Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, but is back up now.


May 2014 Payroll Employment

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

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Jobs

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.


March 30, 2015, 9:23 pm, 1448027
Ben Bernanke is back and mulling over low interest rates. From the Washington Post:

Blogging isn't dead. At least, Ben Bernanke, former chairman of theFederal Reserve, doesn't think so: He's now blogging at the Brookings Institution. Inhis first post,he says he wants ...


March 29, 2015, 1:23 am, 1447093
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 ...


March 27, 2015, 5:23 pm, 1446708
Just a quick note on whether the Fed should raise interest rates later this year. One concern that many observers have with the Fed tightening is that nominal wage growth has yet to show any signs of accelerating. They often point to the employment cost index which ...


March 19, 2015, 11:23 am, 1442089
Ramesh Ponnuru has an article in the National Review where he revisits the 'test' of Market Monetarism put forth by Paul Krugman and Mike Konczal in 2013. Here is Ramesh:


The story begins in late 2012. The Federal Reserve ...


March 9, 2015, 1:23 am, 1435713
On Friday I was interviewed by Erin Ade on Boom Bust. We discussed why the Eurozone is not an optimal currency area--low labor mobility, limited fiscal transfers, differing regional business cycles--and why this means a one-size-fits all monetary policy is bound to make problems for this monetary ...


March 5, 2015, 7:23 am, 1433978
Source: Greg Ip
After six years of low interest rates many yields are now crossing the zero percent boundary. Interest rates in Europe ...


March 2, 2015, 3:23 pm, 1431908
Paul Krugman is frustrated (my bold):

In my own case, I’d guess that about 80 percent of what I’ve had to say about macroeconomics since the crisis was prefigured in my 1998 liquidity trap paper, which was classic MIT style — a stylized little model ...


March 2, 2015, 1:23 pm, 1431825
I made the case in my last post that the Eurozone crisis was largely a monetary policy crisis. That is, had the ECB lowered interest rates sooner and begun its QE program six years ago the fate of the Eurozone would be more certain. Instead it raised ...


February 26, 2015, 1:23 am, 1429285
Imagine the ECB had not raised its interest rate target in 2008 and 2011, but had lowered it. Also imagine the ECB began its open-ended QE program back in 2009. Would there now be a brighter future for the Eurozone? If the answer is yes, then the Eurozone ...


January 9, 2015, 1:24 pm, 1401810
Long-term treasury interest rates are falling again with the 10-year treasury briefly dipping below 2% this week. Some observers see this decline in yields as an omen for the U.S. economy:

The United States economy is accelerating... Yet a huge bond market with a strong track ...