Economics Roundtable

January 2014 Payroll Employment

We are getting closer to the previous peak.

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 18, 2014, 9:23 pm, 1257711
What do you see in this figure from a recent New York Fed study?  
Technically, it shows that the Fed's balance sheet ...

April 7, 2014, 7:23 pm, 1252087
Michael Darda of MKM Partners makes the case that concerns over financial stability are overblown and miss the forest for the trees. Consequently, he worries that the Fed may be pulling back too soon. 

[I]t is not at all clear that 1) risk premiums ...

March 30, 2014, 11:23 pm, 1248230
A number of Fed watchers see the last FOMC meeting signalling a tightening of monetary policy.  Tim Duy, for example, sees it in the FOMC's effective lowering of its inflation target via the dropping of the Evans Rule:

[A] hawkish interpretation... starts with the end ...

March 28, 2014, 7:23 pm, 1247838
Yesterday, I was interviewed by  Erin Ade for the show Boom Bust. She asked me, among things, whether I believed money was endogenously created. If so, was my belief consistent with Market Monetarism? My answer was that inside money creation--money created by banks and other financial ...

March 27, 2014, 5:23 pm, 1247214
One of the defining features of U.S. monetary policy over the past five years has been its incredibly ad hoc nature. Over this time, the FOMC has conducted monetary policy with a spate of make-it-up-as-we-go-along programs (QE1, QE2, Operation Twist, QE3, and the Evans Rule) that it hoped ...

March 21, 2014, 7:23 pm, 1244444
Joshua K. Hausman and Johannes F. Wieland presented a paper today on Abenomics at the Brookings Panel on Economic Activity. They focus specifically on the monetary policy portion of Abenomics: the Bank of Japan's new commitment to 2% inflation, open-ended asset purchases, and a doubling of the ...

March 12, 2014, 1:23 pm, 1239482
In my last post I showed a figure that suggested the Fed has effectively been targeting a 1-2% core PCE inflation range target. If so, it would be consistent with the observations made by Ryan Avent and Matthew Yglesias that the Fed ...

March 12, 2014, 11:23 am, 1239393
A common mistakes observers make when assessing economic policy is that they fail to do the counterfactual of no policy. That is, they fail to consider what the economy would have been like in the absence of the policy. This often happens ...

March 5, 2014, 5:23 pm, 1235996
I recently reviewed Lewis E. Lehrman's book, Money, Gold, and History for the National Review. This book is a compilation of his essays where he calls for a return to an international gold standard. He takes a very sanguine view of its history and how it ...

March 2, 2014, 9:23 am, 1233909
In my last post I showed that the second half of 2008 was when an ordinary recession got turned into the Great Recession. Starting about July, 2008 market sentiment began to significantly deteriorate as the economic outlook got markedly worse. Consequently, total dollar spending starts falling in ...