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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Macro and Other Market Musings

David Beckworth.

April 17, 2015, 5:23 pm, 1457467
This week we learned that Ben Bernanke does not view NGDP level targeting, price level targeting, or a higher inflation target as the best way to deal with the zero lower bound (ZLB) problem. Now I believe the "what to do at the ZLB" debate is becoming ...

April 3, 2015, 7:23 pm, 1450441
So what exactly did the Fed's large scale asset purchases (LSAPs) of treasury securities accomplish? The first figure below indicates these LSAPs raised long-term treasury yields. That is, the 10-year treasury interest rates appears to have increased during the periods when the Fed was buying up treasury securities ...

March 31, 2015, 9:23 pm, 1448738
Former Fed chair Ben Bernanke blogged about secular stagnation today and he's not buying it:

Does the U.S. economy face secular stagnation? I am skeptical, and the sources of my skepticism go beyond the fact that the U.S. economy looks to be well on the ...

March 30, 2015, 9:23 pm, 1448027
Ben Bernanke is back and mulling over low interest rates. From the Washington Post:

Blogging isn't dead. At least, Ben Bernanke, former chairman of theFederal Reserve, doesn't think so: He's now blogging at the Brookings Institution. Inhis first post,he says he wants ...

March 29, 2015, 1:23 am, 1447093
Paul Krugman says yes and yes:

The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out ...

March 27, 2015, 5:23 pm, 1446708
Just a quick note on whether the Fed should raise interest rates later this year. One concern that many observers have with the Fed tightening is that nominal wage growth has yet to show any signs of accelerating. They often point to the employment cost index which ...

March 19, 2015, 11:23 am, 1442089
Ramesh Ponnuru has an article in the National Review where he revisits the 'test' of Market Monetarism put forth by Paul Krugman and Mike Konczal in 2013. Here is Ramesh:

The story begins in late 2012. The Federal Reserve ...

March 9, 2015, 1:23 am, 1435713
On Friday I was interviewed by Erin Ade on Boom Bust. We discussed why the Eurozone is not an optimal currency area--low labor mobility, limited fiscal transfers, differing regional business cycles--and why this means a one-size-fits all monetary policy is bound to make problems for this monetary ...

March 5, 2015, 7:23 am, 1433978
Source: Greg Ip
After six years of low interest rates many yields are now crossing the zero percent boundary. Interest rates in Europe ...

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 ...