Economics Roundtable

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 .

Click on the image to get a bigger version.

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?

Click on the chart for a larger version.


The Economics Roundtable is sponsored by EconModel.

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Worthwhile Canadian Initiative

"Who would have thought an economics blog could be this exciting?”

May 2, 2016, 5:34 am, 1631992

David Andolfatto has a very good post on "Monetary Policy Implications of Blockchain Technology". In passing (it's not a central point of his post), David says:

"However, it's worth pointing out that the leading economic theory of bank sector fragility, the

April 22, 2016, 11:34 am, 1629093

At the risk of being thought "cavalier", I don't like what Bank of Canada governor Stephen Poloz is reported as saying by Kevin Carmichael.

Inflation targeting is supposed to be inflation forecast targeting. The Bank of Canada is supposed to do what is needed to ensure that its own ...

April 16, 2016, 3:34 pm, 1627269

As we all know, Canada will be running deficits well into the foreseeable future.  Based on the figures from the 2016 Federal Budget, as a percentage of GDP Canada will see its deficit go from a surplus of 0.1% in 2014 to -1.5% in 2016 and then will range from ...

April 14, 2016, 9:34 pm, 1626861

I read Steve Williamson's new post. I could try and poke holes in his modelling. But it would be pointless, like a high-school debate. The disagreement is much more fundamental. I hope this is more constructive.

Inflation doesn't just happen. In a New Keynesian model, individual firms choose how ...

April 12, 2016, 9:34 am, 1625881

The central bank prints money, lends it to the government, and the government sooner or later spends it (or uses it to cut taxes or increase transfer payments).

There seem to me to be two views on this question that are equally daft:

The Orthodox Daft View: "Central bank lending to government ...

April 10, 2016, 11:34 pm, 1625376

WARNING: I don't do (micro) Public Finance. And I don't do experimental economics. Those who have read the literature may tell me they are well aware of these problems, or that I'm wrong about something.

Suppose someone asked me to design an experiment to test whether Basic Income would be a ...

April 7, 2016, 9:34 am, 1624668

Accounting can be fun.

Helicopter Bonds is when the government prints some bonds and drops them out of a helicopter, so whoever picks up the bonds now owns them. It's identical to a bond-financed lump-sum transfer payment. It's identical to a bond-financed lump-sum tax cut (because only net taxes=taxes-transfers matter). The ...

April 3, 2016, 9:34 pm, 1623427

The shocks in a random walk process are permanent. That does not mean it is impossible for a positive shock to be followed by a negative shock. It does mean it is equally likely that a positive shock will be followed by a positive shock as by a negative shock. ...

April 1, 2016, 5:34 am, 1622915

Just a thought-experiment that's been running through my head.

You are a saver and lender. You take some of the money you have earned as income, that you don't want to spend yourself, and lend it to people who want to borrow so they can spend it instead of you. Suppose ...

March 30, 2016, 9:34 pm, 1622477


If Canada's Employment Insurance program was designed solely to insure workers against the loss of employment, it would look very different.

For one thing, the premiums that employees and employers contribute would go towards paying benefits to people who have lost their jobs. But in 2013/14 - the most recent year for which I can ...