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.


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Worthwhile Canadian Initiative

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

June 30, 2016, 9:35 am, 1649802

Imagine you are at an international policy conference. Someone says "Central Banks need to coordinate their monetary policies better". You nod your head wisely in agreement, along with everyone else. Because you know that what one central bank does affects not just its own economy but the economies of other ...

June 21, 2016, 9:34 am, 1647145

To: Generation X, Generation Y and Millennials

From: The Baby Boomers

Re: Pension Savings 

Date: June 21, 2016

It has come to our attention that you are not saving sufficiently for your retirement. This does not surprise us. We haven't saved sufficiently for our retirement either. Some of us have made enough money in the housing ...

June 20, 2016, 9:34 pm, 1647004

Roger Farmer always has done interesting and different stuff. We need economists like that. But it's risky of course. What I'm trying to do here is articulate something that makes me uneasy about his recent line of macro theorising. Like his simple model here with Konstantin Platanov (pdf).

Consider ...

June 17, 2016, 9:34 am, 1646241

The Modigliani Miller Theorem says that a firm's financing policy is irrelevant. It's wrong of course, but it's a good place to start thinking about firms' financing policies.

It would be presumptuous to talk about an Irrelevance "Theorem" for Basic Income. The math is trivial, and the economics is obvious. (And ...

June 7, 2016, 11:34 am, 1643313

Let me start out with an extreme (and very silly) assumption, just so I can explain something simply. Assume that the demand for currency does not depend on the price level, nor on real income, nor on interest rates, nor on anything. It's just fixed. Every individual wants to hold ...

June 5, 2016, 1:34 pm, 1642686

I read Olivier Blanchard on how to change the ISLM model in response to the recent recession to teach Intermediate Macro better. And I despaired.

Not because he says anything daft, but precisely because what he says seems so sensible a set of minor modification. But it's a set ...

June 3, 2016, 5:34 pm, 1642447

Today I'm presenting a paper at the meetings of the Canadian Economics Association: "Bargaining power and the incidence of taxes on high earners in Canada." The bottom line is that once you take into account the fact that high earners have bargaining power - that's why they are high earners ...

May 26, 2016, 9:35 am, 1640062

Just a simple "teaching" post.

There are two different ways of thinking about central bank profits (of doing the accounting). A simple numerical example will illustrate the difference.

Assume 2% inflation, and 1% real GDP growth, so Nominal GDP grows at 3%. Assume the stock of currency is 5% of annual NGDP. ...

May 25, 2016, 7:34 am, 1639641

Let's do a back-of-the-envelope calculation. Assume a 5% currency/Nominal GDP ratio. Assume the government/central bank wants to use helicopter money to permanently raise the level of NGDP by 5% above what it would otherwise be. So the stock of currency will be permanently higher by 0.25% of NGDP. And assume ...

May 24, 2016, 9:34 am, 1639315

It is of course useful from time to time to take a look at the longer-term picture when it comes to health spending especially given that there is a slowdown in health expenditure growth. Figure 1 plots per capita total health expenditure in US PPP dollars from 1960 to 2014 ...