# 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.

**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 .

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.

**EconModel**

The Economics Roundtable is sponsored by **EconModel.**

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

## EconWeekly

"Economic analysis of current issues, every Friday.” Francisco M. Torralba.

Green (red) means lower (higher) inflation. The color scale is meaningful within rows only. So, for example, the deep-green that the ...

(Hat tip to an old colleague and accomplished investment manager P. M. - I'm not sure I can say his name, since I got his pointer through LinkedIn.)

$$g_t = 0.839 + 0.02499 b_t + e_t, $$

an equation that comes from an OLS regression of weekly prices ...

In the

I define a "surprise" as the difference between the 2014 forecast in December (which should be close to the actual outcome) and the 2014 forecast in January (the one-year ahead forecast). (The data ...

**2014 in review: "conventional wisdom" predictions that did happen, and fears that didn't materialize**

1. The Fed tapered asset purchases and ended the quantitative easing program by October.

2. China staged a soft landing, holding growth above 7%.

3. The eurozone's recovery from the recession was slow and uneven. (Here I must say, however, that the majority ...

Forecast the real total return of U.S. equities over the next ten years. Show your work. Time: two hours.

I wrote down a decomposition of the total return into three components: