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 15, 2014, 7:23 pm, 1319545
Speaking of secular stagnation, it appears to be catching on at the Fed. Here is CNBC's Alex Rosenberg:

Is there something seriously wrong with the economy?

It's a scary prospect, and a concern that's gotten louder and louder over the past year. In ...

August 15, 2014, 5:23 pm, 1319478
There is a new VoxEU ebook on secular stagnation. The book is a collection of essays by many prominent economists, most of whom are proponents of secular stagnation. As readers know, I am not convinced that this problem lingers over the U.S. economy and have explained why ...

August 5, 2014, 7:23 pm, 1312158
It is hard to believe, but it has been almost four years since William Luther turned nominal GDP targeting into a fashion statement. Below is my attempt to further his effort. I plan to wear this shirt around my neck of the woods. I will report back ...

August 5, 2014, 7:23 pm, 1312160
Today I got into a discussion with Amir Sufi on Twitter about what really caused the Great Recession. Was it the vast amount of household deleveraging or the economy being constrained by Zero Lower Bound (ZLB)? Amir Sufi and his coauthor Atif Mian have a new book ...

August 5, 2014, 7:23 pm, 1312157
Paul Krugman called for a higher inflation rate at a ECB conference this week. His plea for more inflation is understandable given the failure of the ECB's 2% inflation target to shore up the faltering Eurozone economy. He believes raising the inflation target to 4% will ...

August 5, 2014, 7:23 pm, 1312159
There have been many proposals to improve financial stability going forward. Some of them are bound to disappoint, while others have great potential. A great example of the former are proposals for macroprudential regulation. These proposals would have central bankers regulate financial firms based on systemic risks rather ...

August 5, 2014, 7:23 pm, 1312155
Has the ECB finally ended its hard-money ways? You know the kind that raises interest rates twice during the crisis, allows aggregate demand in the periphery to stall, and fosters below-trend growth in money supply and money velocity. On Thursday, the ECB said it would ...

August 5, 2014, 7:23 pm, 1312153
The Bank for International Setttlements (BIS) released its annual report today. It calls for central banks in advanced economies to begin tightening monetary policy to ward off the buildup of financial imbalances. This is great advice if it were 2002. But it is 2014 and advanced economies ...

August 5, 2014, 7:23 pm, 1312154
Must private-sector debt crisis necessarily lead to sharp recessions? Are impaired household balance sheets the reason for the Great Depression, the Great Recession, and the Eurozone crisis? For many observers the answer is an unequivocal yes. People acquired mortgages based on unrealistic expectations about future income streams from ...

August 5, 2014, 7:23 pm, 1312156
The answer is yes according to Ken Rogoff:

Has the time come to consider phasing out anonymous paper currency, starting with large denomination notes? Getting rid of physical currency, and replacing it with electronic money, would kill two birds with one stone.

First, it would ...