Economics Roundtable
Calculated Risk
Read the Bill McBride interview.
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 .
Click on the image to get a bigger version.
June Payroll Employment
The slowndown in employment growth over the past few months is starting to become more apparent in the graph below.
Click on the image to get a bigger version.
Focus on the Problem
U.S. payroll employment peaked at 132.5 million jobs in February 2001. For April 2012, U.S. payroll employment had reached 133.0 million jobs, marking the third month in a row above the February 2001 level.
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.
Finally, it's hard to argue against the payroll employment graph below (straight from FRED) and the comparison across recessions (courtesy of Calculated Risk).
Looking Up At 2001
In February 2001, U.S. payroll employment peaked at 132.5 million. The November 2011 figure of 131.7 million still falls 800,000 jobs short of the earlier peak.
Click on the chart for a larger version.
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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AEIdeas - Economics
The Congressional Budget Office analysis of the immigration reform bill moving through Congress tells us some important things. Perhaps the newsiest is this: The legislation would save a net $175 billion over a decade and another nearly $700 billion over the decade after that. This is important, too: Real GDP — ...
Some days ago, the giant Chinese telecoms firm, Huawei, once again was confronted with negative headlines — this time questioning the decision of the British government a decade ago to allow the firm substantial contractual access to the national telecommunications infrastructure. The new controversy and headlines stemmed from a damning ...
Last month I wrote about the idea of a tax cut financed by the Fed, perhaps combined with an NGDP target. As David Beckworth writes, this could be a way of combining fiscal and monetary policy responses ...
MIT Technology Review gives a solid overview of the “race against the machines,’ technological unemployment argument. It points out a) the productivity-jobs gap; b) the hollowing out of the workforce by skills; c) the emergence of a new generation of machine competitors such as Baxter, Kiva, and Watson. Lots ...
Paul Krugman provides a succinct argument for not doing anything on entitlement reform. Succinct, but mostly wrong.
Krugman says, “As I like to point out, the conventional wisdom on these things seems to be that to avert the danger of future benefit cuts, we must act now to cut future ...Providing disaster aid to the poorest people in the world who have been devastated by natural and man-made disasters has been a staple of farm bill legislation over the past sixty years, reflecting the commitment of ordinary American citizens to helping those who are genuinely in urgent need ...
Fannie Mae and Freddie Mac have been political Teflon for the last five years – untouched by regulatory reform that has pervaded the rest of the financial services industry. A not-so-secret source of their powers is the widespread belief that the GSEs promote home ownership. But what if they didn’t?
In ...
What should the Fed do next? Something to consider: Economist David Beckworth correctly notes that a) long rates started rising several weeks before Fed Chairman Ben Bernanke’s “tapering” comments. and b) long rates on safe sovereign assets around the world are going up and are doing so in a ...
High home ownership as a driver of high unemployment by Warwick University’s Andrew Oswald:
Famously, Switzerland has 3% unemployment and 30% home ownership, while Spain has 25% unemployment and 80% home ownership.
Simple correlations of this kind do not count as (remotely) persuasive causal evidence. They are open to the objection, in ...
As the Federal Reserve ponders its policy choices at the FOMC meeting today and tomorrow, Ben Bernanke is faced with the most difficult of policy dilemmas. Does the Fed start tapering off its program of buying US$85 billion a month in US Treasury bonds and in mortgage-backed securities and thereby ...