Economics Roundtable

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 .

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.

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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Stephen Williamson

"Stephen Williamson:  New Monetarist Economics
My lastest ideas on macroeconomics, monetaryu economics, economic policy and current events”

February 1, 2016, 6:34 pm, 1604270
Here are some comments on Narayana Kocherlakota's "The Potential Power of Negative Nominal Interest Rates."

Negative nominal interest rates allow a central bank to achieve lower real interest rates, without raising inflation expectations.

So, negative nominal interest rates lower inflation expectations. Agreed.

...a negative nominal interest rate gives ...

January 31, 2016, 4:34 pm, 1603911
Here's a remark I've heard more than once from macroeconomists who are old enough to remember the 1970s: If you could go back to 1979 and tell people that the big problem facing central banks in 2016 would be getting the inflation rate up to 2%, they would all have ...

January 18, 2016, 4:34 pm, 1599812
In recognition of Dr. King's birthday, Narayana Kocherlakota is typically provocative. According to him, monetary policymakers pay insufficient attention to questions of economic inequality, and policy would be better if they were more cognizant:

...the Federal Reserve Act’s vision of economic diversity is largely regional and sectoral in nature. ...

January 16, 2016, 8:34 pm, 1599503
The primary "liabilities" currently on the Fed's balance sheet are currency (Federal Reserve notes and coins), reserves (roughly, checking accounts of financial institutions held with the Fed), and reverse repos (ON-RRPs discussed in this post), which play an important role in the Fed's intervention to control overnight interest rates. ...

January 16, 2016, 12:34 pm, 1599472
A helpful reader of my last post alerted me to one of the pitfalls of chain-weighted national income accounts data, complete with references (this one and this one). Chain weighting, in principle, gives us better measures of real GDP and inflation, but it has some negative side ...

January 15, 2016, 6:34 pm, 1599382
Mark Thoma called my attention to a Vox blog post by Rachel and Smith, who are at the Bank of England. The post is a condensed version of this Bank of England working paper, which assembles a lot of evidence on low real interest rates, and takes a ...

January 14, 2016, 6:34 pm, 1598991
I'm pleased to see that Narayana Kocherlakota seems interested in Neo-Fisherism. The crux of what he wants to say is in this note. What's that about? Narayana starts with a more-or-less standard New Keynesian (NK) reduced-form setup. There's an equation pricing a nominal bond (the "IS curve" in ...

January 11, 2016, 10:34 pm, 1597952
In case you haven't noticed, Narayana Kocherlakota has been writing blog posts since arriving at the University of Rochester. I'm interested mainly in the most recent of these, in which Narayana attempts to make the case that monetary policy in the United States is currently "overly tight."

January 11, 2016, 10:34 pm, 1597951

December 31, 2015, 12:34 am, 1595026
Brad DeLong has a comment on this blog post by Larry Summers, which I also wrote about. Brad agrees with Summers, and sums up with:

..the Fed does not engage in reflective equilibrium. It rejects the conclusions of what I regard as the standard Patinkin-style existing model ...