Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

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Jobs

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 .


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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?”


August 31, 2015, 11:33 pm, 1537047

What is the difference between:

A. I print $100, and give it to you as an interest-free loan.

B. I print $100, lend it to you at 5% interest, so you give me $5 per year, and then I give that $5 per year straight back to you.

C. I print $100, lend ...


August 30, 2015, 7:33 pm, 1536412

Wisconsin Governor and potential presidential candidate Scott Walker apparently thinks it is not an unreasonable idea to consider building a wall between Canada and the United States in order to secure his country’s borders from security threats.  Now, to be fair, he did not say that a wall ...


August 29, 2015, 9:33 am, 1536128

Well it is just over two weeks since I began tracking the number of Twitter followers that each federal party leader has during the course of the current election capmpaign in order to see what the impact of this type of social media presence might be.  All of the party ...


August 29, 2015, 9:33 am, 1536127

I normally stay out of politics on this blog. But with the upcoming election, the political conversation on fiscal policy is starting to get stupid. In particular, for Paul Martin to accuse Stephen Harper of being the "King of deficits" was really stupid.

Is there anything Stephen Harper could have done ...


August 26, 2015, 9:33 am, 1534394

Alex Usher at Higher Education Strategy Associates had a great post on his One Thought Blog today dealing with policy-making and change.  His comparison to policy-making in Ottawa as a slow stately moving river compared to Washington's high-pressure ice jam was pretty entertaining - he only left out ...


August 21, 2015, 11:33 am, 1532286

Just because a shock is a bad shock doesn't mean it should cause a recession. A recession is a monetary coordination failure. Monetary coordination failures are caused by monetary policy.

Start with a Robinson Crusoe economy. By assumption, Robinson Crusoe always allocates his resources perfectly to maximise his expected utility given ...


August 18, 2015, 7:33 am, 1530153

In both 1996 and 2008 the Canadian economy was hit with a big shock. The 1996 shock was the change in fiscal policy, turning a large deficit into a large surplus. The 2008 shock was the global financial crisis. (Canada didn't really have much of a financial crisis; no banks ...


August 14, 2015, 11:33 am, 1528600

I think Larry Summers is wrong, on a point of theory. He commits a fallacy of composition. (That's a brave way to start the day.)

He says (HT John Cochrane):

"Businesses will raise wages to a point where the cost is just balanced by the reduced bill for ...


August 13, 2015, 5:33 pm, 1528113

Well, I thought it was time to resurrect an activity I last did a number of years ago – in 2011 - during an Ontario election campaign.  I tracked the number of Twitter followers each party leader had during the course of the election to see if the electoral outcome ...


August 12, 2015, 11:33 am, 1527168

This post covers the same ground as my previous post, but it's written for a different audience. It's written for those people who approach monetary policy from a banking/finance perspective.

Suppose you are running a commercial bank. Let's call it "BMO". And let's simplify massively. On the asset side ...