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.


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”

June 24, 2016, 7:23 am, 1648127

Will the UK’s decision to leave the EU cause recession?

Factors which could cause Brexit recession Loss of confidence. Many foreign investors may be deterred from investing ...

June 24, 2016, 5:23 am, 1648100

The Brexit vote has led to sharp fall in the value of the Pound, at one stage falling to £1 = $1.33 – a fall of over 10%. This will have a significant impact on British firms, consumers and also those outside Europe.

In short:

A weak Pound makes foreign goods / ...

June 22, 2016, 7:23 am, 1647448

If the UK vote to leave the EU, many predict the Pound will fall significantly. Investor George Soros predicted it could be a bigger fall than in 1992 ERM crisis. Soros claims the Pound could fall by up to 20% (BBC) There are different reasons why the Pound ...

June 22, 2016, 5:23 am, 1647413

Foreign direct investment involves the transfer of funds to be involved in capital investment in a foreign company. For example, if a Japanese firm, like Toyota builds a factory in the UK, this counts as inward investment into the UK.

Foreign direct investment does not include portfolio investment, e.g. Chinese saving ...

June 20, 2016, 7:23 am, 1646765

I wrote a while back that I was a rather unenthusiastic supporter of remaining in Europe, and perhaps it wasn’t that important. In recent weeks, I have become more committed to staying in Europe, and feeling leaving the EU would be a regressive step.

Bigger perspective

The EU was formed out of ...

June 18, 2016, 7:23 am, 1646452

In economics, the framing effect states consumer choices will be influenced by how information is presented.

One of the challenges of an economist is to find correct statistics and present them in a way which offers a meaningful and fair portrayal of the situation.

Everyone has certain political bias and it ...

June 16, 2016, 5:23 am, 1645858

If you are interested in fiscal impact of net migration, this study “Fiscal effects of immigration to the UK” is worth reading.

Some highlights

EU migrants cost the UK government £408.12 per second in public expenditures, and contribute £463.35 per second in revenue. Of all EU migrants, nearly nine in ten ...

June 16, 2016, 5:23 am, 1645857

George Osborne has recently stated that leaving the EU could leave a black hole in public finances of £30bn and this would lead to sharp budget cuts – tax rises and spending cuts.

This raises the interesting question of whether you can talk yourself into a recession. Do predictions of

June 15, 2016, 5:23 am, 1645512

A big issue is how net migration is affecting the National Health Service.

Does an influx of migrants place greater strain on the NHS? Is migration a convenient excuse for the more long-term issues facing the NHS? To what extent do migrants work for the NHS? If we cut migration levels would that affect ...

June 13, 2016, 5:23 am, 1644779

Neoliberalism is a term commonly used to describe free-market economics. Neoliberalism involves policies associated with free trade, privatisation, price deregulation, a reduced size of government and flexible labour markets. Recently, neoliberalism has been associated with the policies of austerity and attempts to reduce budget deficits – usually by cutting government ...