Economics Roundtable

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 .

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”

November 25, 2015, 5:23 pm, 1582235

Readers Question: Why are there government spending cuts at a time of rising government spending?

One of the confusing elements of ‘austerity’ and government spending cuts is that from one perspective, we can have a rise in total government spending – but some areas of government spending see cuts.

November 25, 2015, 5:23 pm, 1582234

Since 2010, the UK economy has been dominated by spending cuts and a the desire to run a budget surplus as soon as possible. In the political world, the government deficit is often portrayed as the source of many economic ills, and eliminating the deficit one of the highest macro ...

November 24, 2015, 1:23 am, 1581104

Readers Question: Discuss the impact of a decrease in government spending?

If the UK government cut government spending it would have a significant impact on both aggregate demand (AD) and the supply side of the economy – depending on which areas of public spending were cut.

Firstly, government spending (G) is a ...

November 19, 2015, 5:23 pm, 1579297

Readers Question: If there is a significant slowdown in the rate of Chinese economic growth – how will it affect the UK and other global economies?


The Chinese economy has been growing very rapidly, and is now one of the biggest economies in the world. The size of the Chinese economy ...

November 12, 2015, 1:23 pm, 1575512

The government is committed to reducing government spending as a % of GDP to 35% – one of the lowest percentages since the 1930s.

However, despite very strict government spending limits, (which see some departments spending cut by 30%), the government are still committed to a triple lock guarantee for ...

November 12, 2015, 1:23 pm, 1575511

Interesting article by Ken Clarke – lamenting difficulty of raising taxes.

Basically, the general public want public spending in key areas, but don’t want to have any increase in taxes to pay for them.

Pensioners triple lock very expensive – but will be very difficult to challenge. When people are used ...

November 11, 2015, 1:23 pm, 1574811

The UK population is projected to increase by 9.7 million over the next 25 years from an estimated 64.6 million in mid-2014 to 74.3 million in mid-2039. (ONS). Approx. 50% of the population increase is expected due to net migration.

This is a look at the economic and social ...

November 6, 2015, 5:23 am, 1571364

The natural rate of interest is the interest rate consistent with maintaining economic growth at its trend rate and stable inflation.

Another definition of the natural rate of interest is:

“the real interest rate consistent with real GDP equalling its potential level (potential GDP) in the absence of transitory shocks to ...

November 6, 2015, 5:23 am, 1571363

Supermarkets have strict criteria for the cosmetic appearance of fresh fruit and vegetables. The result of these criteria is that a high percentage (10-40%) of a farmers harvest can be rejected because the vegetables do not meet these standard rules of conformity.

This problem of rejected vegetables was highlighted on a ...

October 31, 2015, 7:23 am, 1567554

The London housing market is one of the most expensive places in the world. In Sept, 2015, the average London house price is now just under £500,000 (BBC)

Since 2013, house prices in London have risen 40%, defying a weak economy and stagnant growth in average earnings.

London house prices ...