Economics Roundtable

Technical Problems 1/21/15

The website was down for a day and a half, but is back up now.


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.


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.


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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- Recent Entries


January 29, 2015, 6:44 pm, 1412679
Salim Furth: Comparing the slow-as-molasses recovery to previous recessions shows just how uniquely terrible the Great Recession’s recovery has been.


January 29, 2015, 6:44 pm, 1412678
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January 29, 2015, 6:44 pm, 1412677
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January 29, 2015, 5:03 pm, 1412612

As President Obama prepares to roll out another tax increase proposal targeting capital gains and dividends, it’s instructive to look at what happened the last time he did that. Fortunately, the IRS just released preliminary data on tax year 2013, the year the top tax rate on capital ...


January 29, 2015, 5:03 pm, 1412611

The U.S. homeownership fell to its lowest level in 20 years at the end of 2014—levels last seen when national leaders embarked on a broad push to expand homeownership in the mid-1990s.

The ...


January 29, 2015, 5:03 pm, 1412610
The Case-Shiller house price indexes for November were released Tuesday. Zillow has started forecasting Case-Shillera month early - now including the National Index - and I like to check the Zillow forecasts since they have been pretty close.

From Zillow: Expect Recent Trend of Sub-5% Annual ...


January 29, 2015, 4:05 pm, 1412609

January 29, 2015, 4:04 pm, 1412608
(Don Boudreaux)

My colleague Pete Boettke was recently interview by The Daily Bell.  A slice:

Closer to home, at GMU we have established a new research center that I am directing and Chris Coyne is the associate director. We have continued to grow our graduate student programs under the direction ...


January 29, 2015, 4:04 pm, 1412605
Senior Fellow John Bolton discusses the latest stories in the Middle East on Fox Business' 'Lou Dobbs Tonight.'


January 29, 2015, 4:04 pm, 1412604

The Obama administration’s troubling flirtation with another mortgage meltdown took an unsettling turn on Tuesday with Federal Housing Finance Agency Director Mel Watt ’s testimony before the House Financial Services Committee.

Mr. Watt told the committee that, having received “feedback from stakeholders,” he expects to release by the end of March ...


January 29, 2015, 4:04 pm, 1412606

In an analysis of President Obama’s State of the Union tax proposals — the core of his new “middle class economics” —  the Tax Policy Center finds the ideas “would have very little net impact on middle-income households.” That,  even ...


January 29, 2015, 4:04 pm, 1412607

Millions of Americans could find their health-insurance plans endangered if the Supreme Court rules this summer that President Barack Obama’s administration has broken the law in subsidizing them. The administration created this problem by pushing through a poorly written statute and lawlessly implementing it. But congressional Republicans nonetheless should step ...


January 29, 2015, 4:04 pm, 1412601

“I can’t give you a date when it will fall, but China’s Communist Party has entered its endgame.” So says one of America’s most experienced China watchers to a small table of foreign diplomats at a private dinner in Washington, D.C. The pessimism from someone with deep connections to the ...


January 29, 2015, 4:04 pm, 1412602

The National Academy of Social Insurance (NASI), of which I’m a nominal member, published a blog post “clarifying the choices” available to reform the Social Security Disability Insurance program, which is projected to run short of funds in 2016. William J. Arnone, ...


January 29, 2015, 4:04 pm, 1412603

Let’s talk about the other kind of “money in politics.” Here are three reasons why even non-gamblers should follow political betting markets – and then I’ll touch on the various ways this wagering occurs.

They provide a fascinating snapshot of the political “marketplace”: Just as sports fans who don’t gamble are still ...


January 29, 2015, 4:04 pm, 1412600

“Republicans target disability,” say the headlines. A rule passed by the newly elected Republican-controlled House prohibits a supposedly “routine” reallocation of revenues between Social Security’s retirement and disability insurance programs, threatening dramatic benefit cuts for the disabled. In reality, the House rule may force Congress to finally enact substantive reforms ...


January 29, 2015, 3:33 pm, 1412596
Here's a story from January 13 that just came my way today thanks to a reader wootendw who posted a link as a comment to one of my articles.

The background to this story is SYRIZA leader Alexis Tsipras' "Open Letter" to German Citizens, published on Jan.13 in ...


January 29, 2015, 3:33 pm, 1412595
Here's a story from January 13 that just came my way today thanks to a reader wootendw who posted a link as a comment to one of my articles.

The background to this story is SYRIZA leader Alexis Tsipras' "Open Letter" to German Citizens, published on Jan.13 in ...


