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.

August 27, 2015, 7:23 am, 1534948
First, peg the Chinese yuan to another currency that has been rapidly appreciating over the past year...

...this will choke ...

August 14, 2015, 9:23 pm, 1528921
Ramesh Ponnuru has a new article titled Fallible Fed Needs a Few Good Rules. Here is an excerpt:

Some Republicans think that Congress should supply a framework for the Fed, making it more rule-bound. One much-discussed approach would have the Fed follow the “Taylor rule” ...

August 14, 2015, 7:23 pm, 1528883
One of the more popular tales of 'expansionary austerity' was Canada in the mid-to-late 1990s. During this time Canada slashed government spending and brought down its debt-to-GDP ratio. Despite this fiscal stringency, the economy grew steadily and the unemployment rate fell. How was this possible?

August 11, 2015, 7:23 am, 1526325
So Chinadevalued its currency peg almost 2% against the dollar. It happened just as I was wrapping up a twitter debate on this very possibility, a very surreal experience. Many more twitter discussions erupted after the ...

August 7, 2015, 9:23 pm, 1524380

China's economy has been slowing down for the past few years and many observers areworried. The conventional wisdom for why this is happening is that China's demographic problems, ...

August 6, 2015, 5:23 pm, 1523495
Yesterday I sharedthe following on twitter:

This tweet generated a number of questions that sent me back to the data for a closer look. ...

July 22, 2015, 1:23 pm, 1513680
Paul Krugman notes that Eurozone crisis is a vindication of that optimum currency area (OCA) theory. I agree but would note the crisis also sheds light on the specialization versus endogeneity debate surrounding the OCA criteria. Interestingly, Krugman himself wrote some of the literature ...

July 16, 2015, 3:23 am, 1510112
According to a recent Bloomberg article, nine people saw the Eurozone crisis coming years before anyone else. Wow, only nine people saw it coming? That is remarkable, these folks must be truly prescient if only they foresaw the crisis.
Except that this claim ...

July 13, 2015, 3:23 pm, 1508399
The blogosphere is once again talking about Canada's successful fiscal austerity in the mid-to-late 1990s. Paul Krugman rekindledthe conversation with this statement:

[L]ook at everyone's favorite example of successful austerity, Canada in the 1990s. Canada came in with gross debt of roughly 100 percent of ...

July 5, 2015, 1:23 am, 1503172
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 ...