Economics Roundtable

NOTICE 9/30/177

The Economics Roundtable website has been up and running for a couple of days now. Further periods of testing will be necessary. The RSS feed is still not working. The left sidebar links are also probably not updating correctly.

The problems were caused by updates to the programming language php and to the Apache operating system. It is taking time to track down the problems this causes with my system. - Bill Parke

March 2017 Fed Funds Rate

What is the effect of a 0.25% change in the Fed Funds rate?.

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March 2017 Payroll Employment

Payroll employment has not grown impressively since 2000. Some baby-boomers retired, but that does not totally account for this graph.

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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?


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Financial Crisis and Recession

"Economic analysis by Susan Woodward and Robrt Hall”


September 12, 2017, 1:15 pm, 1772594

 

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 quarter of ...


September 12, 2017, 1:15 pm, 1772595

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 the spending ...


September 12, 2017, 1:15 pm, 1772596

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 quarter show ...


September 12, 2017, 1:15 pm, 1772597

 

  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 depositories, prefer ...


September 12, 2017, 1:15 pm, 1772593

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 notable success ...


September 12, 2017, 1:15 pm, 1772592

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.


September 12, 2017, 1:15 pm, 1772589

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:

… ...


September 12, 2017, 1:15 pm, 1772590

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 Depression. The ...


September 12, 2017, 1:15 pm, 1772591

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 of the ...


September 12, 2017, 1:15 pm, 1772588

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 shocks. With ...