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?”

December 19, 2014, 9:33 am, 1392090

With one exception, Tony Yates strikes me as being a very sensible and very good money/macro economist. But at the mention of "helicopter money", he seems to turn into an Old Testament prophet, or maybe Private Frazer from Dad's Army, saying "We're doomed, I tell ye!" ...

December 19, 2014, 5:33 am, 1391982

This is (supposed to be) a simple "teaching" post. There should be nothing new here. Just a newish way of presenting old stuff. The more interest-elastic the demand for money, the more important ...

December 17, 2014, 11:33 am, 1390802

Central banks issue currency. (They issue reserves too, but "reserves" are just the name we give to central bank currency held by commercial banks in electronic form rather than in paper form, and it makes no difference whether money is printed on paper, on plastic, or on computer disks.) Commercial ...

December 15, 2014, 3:33 pm, 1389467

In putting together my material for my fiscal federalism course next term, I decided to take a look at some health spending figures for the OECD countries in order to compare federal with non-federal countries.  Federal structures generally try to combine the economic advantages of a more centralized state with ...

December 14, 2014, 11:33 am, 1388853

[Apologies for the title. It's a Canadian joke, about our fixations, that can be told various ways, but always ends with the punchline: "Elephants: a federal or provincial issue?"]

Does fiscal policy affect the price level? If so, are we talking about federal fiscal policy only, or are we ...

December 13, 2014, 9:33 am, 1388595

Think back to philosophy class:

Would you ever believe the promise of an Act-Utilitarian? No. An Act-Utilitarian will perform action A if and only if action A will maximise the sum of expected present and future utilities. His past act of having promised to do A is not a reason for ...

December 11, 2014, 3:33 pm, 1387649

If you understand the title you understand the post. It's obvious really. Betas peg their exchange rate to alphas; alphas do not peg their exchange rates to betas. Beta's promise to redeem their liabilities for alpha liabilities at a fixed exchange rate; alphas make no such promise the other way. ...

December 10, 2014, 11:33 am, 1386730

Consider a corporation that earns a flow of (real) profits S(t). Assume for simplicity the corporation finances itself by issuing only shares (it does not issue bonds). Let the stock of shares be M(t). Let the reciprocal of the share price be P(t), so the share price is 1/P(t), and ...

December 7, 2014, 7:33 am, 1384665

Suppose you hire an agent to do a job. The agent's level of production p depends on the agent's effort m and on a mean-zero shock from nature s. So p = m + s. You observe p, but you do not observe m or s. Your agent observes s ...

December 6, 2014, 5:33 pm, 1384573

We don't normally publish our failures. But perhaps we should. Because we can (sometimes) learn as much from our failures as from our successes.

Academic economists spend a lot of time trying to model things. One reason we do this, and a good reason for doing this, is as a check ...