Technical Problems 1/21/15
The website was down for a day and a half, but is back up now.
May 2014 Payroll Employment
After 76 months, we finally got back to the prerecession level of payroll employment.
Click on the image to get a bigger version.
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 .
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.
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?
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"Helping to Simplify Economics”
The throw-away economy refers to the prevalence of consumer goods which only last for a short period of time. When they stop working / no longer relevant, we throw them away and replace them with new goods.
This is in contrast to ...
Readers Question: Endangered rain forests, wild fish, elephants and more are examples of the tragedy of the commons. What would economists recommend to save, rain forests or fish stocks?
Readers question: In all the media coverage of the UK deficit / debt / recovery, two aspects are rarely highlighted / quantified / contextualized.
1. The £50bn interest payments on the debt (opportunity cost / %)
2. UK productivity (output per head ...
Just a short post, inspired by this article by Hamish McRae in Independent – Would it Matter if Greece left the Euro?
So often governments have fought ‘tough and nail’ to stay in an exchange rate system. But, when they finally leave – it is the best thing they ever ...
Readers question: should the government focus on achieving a particular macroeconomic objective over the others?
This is a good question. There is a lot that can be said because it encompasses so many different topics.
Firstly, the three main macro-economic objectives:Higher economic growth Low ...
A look at the possible conflicts between different macro-economic objectives.
The main macro economic objectives are:Positive and sustainable economic growth (UK, long run trend rate is around 2.5%) Low inflation (UK target 2% +/-1) Low unemployment / Full employment (e.g. around 3%) Satisfactory current account ...
A report by NIESR suggests that austerity pursued by the government in 2010, needlessly led to a delayed economic recovery and could have cost the UK 5% of GDP or £1,500 per person.
Readers Question: Is there an inbuilt deflationary bias in the Eurozone?
Note: I originally wrote this post in 2010. Unfortunately, every year there is a reason to update the post and suggest the deflationary bias in the Eurozone keeps getting stronger.
Deflation means a fall in prices (a negative inflation rate). Policy makers should generally be concerned if there is an inflation rate of less than the target of 2%.
For example, in the Eurozone Jan 2015, the headline inflation rate is ...
Greece is a very good example of the damage of austerity can do to both economies and the social fabric of a country. Firstly Greek austerity is almost unprecedented in its scope and intensity.
Greece government spending and revenue