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 .

Click on the image to get a bigger version.

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.


The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.

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Economics Help

"Helping to Simplify Economics”

December 3, 2016, 7:23 am, 1699469

Mobility of labour refers to how easily workers can move to different jobs within the economy. The two main factor of labour mobility are:

Geographical mobility – how easy is for a worker to move between different regions and countries to seek new work. Occupational mobility – how easy is it for ...

December 2, 2016, 5:23 am, 1699164

Shrinkflation occurs when firms reduce the size or quantity of a good and keep prices the same.

Shrinkflation is an alternative to increasing prices, and you could argue it is a disguised form of inflation because if you wanted to buy exactly the same quantity of the good, you would have ...

December 1, 2016, 5:23 am, 1698825

A positive feedback loop is a situation where two events are mutually reinforcing. With this situation a small change in one input can cause a bigger final increase in both events.

Suppose, there is a rise in demand for buying a commodity. This rise in demand leads to rising prices. However, ...

November 30, 2016, 5:23 am, 1698463

All economic forecasts are subject to margins of error. This is because:

There are many variables affecting the economy. For example, the role of shadow banking was largely ignored in 2007 forecasts, but failed sub-prime mortgage debt had a much bigger impact on the wider economy than ever before. There is always ...

November 28, 2016, 7:23 am, 1697777

The gig economy refers to the segment of the labour market which concentrates on short-term / temporary jobs and contracts. Often these workers can have more than one job, e.g taxi driver who works both for traditional taxi company and Uber.

Like a musician who goes from one gig to the ...

November 21, 2016, 7:23 am, 1696069

Readers question: “Can an economy achieve low unemployment, low inflation and economic growth at the same time?”

To achieve low unemployment, low inflation and economic growth at the same time is possible. For example, the UK economy 1993-2006 saw a prolonged period of low inflationary growth. Since early 2000, the Chinese ...

November 20, 2016, 5:23 am, 1695855

I’m currently reading a book Blood, Iron and Gold by Christian Wolmar about how railways transformed the world.

This interesting extract from the political economist Friedrich List, explains some of the economic benefits of railways:

Railways would carry wood, turf and ...

November 18, 2016, 5:23 am, 1695432

Firms generally prefer inflation to be low and stable. If inflation rise above 3 or 4%, firms may see a rise in costs and uncertainty. In some circumstances, high inflation can negatively affect a firms profits. However, it is worth pointing out that deflation (falling prices) could also be very ...

November 16, 2016, 5:23 am, 1694671

The first admission about writing on the economic policies of Donald Trump is that nobody can be entirely sure what it will be – perhaps even Donald Trump himself. Campaign promises are one thing, but the reality of a Republican controlled Congress, may be something else. I don’t think it ...

November 14, 2016, 7:23 am, 1693843

Readers Question: What causes price fluctuations for the supplier in the agricultural market such as coffee/tea?

Coffee tea are agricultural products. Therefore supply can be variable depending on several factors

1. Weather conditions.

For example, early frost can harm supply. Good weather can lead to unexpectedly large increase in supply

Also, disease and pests ...