Economics Roundtable

Technical Problems 1/21/15

The website was down for a day and a half, but is back up now.


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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Macro and Other Market Musings

David Beckworth.


March 2, 2015, 3:23 pm, 1431908
Paul Krugman is frustrated (my bold):

In my own case, I’d guess that about 80 percent of what I’ve had to say about macroeconomics since the crisis was prefigured in my 1998 liquidity trap paper, which was classic MIT style — a stylized little model ...


March 2, 2015, 1:23 pm, 1431825
I made the case in my last post that the Eurozone crisis was largely a monetary policy crisis. That is, had the ECB lowered interest rates sooner and begun its QE program six years ago the fate of the Eurozone would be more certain. Instead it raised ...


February 26, 2015, 1:23 am, 1429285
Imagine the ECB had not raised its interest rate target in 2008 and 2011, but had lowered it. Also imagine the ECB began its open-ended QE program back in 2009. Would there now be a brighter future for the Eurozone? If the answer is yes, then the Eurozone ...


January 9, 2015, 1:24 pm, 1401810
Long-term treasury interest rates are falling again with the 10-year treasury briefly dipping below 2% this week. Some observers see this decline in yields as an omen for the U.S. economy:

The United States economy is accelerating... Yet a huge bond market with a strong track ...


January 5, 2015, 1:24 am, 1398650
Should the Federal Reserve should eliminate cash as a way to avoid the zero lower bound (ZLB) problem? Ken Rogoff says yes in arecentpaper. John Cochrane, on the other hand, is not ready to give up cash and is convinced that even if we did it ...


December 31, 2014, 11:24 pm, 1397350
Marc Andreessen recentlylooked at the arguments for and against secular stagnation. He cited my Washington Post article when examining the case against secular stagnation. One of the points I make in it is that the proponents of secular stagnation incorrectly invoke the long decline of real ...


December 29, 2014, 11:24 am, 1395967
Paul Krugman disagrees with a point I made in my last post. Specifically, he takes issue with my claim that amonetary regime change is needed forboth monetary policy and fiscal policy to effective at the zero lower bound (ZLB). To make my case, I gave as an ...


December 26, 2014, 5:24 pm, 1395261
My last post made the argument that monetary base injections at the zero lower bound (ZLB) can be effective if they are permanent. I also noted that this understanding is a standard view in macroeconomics and that it implies the Fed's QE programs were muted from the ...


December 22, 2014, 11:24 am, 1393192
The Fed has a dirty little secret, one it has closely guarded over the past six years of unconventional monetary policy. This secret has eluded many journalists, commentators, and economists and led to ...


December 12, 2014, 5:24 pm, 1388418
Inflation-targeting central banks are in an awkward position. Their objective is to stabilize the rate of inflation, but they now face a development that could jeopardize it: the surge in oil production that is driving down oil prices. The decline in oil prices is a much-needed boon to ...