Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, but is back up now.

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.


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.


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

April 20, 2015, 11:23 am, 1458304
Jérémie Cohen-Setton at Bruegel does a great job, as usual, rounding up recent blog posts on a specific topic. This time: a critique of modern macro. Can the models built during the Great Moderation explain what happened after the Great Recession?

I would say that ...

April 17, 2015, 1:23 am, 1456930
Financial stability has been a bubbling topic since 2008--although it never really stopped simmering since the emerging market crises of the 1990s. Over the past year or so, a dominant view seems to be forming that financial instability risks are rising, particularly among some emerging-market countries.

Here's a list ...

April 10, 2015, 11:23 pm, 1453686
Fulcrum's nowcasting model shows that advanced economies have decelerated so far in 2015:

The slowdown is particularly persistent in the U.S., which is now estimated to be growing at 2% a year, ...

April 2, 2015, 11:23 am, 1449788
Naomi Fink, CEO and founder of Europacifica Consulting, is my guest today, writing about the risk preferences of Australian investors.

In one of the preliminary documents leading to Australia’s Financial System Inquiry, authors speculated that the abundance of overseas financing for Australia might ...

March 27, 2015, 9:23 am, 1446407
Last week I started writing up a quick (?) methodology to forecast equity returns. Specifically, the question was

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:

March 25, 2015, 1:23 pm, 1445207
1. Why do central banks use the New Keynesian model?, by Simon Wren-Lewis.

What is a NK model? It is a RBC model plus a microfounded model of price setting, and a nominal interest rate set by the central bank. Every NK model has its inner RBC ...

March 20, 2015, 3:23 pm, 1442917
Suppose you are given the following task:

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

This post describes how I would go about fulfilling this assignment.

The first thing is to define total ...

March 13, 2015, 9:23 am, 1438841
Global labor productivity is not slowing down; but it is slowing down, in many countries.

I have been playing with the labor productivity statistics from the Conference Board's Total Economy Database. Labor productivity is defined as real, PPP-adjusted GDP per person employed --using Geary-Khamis purchasing power parities. ...

March 4, 2015, 9:23 am, 1433294
The Reserve Bank of India is officially an inflation targeter. The agreement between the Ministry of Finance and the RBI was signed on February 20, and published a few days ago. The target is to "bring inflation below 6 per cent" by January 2016. For financial year 2016-17 ...

February 27, 2015, 9:23 am, 1430363
No time for writing this week, so I'm listing blog posts and articles that caught my eye recently:

1. Liftoff levers. John Cochrane is doing a fantastic job explaining how the Fed's reverse repo operations are supposed to work. Start with this post, and then read