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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The Classic Economic Models cover micro, macro, and financial markets.
"Helping to Simplify Economics”
Automation refers to the process of automatically producing goods through the use of robots, control systems and other appliances with minimal direct human operation.
Within manufacturing industries, automation has led to increased labour productivity as fewer workers are needed to produce the same number of manufactured goods.
A perceived ...
Rational expectations is an economic theory that states – when making decisions, individual agents will base their decisions on the best information available and learn from past trends.
Rational expectations is the best guess for the future.
Rational expectations suggests that although people may be wrong some of the time, on average ...
Over Christmas and the New Year I visited Greece – landing at Athens airport then hiring a car to Kalamata. After writing many articles on the economic troubles of Greece, it was interesting to visit in person.
After keeping interest rates at close to zero for several years, the US Federal Reserve have moved to finally increase interest rates. This increase in interest rates is more significant than usual because it marks an end to the unique circumstance of ultra low interest rates. The Federal Reserve have ...
After the UK’s decision to leave the EU, what economic problems will it face?
Summary of problemsDevaluation of Pound Sterling, increasing price of imported goods, such as food, oil, manufacturers and domestic inflation. Decline in capital flows as UK is seen as more risky place to invest and save. Decline in inward investment. ...
A look at the economic impact of falling house prices.
Readers Question: Explain why a decrease in the price of houses can lead the economy to experience a recession.
In summary: falling house prices reduce consumers’ main form of wealth. This tends to cause lower spending and lower economic growth due ...
Since the financial crisis, we have seen an unprecedented stagnation / decline in real wages. This decline has been most noticeable for low income workers, with growing levels of inequality.The decline / stagnation in real wages is a global phenomena – though some countries have been more affected than ...
Readers Question: I’m an American, and I have a question on tariffs. Donald Trump has said he will place a tariff on all Chinese steel, and on Mexican cars. My question is, “Are tariffs still useful, and if so, why not put tariffs on all cars from Japan, Korea, Mexico, ...
Mobility of labour refers to how easily workers can move to different jobs within the economy. The two main factor of labour mobility are:Geographical mobility – how easy is for a worker to move between different regions and countries to seek new work. Occupational mobility – how easy is it for ...
Shrinkflation occurs when firms reduce the size or quantity of a good and keep prices the same.
Shrinkflation is an alternative to increasing prices, and you could argue it is a disguised form of inflation because if you wanted to buy exactly the same quantity of the good, you would have ...