Economics Roundtable

March 2017 Fed Funds Rate

What is the effect of a 0.25% change in the Fed Funds rate?.

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March 2017 Payroll Employment

Payroll employment has not grown impressively since 2000. Some baby-boomers retired, but that does not totally account for this graph.

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May 2014 Payroll Employment

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

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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 …

September 19, 2016, 12:44 am, 1676279
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 ...

September 19, 2016, 12:44 am, 1676280
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 ...

September 19, 2016, 12:44 am, 1676261
In a blog post a couple of weeks ago, Paul Krugman presents a scatterplot of the change in the inflation rate (y) as a function of the output gap (x), with the following regression line:

y = 0.5228 x - 0.4739

I'm puzzled as to why he includes ...

September 19, 2016, 12:44 am, 1676263
If you believe in a NAIRU, or anything remotely like a NAIRU or an accelerationist Phillips curve, the prognosis for prices is looking increasingly ugly. For those who believe confidently in such a Phillips curve and accept historical estimates of the parameters, deflation is now a certainty, and ...

September 19, 2016, 12:44 am, 1676260
Reading Karl Smith’s comment on my previous entry, I started to think about the implications of rational expectations in the context of potential deflation. I’m thinking of a model like “Rational Expectations meets Calvo Pricing meets the Keynesian Multiplier meets the Mundell-Tobin Effect.” It goes something like ...

September 19, 2016, 12:44 am, 1676262
Yeah, it's not just "good for you"

Here's how things stand: the stimulus bill is way too small, it's floundering in the Senate, and we stand possibly on the edge of a deflationary abyss.

Solution: find, say, the 5 most wavering Republican senators and offer ...

September 19, 2016, 12:44 am, 1676258
It certainly seems to be functioning as an effective spam collector.

Maybe I should actually try posting something again.

September 19, 2016, 12:44 am, 1676256
OK, so I decided to do a substantive post – something I haven’t done in a while because this blog has fallen into the category where, if I have the time and energy to do this, then I also have the time and energy to do something more useful, so ...

September 19, 2016, 12:44 am, 1676257
But then why is it letting me make this post?

UPDATE: OK, it seems to have reappeared. Maybe Google temporarily "deleted" it because I hadn't logged in since they changed their privacy policy? Or maybe they are in the process of deleting it and some things ...

September 19, 2016, 12:44 am, 1676259
It appears now that the G-20 intend to make their compromise with the devil. That’s pretty much inevitable, since the devil is one of them. When I say the devil, I am of course referring to the nation that invented the automobile (hint, President Obama: not the ...