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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Economics and …


July 2, 2014, 10:44 pm, 1294779
(My apologies to those with religious dietary restrictions...and to those who hate the letter P)

Greg Mankiw's hypothetical alliterative stimulus critic worries that the stimulus package will be "pointless, political, and pork-filled." Perhaps. But it's hard for this person to perceive how a proposal that is ...


July 2, 2014, 10:44 pm, 1294780
Why? Because the government gets to pay with monopoly money and get paid back with real money.

Right now, with the T-bill rate at approximately zero, the Fed can effectively create an unlimited amount of money to finance the government. No matter how many T-bills the Fed ...


July 2, 2014, 10:44 pm, 1294781
Here's my Monday evening quarterbacking. They should have guaranteed Citigroup's liabilities (in other words, extending deposit protection to other types of creditors and to large depositors) rather than its assets. (Perhaps nobody had the authority, but Congress should give them that authority now in case the same thing ...


July 2, 2014, 10:44 pm, 1294782
Before the Treasury decided to start issuing TIPS, I was a strong advocate for inflation-adjusted bonds. At the time, I felt that people were overly concerned with inflation. (That was the mid-90’s, and I think subsequent experience bore out that opinion.) I thought that the government should ...


July 2, 2014, 10:44 pm, 1294778
In my last post I argued

...the general purpose of stimulus packages is to mobilize the economy's unused resources, and, in this particular case, to...prevent prices from plummeting. Does the presence of pork in a package...in any way hinder the pursuit of such purposes? As far as the deflation ...


July 2, 2014, 10:44 pm, 1294777
I admit I supported Barrack Obama in both the Democratic primaries and the general election. I still think he’ll make a better president than either John McCain or Hillary Clinton would have. And I think he’s quite an intelligent person, with a reasonable layman’s understanding of economics. ...


July 2, 2014, 10:44 pm, 1294774
Just a quick thought. Ben Bernanke suggested today that the Fed might start buying longer maturity Treasury securities now that it has done about all it can at the short end of the yield curve. Sounds like a good idea, but here's my question: If reducing yields ...


July 2, 2014, 10:44 pm, 1294775
I put together a series for commodity prices as measured by various CRB indexes. Since there have been a couple of new CRB indexes introduced at certain times, and the new indexes have each eventually supplanted the earlier version, I patched together a series going back to 1950 using ...


July 2, 2014, 10:44 pm, 1294776
I’m not saying it will happen, or even that it’s likely. As a matter of fact, if you offer me less than 6:1 odds, I won’t even consider a bet on deflation, even taking into account its hedge value (since deflation is likely to be associated with bad real ...


July 2, 2014, 10:44 pm, 1294773
For Sepetmber 2008, the monetary base was reported at $903.5 billion. For October, it was reported at $1.1285 trillion. That's an increase of $225 billion. That's how much money the Fed created directly in one month. A couple of months of that would be enough to ...