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.


EconModel

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”


July 29, 2016, 5:23 am, 1658522

The fundamental economic problem is one of scarcity. The basic question of economics becomes:

What to produce? How to produce? For whom to produce?

You could also add

When to produce?


July 27, 2016, 7:23 am, 1657636

One potential benefit of leaving the EU is the opportunity to radically change how we spend agricultural subsidies. The Common Agricultural Policy CAP is one of the great mistakes of the EU. Given the share of EU spending on agriculture, it is their flagship policy, yet the CAP has ...


July 26, 2016, 5:23 am, 1657145

A look at how the housing market, and changes in house prices affects the rest of the economy. In summary:

Rising house prices, generally encourage consumer spending and lead to higher economic growth. A sharp drop in house prices adversely affects consumer confidence, construction and leads to lower economic growth.

Real house prices ...


July 25, 2016, 5:23 am, 1656733

Cherry picking of data means we look for particular data and statistics that help to illustrate our point of view. It can also mean we present data in a certain way which is more favourable to creating the impression we want. Even the same statistic can be presented in different ...


July 22, 2016, 5:23 am, 1656126

Consumer confidence is the outlook that consumers have towards the economy and their own personal finance situation. This outlook can be optimistic (high consumer confidence) or pessimistic (low consumer confidence)

The level of consumer confidence will be an important factor that determines the willingness of consumers to spend, borrow and save. ...


July 22, 2016, 5:23 am, 1656125

A recession is defined as a decline in real GDP for two consecutive quarters. We will know an economy is in an official recession after six months of falling national income. A recession will typically lead to higher unemployment, decline in confidence, falling house prices, decline in investment and lower ...


July 21, 2016, 5:23 am, 1655650
A lagging indicator is an economic statistic that tends to have a delayed reaction to a change in the economic cycle. A leading indicator is an economic statistic that tend to predict future changes in the economic cycle. A co-incident indicator is a variable that changes with the whole economy.


July 20, 2016, 7:23 am, 1655296

One of the great achievements of the twentieth century is a dramatic rise in life expectancy. For example, life expectancy in the US has increased from 45 in 1902 to 75.7 in 2004 (link). Even in the past 50 years, life expectancy has risen in most western economies.

Life expectancy


July 19, 2016, 9:23 am, 1654953

Readers question: What is the importance of economics?

Economics is concerned with the optimal distribution of resources in a society. The subject involves

Understanding what happens in markets and the macro-economy. Examining statistics about the state of economy and explaining their significance Understanding different policy options and evaluating their likely outcomes.


July 18, 2016, 7:23 am, 1654520

Readers Question: What’s the relationship between a countries economy and it’s stock market? Is it always true that the stock market reflects a country’s economic conditions?

Generally speaking, the stock market will reflect the economic conditions of an economy. If an economy is growing then output will be increasing and most ...