Economics Roundtable

NOTICE 4/30/18

The Economics Roundtable is back. The technical problem that has limited the set of blogs has been resolved. The RSS feed is, however, still not working.

Flushing caches will likely cause some old posts to show up for a day or two.

Employment as a Percentage of Population

The graph below shows employment as a fraction of population for people over 16 years old.

Click on the image to get a bigger version.

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.

Click on the image to get a bigger version.

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.

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.

RSS Feed

Causes of the Crisis

"Here, the authors of articles in Critical Review’s special issue on the causes of the financial crisis blog about their latest thoughts and findings regarding ‘what went wrong.’”

April 30, 2018, 8:05 pm, 1848218
It has been a long while since anyone has posted here. One reason is that the creative frenzy of last year, in which many different ideas about the financial crisis were debated, has lapsed into a hegemonic consensus about the causes of the crisis (see next post), so there hasn't ...

April 30, 2018, 8:05 pm, 1848219
An exhaustive compendium by Critical Review author Peter Wallison.

April 30, 2018, 8:05 pm, 1848220
by Viral V. Acharya

In the aftermath of the crisis, it is customary to fault the markets: Markets missed the crisis; markets are euphoric in good times; markets suffer from mob mania; markets reflect animal spirits, and so on. It is tempting to ring the death knell of ...

April 30, 2018, 8:05 pm, 1848221
Nobel laureate Ned Phelps writes : "The lesson the crisis teaches, though it is not yet grasped, is that there is no magic in the market: the expectations underlying asset prices cannot be 'rational' relative to some known and agreed model since there is no such model."

April 30, 2018, 8:05 pm, 1848217
The most shocking result of having researched the causes of the financial crisis for the last year and a half is this discovery: economists have no compunctions about answering empirical questions, such as what caused the specific crisis of 2008, with general theoretical models, whether macro- or micro- in nature, ...

April 30, 2018, 8:05 pm, 1848216
For what it is worth, here is Wladimir's and my response to the new consensus: "A Silver Lining to the Financial Crisis: A More Realistic Understanding of Capitalism." In it, we move from a rebuttal of the Corporate Compensation Myth to an explanation of the homogenizing effect of capital ...

April 30, 2018, 8:05 pm, 1848213
The key to understanding the "Basel thesis" about the cause of the crisis, advanced in Critical Review's special issue on the crisis by coauthors Viral Acharya & Matthew Richardson, and by coauthors Juliusz Jablecki & Mateusz Machaj, as well as by Wladimir Kraus and me in our forthcoming

April 30, 2018, 8:05 pm, 1848214
Ironically, Cafe Hayek takes issue with my Austrian claim that bankers were (in general) ignorant of the risks they were taking, hence could not have been taking these risks due to their knowledge that they were "too big to fail" and thus would be bailed out. Or at least ...

April 30, 2018, 8:05 pm, 1848215
Bill Woolsey draws attention in the comments to the Austrian emphasis on malinvestment, as opposed to the mainstream preoccupation with aggregate investment levels.

That certainly does seem like an important theoretical contribution (but I am a mere political scientist).

But is it a contribution to understanding the ...

April 30, 2018, 8:05 pm, 1848212
It appears that, as hypothesized here three months ago, the Greek debt crisis may actually be another Basel-induced banking crisis.

Basel II (adopted outside the United States in 2007, but not yet adopted here, where Basel I (1991) and the Recourse Rule (2001) are still in effect) gave a ...