January 29, 2015, 3:23 pm, 1412594
A lot has been made of the recent set of growth figures recently published of the UK economy. Despite the seemingly positive 0.5% quarterly growth and 2.6% annual growth, the overall impression is of disappointment and despondence. I am part of this crowd, a believer that the UK economy is ...


January 29, 2015, 3:03 pm, 1412530

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, January 29, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Amidst Many Distractions, Labor Market at Center of Fed Thinking Fed Stays Patient ...


January 29, 2015, 3:03 pm, 1412531
Peter Praet, the ECB’s chief economist, said he sees things improving for the eurozone economy. Associated Press

LUXEMBOURG—European Central Bank Executive Board member Peter ...


January 29, 2015, 3:03 pm, 1412533
Pedestrians walk past the Reserve Bank of Australia in Sydney, Australia. Bloomberg News

Despite an uptick in inflation for the last quarter of 2014, Australia’s central bank ...


January 29, 2015, 3:03 pm, 1412529
The government offers its broadest snapshot of the 2014 economy Friday with the first estimate of how much the economy grew in the final quarter.


January 29, 2015, 3:03 pm, 1412532

 

What does deflation look like? As Europe and other regions flirt with deflation, Japan’s experience over the past couple of decades offers a window: it hasn’t been the Great Depression, but it has been painful–and hard to escape.


January 29, 2015, 3:03 pm, 1412524

The European Central Bank‘s battle to persuade households and consumers that inflation will pick up over coming months and years just got a little tougher.

The ECB last week ushered in a new era by launching an aggressive bond-buying program that will flood the eurozone with more than €1 trillion in ...


January 29, 2015, 3:03 pm, 1412525

The Labor Department reported that 265,000 people filed initial claims for jobless benefits last week. To find a week when fewer people filed jobless claims, you have to go back to April 2000, the tail end of the 1990s economic boom.

Recall how different that was from today: It ...


January 29, 2015, 3:03 pm, 1412526
For years, the wealth gains of typical Americans were tied to housing; housing still looms largest on the balance sheet of the middle class.  Getty Images

American ...


January 29, 2015, 3:03 pm, 1412528

By many measures, U.S. wages have been stagnant since the recession ended. It’s a sign the economy isn’t yet at full strength and another reason for the Federal Reserve to move cautiously ...


January 29, 2015, 3:03 pm, 1412527

The overall U.S. housing market still is struggling to hit its stride, but the remodeling market meanwhile has fully regained its mojo, according to a report released Thursday by the Harvard University ...


January 29, 2015, 3:03 pm, 1412523
Executive Board member of the European Central Bank Benoit Coeure on Saturday at the World Economic Forum annual meeting in Davos, Switzerland. Agence France-Presse/Getty Images

The European ...


January 29, 2015, 2:44 pm, 1412522

Much is being made of American Airlines' "bold" decision to avoid hedging its fuel costs.

I fully believe that corporations engage in way too much hedging, mostly to the benefit of big financial institutions. But let's be clear, a just out of bankruptcy counterparty is not ...


January 29, 2015, 2:05 pm, 1412519

A hotel with robot staff and face recognition instead of room keys will open this summer in Huis Ten Bosch in Nagasaki Prefecture, the operator of the theme park said Tuesday.

The two-story Henn na Hotel is scheduled to open July 17. It will be promoted with the slogan “A Commitment ...


January 29, 2015, 2:04 pm, 1412518
(Don Boudreaux)

From the Adam Smith Institute:

We are delighted to announce the creation of the John Blundell Studentships initiative, which will offer annual grants to pro-freedom students for postgraduate study.

John was a tireless promoter of the free society and the free economy. Teachers, students, activists, professionals and politicians around the ...


January 29, 2015, 2:04 pm, 1412517


January 29, 2015, 2:04 pm, 1412514

The computer screens at Sony Pictures Corporation went dark and then flickered back to life with a ghoulish image and threatening message on November 24, 2014, and thus began the most brazen cyberattack in memory. Two weeks later, a shadowy group called The Guardians of Peace, which claimed responsibility for ...


January 29, 2015, 2:04 pm, 1412516

Some columnists write New Year’s columns chronicling the mistakes over the last year. I don’t, but as this January has rolled on, it’s become clear I’ve made many about the 2016 presidential race.

One is that I assumed Mitt Romney and Jeb Bush wouldn’t run. Now it seems both are. I ...


January 29, 2015, 2:04 pm, 1412515

Lawyer, journalist and media entrepreneur Steven Brill is at it again, railing against “gluttonous” profits in the hospital sector. As we’ll see, actual profits in the hospital sector are quite modest. Moreover, such profits almost assuredly will plummet drastically were policymakers foolish enough to ...


