Economics Roundtable
Payroll Employment
The December figure for U.S. payroll employment comes out Friday. The November figure was down over 500,000 jobs. Is a loss of 1,000,000 jobs possible for December?
Charts to watch:
2004-2009
1988-2009
12/31/08 -- The growth in excess reserves has slowed, at least for the past two weeks. Excess reserves have grown to $798 billion, which is an increase of only $24 billion.
12/18/08 -- Excess reserves increased from $590 billion to $774 billion over the past two weeks. Required reserves are now $53 billion. Total reserves equal about 52% of M1.
12/4/08 -- Excess reserves decreased from $605 billion to $590 billion over the past two weeks.
11/20/08 -- Reserves with the Fed increased by $237 billion over the past two weeks. Required reserves are now $48 billion, and total reserves are $653 billion, leaving excess reserves of $605 billion. Reserves are now equal to about 44% of the money stock M1.
August, 2008 -- Excess reserves are $2 billion, a figure that is typical of recent years.
Monetary Policy in Three Steps
Step 1: Buy private assets from banks while selling Treasuries, effectively trading private assets for Treasuries, leaving reserves with the Fed unchanged.
Step 2: Buy private assets from banks, paying with deposits with the Fed (new money) because the portfolio of Treasuries is shrinking. Banks make little attempt to convert deposits with the Fed into loans. Nothing much happens to loans and the money supply, but excess reserves explode.
Step 3: Banks start to expand loans on the basis of massive excess reserves. The Fed has to drain hundreds of billions in excess reserves to regain control of the money supply. The Fed does this by selling private assets back to the banks.
We are now well into Step 2. Step 3 should be interesting.
Why AIG was in the CDS Business
Felix Salmon explains how taxpayers get to pay the claims after AIG collected the premiums. It is really very simple.
VoxEU -- Free Online Book
Rescuing our jobs and savings: What G7/8 leaders can do to solve the global credit crisis -- Contents Page
Richard Baldwin, Barry Eichengreen
"Without rapid and coordinated action by G7/8 leaders, this financial crisis could turn into a jobs crisis, a pension crisis and much more. This column introduces a collection of essays by leading economists on what the G7/8 leaders should do this weekend. The dozen essays present a remarkable consensus on a few points: we need immediate, coordinated global action that includes recapitalisation of the banks."
Economic Principals
Congratulations to David Warsh on the occasion of the 25th anniversary of EP.
The First Global Financial Crisis
of the 21st Century
A VoxEU.org Publication
Edited by Andrew Felton and Carmen Reinhart
Read the announcement
and/or download selected chapters.
Review: the topic itself is important, but this book also marks a new direction for online discussion.
Great Articles by Famous Economists
The Library of Economics and Liberty includes The Concise Encyclopeida of Economics. To see how many well-known economists have contributed browse by category .
EconModel
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The Classic Economic Models cover micro, macro, and financial markets.
Oxonomics
"Economic Perspectives from the Dreaming Spires”
“Oxonomics is a peer-reviewed, academic journal established by graduate members of the University of Oxford.”
In this piece Clark scores a number of points against many his critics. However he leaves one big criticism unanswered: and this is that the book fundamentally mischaracterizes the work in economic history on institutions and urbanization (See here ). Furthermore in presenting all history before 1800 as ...
According to the Guardian art models at Paris's City Hall are going on a [naked] strike to protest against the city hall banning the tradition of tipping the models. It is pretty clear why they are unhappy. The model only get paid 10 euros an hour but their tips can add ...
This is a priceless recording of Hayek on Keynes taken from Bill Buckley's Firing line. Hat tip Free Advice.
The 2008 issue of Oxonomics (our journal) is freely available here at the Wiley Interscience website. I recommend you all have a look at it. Highlights include interviews with two eminent economists: Paul Collier and Jeffrey Williamson. Collier talks about foreign aid and the political economy of ...
Willem Butier has a great post on the recent proposal to prevent repossessions. The details of the £1 billion policy reveal that it is simple and unadorned handout to the median voter. Home-owners with mortgages of up to £400,000 benefit.
There are good and bad policies a government ...
All of a sudden Keynes is everywhere. Tonight Robert Skidelsky gave a talk at Merton on Keynes and the current financial crisis. Greg Mankiw ...
Tyler Cowen asks a good question:
'What are the times in history -- whether in the U.S. or elsewhere -- when a large-scale application of expansionary fiscal policy has been effective in raising a country out of a recession or depression?What are the times in history ...
I'm planning on doing a roundup of the fierce debates that having been going on on the blogsophere over the impact of the New Deal in the 1930s. But in the meantime Tyler Cowen's New York Times piece is very sensible.