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”

November 12, 2015, 2:34 pm, 1575533
Jim Bullard has given a talk on "Permazero." Jim frames the idea as follows:

We have, after all, been at the zero lower bound in the U.S. for seven years.  In addition, the FOMC has repeatedly stressed that any policy rate increase in coming quarters and years will likely be ...

October 13, 2015, 6:34 pm, 1557638
Purveyors of standard monetary policy lore argue that the effects of monetary policy are subject to "long and variable" lags. The idea appears to originate with Milton Friedman. Quoting from "A Program for Monetary Stability:"

There is much evidence that monetary changes have their effect only after a considerable lag ...

October 4, 2015, 6:34 pm, 1553049
Words such as "grim" and "dismal" were used to describe Friday's employment report, which featured a payroll employment growth estimate for September of 142,000. Indeed, I think it would be typical, among people who watch the employment numbers, to think of performance in the neighborhood of 200,000 added jobs ...

September 22, 2015, 6:34 pm, 1547749
In the midst of this Paul Krugman post, I found a description of Wicksellian dynamics:

As I’ve been trying to point out – and as others, notably Ben Bernanke, have also tried to point out – such monetary wisdom as we possess starts with Knut Wicksell’s concept of the ...

September 20, 2015, 10:34 pm, 1546675
Here's the time series of the fed funds rate and inflation rate in the United States, from the time Paul Volcker became Fed Chair:Suppose an alien with a high IQ lands in my back yard. I ...

September 6, 2015, 2:34 pm, 1540013
Paul Krugman concludes that "hiking rates now is still a really bad idea." So, his opinion is clear. What's not so clear is his argument, which is this:

When the Fed funds rate was 5 percent, there was room to cut if a rate hike turned out to be ...

September 4, 2015, 4:34 pm, 1539535
Paul Romer is worried that the field of macroeconomics is too tribal - somehow our behavior is impeding scientific progress.

Romer starts his post with two statements:

1.The model in Lucas (1972), Expectations and the Neutrality of Money, made a path breaking contribution to economic theory. It is comparable ...

September 4, 2015, 12:34 pm, 1539377

September 2, 2015, 12:35 pm, 1538063
Reading Paul Krugman's recent blog post reminded me of this earlier post of his, which was much in the same spirit. Krugman wants to argue that the Old Keynesians - James Tobin in particular - had it right. This is Krugman's conclusion:

So how does the decade of ...

September 1, 2015, 4:34 pm, 1537545
John Cochrane's blog post, Whither Inflation, is excellent reading. Basically, John takes a mainstream New Keynesian model and shows how it has Neo-Fisherian characteristics - if the central bank raises the nominal interest rate, inflation increases. Noah Smith seems to find this interesting, but he's got some problems ...