Economics Roundtable

January 2014 Payroll Employment

We are getting closer to the previous peak.

Click on the image to get a bigger version.


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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Financial Crisis and Recession

"Economic analysis by Susan Woodward and Robrt Hall”


February 11, 2014, 6:34 pm, 1223119

 

  Here are our recommendations. A discussion follows.

The GSEs should be preserved, mainly because they are the most effective institutions for providing liquidity to the mortgage market.  Most mortgage investors, including ...


February 11, 2014, 6:34 pm, 1223116

 

While plant and equipment spending for the entire economy was down in the fourth quarter, it only fell by 4.4 percent from its level in the fourth quarter of 2007.  By contrast, venture capital investment was down by 31 percent.  In the fourth ...


February 11, 2014, 6:34 pm, 1223117

The House has passed HR1 and the Senate is working on a counterpart fiscal stimulus bill. We will discuss HR1 for the sake of specificity and in the belief that the final law will be fairly similar to HR1.

The table below shows the Congressional Budget Office’s estimates of ...


February 11, 2014, 6:34 pm, 1223118

We had pointed out earlier that, despite all the downdrafts in the economy and a recession that started at the end of 2007, real plant and equipment spending was still on its normal growth path as of the third quarter of 2008. The first estimates for the fourth ...


February 11, 2014, 6:34 pm, 1223115

The Fed has indicated that it plans to pursue a policy of quantitative easing, that is, expanding its portfolio by borrowing in financial markets at low rates and investing the proceeds in higher-yielding private investments. The Fed’s acquisition of large amounts of Fannie and Freddie’s debt was a ...


February 11, 2014, 6:34 pm, 1223113

Policymakers continue to struggle to figure out how to turn a troubled bank into a good bank and a bad bank. Under the good-bank/bad-bank policy, the good bank will operate free from concerns about troubled assets, because these assets will be held by the fully independent bad bank. Most discussions ...


February 11, 2014, 6:34 pm, 1223110

Washington is turning its attention to the future, having put out most of the financial fires. The crisis seems to be over, but questions remain about how to manage under-capitalized banks and, especially, how to design a financial system for the future that is more robust to adverse ...


February 11, 2014, 6:34 pm, 1223111

More and more one hears the concern that the Fed has embarked on an expansionary policy that will result in high inflation once the economy returns to normal. John Taylor, a leading expert in this area, put the argument as follows, in recent Congressional testimony:


February 11, 2014, 6:34 pm, 1223112

The March payroll employment data showed that the decline in employment from the peak in December 2007 is now larger in percentage terms than the decline in the worst recession since 1960, in 1981-82. The plot below shows, however, that the decline is small in comparison to the ...


February 11, 2014, 6:34 pm, 1223114

With the January figure, payroll employment has crossed the line of the worst previous recession, the one beginning in July 1981, rescaled to the size of today’s labor force. One more bad month and the current recession will become the worst on record, apart from the Great Depression.