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.

July 15, 2014, 3:23 pm, 1301385
I have an new article in the Washington Post where I make the case against secular stagnation. My argument is based on three observations. The details of these arguments and evidence for them are spelled out in the piece, but here is a quick summary.

July 14, 2014, 5:23 pm, 1300893
Many observers claim the Fed has been keeping interest rates artificially low over the past five years. They contend this low-interest rate policy is creating financial instability via an unnatural reach for yield and harming folks who depend on fixed income. They want to see the ...

July 11, 2014, 11:23 am, 1299802
I have a new policy paper that argues inflation targeting has passed its expiration date. Here is the title and abstract:

Inflation Targeting: A Monetary Policy Regime Whose Time Has Come and Gone
Inflation targeting emerged in the early 1990s and soon became the ...

July 10, 2014, 1:23 am, 1298961
Rather, there is a 2% upper bound to the Fed's inflation target. This is an argument that Ryan Avent, Matt Yglesias, Paul Krugman, and others have been making for some time. I am sympathetic to this view and have made the case that the ...

July 9, 2014, 9:23 pm, 1298918
The June FOMC minutes were released today. One interesting development we learned from it is that some FOMC members are becoming concerned that the Fed may be slowly taking on more and more financial intermediation activities that traditionally have been provided by banks. In the limit, this ...

July 4, 2014, 5:23 pm, 1296931
This is a great question to consider as we celebrate Independence Day here in the United States. It is also a great question for Europeans who have learned the hard way that the Eurozone is not an optimal currency area. Fortunately, economic historian Hugh Rockoff has already worked ...

July 4, 2014, 1:23 am, 1296741

Amidst the siren calls of financial stability concerns, it is worth remembering that not all indicators show asset price froth and excesses. In fact, some show the opposite. Here are a four:

(1) The risk premium as measured by the BAA corporate yield minus 10-year treasury yield is ...

July 2, 2014, 11:23 pm, 1295729
The Bernanke era at the Fed came to an end today and many are already opining on what it means. Many smart things have been said about the Bernanke Fed, but most accounts have overlooked two of its biggest failures. No assessment of the Bernanke Fed is complete ...

July 2, 2014, 11:23 pm, 1295728
The release of the 2008 FOMC transcripts has once again focused attention on the role the Fed may have played in spawning the Great Recession. The first sign of a crack in the U.S. economy was in April 2006 when the housing sector began to contract. As seen ...

June 30, 2014, 5:23 pm, 1293435
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 2013 and advanced economies ...