Economics Roundtable

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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Economics Help

"Helping to Simplify Economics”


May 27, 2016, 5:23 am, 1640327

Definition of creative destruction. This refers to the process of how capitalism leads to a constantly changing structure of the economy. Old industries and firms, which are no longer profitable, close down enabling the resources (capital and labour) to move into more productive processes.

Creative destruction means that the company closures ...


May 26, 2016, 9:23 am, 1640057

A few readers have asked me about where I stand on UK, EU and Brexit.

These are some personal notes – not necessarily economic (or coherent!)

I will probably vote Remain, though not with any particular enthusiasm. I do identify as both British and European. I would like to see Britain act closely ...


May 26, 2016, 5:23 am, 1639993

Finding the cost of EU membership to the UK is not straightforward. If you Google ‘Cost of EU membership’ you will see many different figures reflecting different methodologies. For example, those keen to leave the EU may include all the gross costs, plus estimated bureaucratic costs and not include any ...


May 25, 2016, 5:23 am, 1639606

Laissez faire economics is defined as a situation with minimal government intervention. Under laissez-faire, governments and regulators ‘leave alone’ private firms to allow them to make decisions about production and output.

In particular, laissez-faire involves zero / minimal government intervention on issues such as regulation, taxes and tariffs.

Origin of Laissez faire

Laissez-faire ...


May 24, 2016, 5:23 am, 1639237

Hysteresis is a concept which states that history affects the value of a current issue. In economics, hysteresis states that historical rates of unemployment are likely to influence the current and future rates of unemployment.

If there is a recession and rise in cyclical unemployment, this temporary unemployment can affect ...


May 23, 2016, 5:23 am, 1638886

Is net positive migration a factor behind the UK’s recent rise in house prices? Given rapid rise in house prices since mid 1990s and corresponding rise in number of immigrants, it is hard to avoid the conclusion, levels of net migration are having, at least, some effect on exacerbating the ...


May 21, 2016, 5:23 am, 1638584

There have been numerous economic predictions springing from a possible Brexit including recession, unemployment, falling Pound, falling stock markets, collapsing house prices, inflation and the end of civilisation as we know it (I’ll leave predictions of world wars e.t.c. for someone else to grapple with). But, what is the economic ...


May 13, 2016, 5:23 am, 1636230

It is getting close to the summer exams, and one reader asked if I had any tips for memorising information.

Some things that worked for me

Read then close book. I used to read a book, then close and try to remember was is in the closed book. If I couldn’t remember, ...


May 11, 2016, 5:23 am, 1635459

The minimum wage for workers 18-20 is currently £5.30 (May 2016)

Readers Question: What are the minimum wage rates for 16, 17 and 18 year olds. Should the minimum wage be increased?  Should there be a minimum wage rate for children under 16?

Minimum Wage Rates from April 2016 £7.20  –  25 ...


May 10, 2016, 7:23 am, 1635040

A look at the economic impact of an increase in the supply of female workers in labour markets.

In Summary:

Increased female labour market participation, will lead to increase in supply of labour, and in theory, could lead to lower wages. However, a gradual increase in female labour market participation is often ...