ...