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?


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EconModel

The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.


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Worthwhile Canadian Initiative

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


September 29, 2016, 7:34 am, 1679483

You are driving a car with rear-wheel steering and no reverse gear. You are driving alongside a wall. If you drive too close to the wall you are trapped, because you would need to steer your rear wheels into the wall in order to get your front wheels to move ...


September 27, 2016, 1:33 pm, 1678956

Once upon a time,canals werethe latest thing ininfrastructure investment. During the early years of the Industrial Revolution, they made it possible to move heavy goods, ...


September 25, 2016, 7:33 am, 1678312

How can the Cheshire Cat disappear, but its smile remain?

How can money disappear from a New Keynesian model, but the Central Bank still set a nominal rate of interest and create a recession by setting it too high?

Ignore what New Keynesians say about their own New Keynesian models ...


September 20, 2016, 1:33 pm, 1677036

One really has to wonder if having the season move into “fall” is correlated with the fall of the financial sector. While some time in the making, the 2007-08 subprime financial crisis moved into crisis mode during August of 2007 and by early fall central banks had moved to ...


September 15, 2016, 3:34 pm, 1673330

The central bank is on the Gold Standard. The discovery of new gold increases the supply of gold, which causes an inflationary boom. People blame the inflationary boom on the gold discoveries. It can't have been a monetary shock, because the central bank wasn't doing anything different from what it ...


September 15, 2016, 5:34 am, 1673136

Suppose I want to borrow money. So I issue a financial asset I call "NRUnits". You can buy NRUnits from me at $1 each.

I consider two different policies to give people sufficient incentive to want to hold NRUnits:

I promise to peg the exchange rate between NRUnits and the dollar, so ...


September 11, 2016, 1:34 pm, 1671966

Because "stock-flow consistency" makes me think of money. [Here's Simon Wren-Lewis' and Jo Michell's good posts, but I've got a one-track mind.]

1. If you want to increase the stock of land in your portfolio, there's only one way to do it. You must increase the flow of ...


September 5, 2016, 5:34 pm, 1670323

At the Green Door restaurant, customers line up, take a plate, then fill it with their choice of items from the restaurant's vegetarian buffet. At the cash each plate is weighed, and the customer's bill is calculated: price per gram*grams of food taken=cost of dinner.

This pricing scheme creates an interesting ...


September 3, 2016, 5:34 pm, 1670004

Unless it has a massive endowment fund, a university's biggest asset is its reputation. If it loses its reputation and students stop coming and paying, a university has only got a bunch of buildings that often aren't well-suited for any alternative use.

That asset is not on the books.

Unless it has ...


August 31, 2016, 1:34 pm, 1669184

A New Keynesian central bank considers two alternative policies to mitigate the risk of hitting the Zero Lower Bound:

Raise the inflation target from 2% to 3%. Announce a crawling peg exchange rate between the paper money it issues (currency) and the silicon money it issues (reserves), so that paper depreciates at ...