January 29, 2015, 2:04 pm, 1412513

MIT’s Andrew McAfee lists some ideas that his crowd — other “technologists, entrepreneurs, businesspeople, and economists at American universities,” as he describes them — believe and are really sure are correct: (a) creative destruction is good news, (b)  markets allocate better than ...


January 29, 2015, 2:04 pm, 1412512

Children with disabilities who live in poor families are among the most vulnerable Americans. Caring for children with disabilities can be a difficult task for any family — but especially for families who, in the majority of cases, were poor and in need of social services even before the challenge ...


January 29, 2015, 1:33 pm, 1412508
I enjoy moments of agreement, and common sense in publications where it's usually absent. Eduardo Porter writing in the New York Timeson the lessons of Uber vs. Taxis for occupational licensing is a nice such moment.

[Uber's] exponential growth confirms what every New Yorker and ...


January 29, 2015, 1:33 pm, 1412507
I was in Manhattan on Monday night as the big snow storm got ready to hit. The Subway was closed and all vehicles were ordered off of the roads as of 11pm that Monday night. These stringent measures turned out to be too stringent. Roughly 6 inches of snow ...


January 29, 2015, 1:03 pm, 1412445

The European Central Bank‘s battle to persuade households and consumers that inflation will pick up over coming months and years just got a little tougher.

The ECB last week ushered in a new ...


January 29, 2015, 1:03 pm, 1412446

The Labor Department reported that 265,000 people filed initial claims for jobless benefits last week. To find a week when fewer people filed jobless claims, you have to go back to April 2000, the tail end of the 1990s economic boom.

Recall how different that was from today: It ...


January 29, 2015, 1:03 pm, 1412444
Executive Board member of the European Central Bank Benoit Coeure on Saturday at the World Economic Forum annual meeting in Davos, Switzerland. Agence France-Presse/Getty Images

MILAN– The ...


January 29, 2015, 1:03 pm, 1412442

More on Greece from Antonio Fatas:

Greece, EMU and democracy: One more post on Greece, possibly not the last one.

Markets are more worried about what is going on and there is more and more talk about the possibility of and exit of Greece from the ...


January 29, 2015, 1:03 pm, 1412443

Joseph Joyce:

Inequalities, National and Global: The publication of Thomas Piketty’s Capital in the Twenty-First Century brought attention to an issue that has been slowly seeping into public discourse. President Obama’s State of the Union address made it clear that we will not need to wait ...


January 29, 2015, 1:03 pm, 1412441

[Very busy day today, so for now just three quick excerpts.]

Tim Johnson:

A moral case for bank money: Finance is a skeleton that supports the development of a healthy society, not a utility that plumbs the economy together. The justification for this observation is historical. Richard Seaford has


January 29, 2015, 1:03 pm, 1412440
From the Philly Fed:

The Federal Reserve Bank of Philadelphia has released the coincident indexes for the 50 states for December 2014. In the past month, the indexes increased in 46 states and remained stable in four, for a one-month diffusion index of 94. Over the past three ...


January 29, 2015, 12:44 pm, 1412439
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January 29, 2015, 12:34 pm, 1412432
Teaser:

Some ...


January 29, 2015, 12:05 pm, 1412428

I hope Robert Mundell is proud:

The idyllic Swiss village of Grächen, flanked by better-known competitors Zermatt and Saas-Fee, has declared itself a financial microclimate, with constant exchange rate of 1.35 francs to the euro. The rate has been in place during winter months since 2011, and squarely ignores the official ...


January 29, 2015, 12:04 pm, 1412427
(January 29, 2015 10:55 AM, by David Henderson) Regular Econlog commenter Ray Lopez writes, in response to Scott Sumner: My first objection: aside from the "Open Letter" by the liberal leaning economists, that indeed predicted a 'double-dip recession' if sequestration happened, who else predicted a recession? Not the... (0 COMMENTS)


January 29, 2015, 12:04 pm, 1412426
(January 29, 2015 11:07 AM, by Alberto Mingardi) The world is pondering the odds of Mr Tsipras and Syriza succeeding. To win an election on a rather populist platform might be easy, but governing and entering into highly complex negotiations with European authorities is a different matter. I... (0 COMMENTS)


January 29, 2015, 11:23 am, 1412425
What does this mean? Stated simply, it means that ratings agencies – who try to judge how reliable a debtor is – have issued a warning about the Russian government. If traders in the bond market doubt Russia’s ability to pay back debts, it will make it much ...


January 29, 2015, 11:03 am, 1412364

By many measures, U.S. wages have been stagnant since the recession ended. It’s a sign the economy isn’t yet at full strength and another reason for the Federal Reserve to move cautiously ...


