Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

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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.

February 8, 2016, 1:23 pm, 1606442
Ramesh Ponnuru and I respond to the critics of our New York Times op-ed over at Bloomberg View:

Bold theses should receive skeptical reactions, and ours did. We argued in the New York Times that, contrary to what just about everyone believes, the ...

February 3, 2016, 7:23 pm, 1605098
Here is an interesting take on the Fed's December mistake by Jed Graham:

Janet Yellen’s Federal Reserve has done something that no other Fed has done since Paul Volcker aimed to quash runaway inflation in the early 1980s, even if it meant a recession — ...

February 1, 2016, 1:23 pm, 1604159
Many observers are now viewing the Fed's decision in December to raise interest rates as a "policy error". With volatility in financial markets, falling commodity prices, and a fourth quarter slowdown many believe the Fed got ahead of the recovery with the December interest rate hike. Some ...

January 27, 2016, 7:23 am, 1602464
Ramesh Ponnuru and I have an Op-Ed in today's New York Times:

IT has become part of the accepted history of our time: The bursting of the housing bubble was the primary cause of a financial crisis, a sharp recession and prolonged slow growth. The story ...

January 26, 2016, 11:23 pm, 1602353
I have noted manytimeshere how the Fed's treats its 2% inflation target as more of a ceiling than a symmetric target. Apparently, the ECB is even more brazen in its asymmetric interpretation of its inflation target(my bold):

The ECB has got itself into ...

January 25, 2016, 11:23 am, 1601754
Probably the most common explanation for the Great Recession is the "balance-sheet" recession view. It says households took on took on too much debt during the boom years and were forced to deleverage once home prices began to tank. The resulting drop in aggregate spending from this deleveraging ...

January 20, 2016, 3:23 pm, 1600534
Former Fed Minneapolis Fed President Narayana Kocherlakota believes macroeconomic policy has been overly tightthe past few years.Consequently, he thinks the Fed isgetting ahead of the recoverywith its current tightening cycle.Is he right, has macroeconomic policy really been overly tight? To answer this question, consider the four ...

January 14, 2016, 11:23 pm, 1599053
I have a new op-ed at Investors' Business Daily on the Fed's increasing use of the natural interest rate to guide monetary policy.

The Fed began a new chapter in its history in December by raising interest rates for the first time in almost a decade. ...

December 15, 2015, 1:23 am, 1590955
So it is finally time for lift off. The Fed is poised to raise short-term interest rates over the next few days after seven long years of ZIRP. Exciting as this development may be, it is important to keep in mind that the guiding principle behind the Fed's ...

December 14, 2015, 1:23 am, 1590352
What has the 'monetary arrow' of Abenomics accomplished? To answer this question, recall that this part of Abenomics called for the Bank of Japan (BoJ) to doublethe monetary base and raise inflation to 2%. On the former goal the BoJ has been successful. On the later goal ...