January 29, 2015, 11:03 am, 1412363

The overall U.S. housing market still is struggling to hit its stride, but the remodeling market meanwhile has fully regained its mojo, according to a report released Thursday by the Harvard University ...


January 29, 2015, 11:03 am, 1412362
For years, the wealth gains of typical Americans were tied to housing; housing still looms largest on the balance sheet of the middle class.  Getty Images

American ...


January 29, 2015, 11:03 am, 1412361
From the NAR: Pending Home Sales Stall in December

The Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 3.7 percent to 100.7 in December from a slightly downwardly revised 104.6 in November but is 6.1 percent above December 2013 (94.9). Despite last month’s decline (the ...


January 29, 2015, 11:03 am, 1412360
The Census Bureau released the Residential Vacancies and Homeownership report for Q4 2014.

This report is frequently mentioned by analysts and the media to track the homeownership rate, and the homeowner and rental vacancy rates. However, there are serious questions about the accuracy of this survey.


January 29, 2015, 10:44 am, 1412359
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January 29, 2015, 10:35 am, 1412358
After reading today’s weekly update on jobless claims the Fed’s comment yesterday that “economic activity has been expanding at a solid pace” carries more weight. Indeed, new filings for unemployment benefits dropped by a staggering 43,000 last week to a seasonally adjusted 265,000—the lowest in nearly 15 years. The shortened ...


January 29, 2015, 10:34 am, 1412357

In the Times, David Aaronovitch accuses the left of being "completely without ideas" and of sinking into the politics of "symbology" because they have "nothing else." I'm in two minds about this.

One the one hand, it seems wrong. A few decent ideas get us a longish ...


January 29, 2015, 10:04 am, 1412351

On December 24, the Islamic State (ISIS) captured Jordanian pilot Muath al Kasasbeh when his F-16 fighter jet crashed near Raqqa, Syria. After failed efforts by the United States and Turkey to secure Kasasbeh’s release, Jordan proposed a ...


January 29, 2015, 9:33 am, 1412347
This seems like a great opportunity for econ grad students.


January 29, 2015, 9:33 am, 1412346

Gov. Scott Walker said Wednesday that University of Wisconsin System faculty and staff could increase their workload to reduce the impact of his proposed $300 million budget cut.

Walker announced this week that the proposed cuts, along with a two-year tuition freeze, would be part of his two-year budget ...


January 29, 2015, 9:03 am, 1412284

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, January 29, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Amidst Many Distractions, Labor Market at Center of Fed Thinking Fed Stays Patient ...


January 29, 2015, 9:03 am, 1412283
The government will offers its broadest snapshot of the 2014 economy Friday with the first estimate of how much the economy grew in the final quarter.


January 29, 2015, 9:03 am, 1412282
The DOL reported:

In the week ending January 24, the advance figure for seasonally adjusted initial claims was 265,000, a decrease of 43,000 from the previous week's revised level. This is the lowest level for initial claims since April 15, 2000 when it was 259,000. The previous week's level ...


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January 29, 2015, 8:44 am, 1412273

Anyone who has ever litigated a valuation issue knows that valuation is more art than science. Experts often arrive at widely ...


January 29, 2015, 8:35 am, 1412272
The Federal Reserve continues to signal that it will start raising interest rates later this year, according to yesterday’s FOMC statement. But the Treasury market begs to differ. The benchmark 10-year yield fell to 1.73% yesterday, the lowest since last May. Notably, the 2-year yield, considered to be the most ...


January 29, 2015, 8:34 am, 1412271

TPC shows how President Obama would redistribute income from the rich to the poor. The President will release his budget next week, and with it, a tax plan analyzed by the Tax Policy Center. TPC’s Howard Gleckman explains that under the plan, after- tax income would ...


January 29, 2015, 8:34 am, 1412270
Teaser:

One ...


January 29, 2015, 8:34 am, 1412269
Teaser:

Before ...


January 29, 2015, 8:04 am, 1412267
(Don Boudreaux)

… is from page 98 of Robert Higgs’s 2004 volume, Against Leviathan (footnote excluded):

And make no mistake: the politicians know a good deal when they stumble into one.  Large majorities of voters continue to support the attack on drug users and dealers, notwithstanding the soaring costs of ...


January 29, 2015, 7:33 am, 1412263

For anybody who studied a foreign language in American schools, I recommend Tom Parks's bit. It describes my experience exactly.


January 29, 2015, 7:33 am, 1412262

For my money, a fine list.


January 29, 2015, 7:33 am, 1412261

Good question.

Studies have shown that straight women overestimate the importance of thinness in heterosexual men’s perception of female beauty. That is to say, women think men prefer ladies much thinner . . . than they actually do.

Related: "Why Do So Many Women Wear So ...


January 29, 2015, 7:03 am, 1412214
Peter Praet, the ECB’s chief economist, said he sees things improving for the eurozone economy. Associated Press

LUXEMBOURG—European Central Bank Executive Board member Peter ...


January 29, 2015, 6:44 am, 1412213
Mitt Romney plans to say in a speech Wednesday that the economy is "looking up," and the wealthy are improving but the middle class and poor are not.


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January 29, 2015, 6:35 am, 1412208
● Fed upbeat on U.S. economy, cites strong job gains | Reuters ● German Unemployment Drops as Growth Strengthens | Bloomberg ● Eurozone M3 Growth Accelerates; Loan To Private Sector Falls | RTT ● Japan Dec Retail Sales Up for 6th Month To Highest Since Mar | MNI ● 401(k) ...


January 29, 2015, 6:05 am, 1412207

January 29, 2015, 5:33 am, 1412204

"Variations in the sun’s output may explain some of the natural changes in Europe’s climate during the past 1,000 years, including the deadly, cold winters of the 16th and 18th centuries. Earth scientists recently discovered that as solar output dipped, so did temperatures in the North Atlantic, which ...


January 29, 2015, 5:33 am, 1412203
When inflation alarmists want to convince everyone the dollar is about to become worthless, they post this chart of the CPI.

CPI - Urban Consumers - All Items - Index



Inflationists claim that is a trend to oblivion. And actually ...


January 29, 2015, 5:23 am, 1412202

Deflation means a fall in prices (a negative inflation rate). Policy makers should generally be concerned if there is an inflation rate of less than the target of 2%.

For example, in the Eurozone  Jan 2015, the headline inflation rate is ...


January 29, 2015, 5:03 am, 1412141

January 29, 2015, 3:23 am, 1412138

Photo Credit: DonkeyHotey

December 2014January 2015CommentsInformation received since the Federal Open Market Committee met in October suggests that economic activity is expanding at a moderate pace.Information received since the Federal Open Market Committee met in December ...


January 29, 2015, 3:23 am, 1412139

What do we ‘know’ about investing — but can’t prove with stats?

msantoli:

The statistical revolutions that have overtaken sports, business and markets have bred suspicion of any observation or assertion not backed up by hard numbers.

This is a good thing in most respects. Yet experts who study these ...


January 29, 2015, 3:23 am, 1412137

I was on RT Boom/Bust yesterday.  The segment that I taped here was mostly on corporate earnings.  There’s only seven minutes of me here — so enjoy it if you will.


January 29, 2015, 3:03 am, 1412076

From Foxnews:

Wisconsin Gov. Scott Walker is calling for steep cuts to the University of Wisconsin System, while offering the network more freedom in exchange, … [H]is university plan … would cut funding by $300 million over two years…

This measure would amount to a 13% cut in state funding ...


January 29, 2015, 2:05 am, 1412075

In addition to my earlier pick of Chile, I now must nominate Sweden and Norway for this honor.  Both are wonderful countries, and in absolute terms very likely to remain strong performers.  But I think a good deal of that old Nordic magic is slipping away, and this ...


January 29, 2015, 1:03 am, 1412030
Pedestrians walk past the Reserve Bank of Australia in Sydney, Australia. Bloomberg News

Despite an uptick in inflation for the last quarter of 2014, Australia’s central bank ...


January 29, 2015, 1:03 am, 1412029

 

What does deflation look like? As Europe and other regions flirt with deflation, Japan’s experience over the past couple of decades offers a window: it hasn’t been the Great Depression, but it has been painful–and hard to escape.


January 29, 2015, 12:34 am, 1412028
Teaser:

Before ...


January 28, 2015, 11:03 pm, 1411989
Illinois and Rhode Island saw the biggest declines in December unemployment from last year. Getty Images

The jobless rate fell in all four regions of the country ...


January 28, 2015, 11:03 pm, 1411990
The national average price of gasoline is a half-cent higher today than it was yesterday, according to auto club AAA. That is the first rise in gas prices since ...


January 28, 2015, 11:03 pm, 1411991
Cleveland saw the smallest annual increase in home prices, 0.6% from November a year ago. Getty Images

Home prices in 20 major cities increased 4.3%  in year ended ...


January 28, 2015, 11:03 pm, 1411992
Salt is unloaded at the Scio Township, Mich., maintenance yard in September. The rewards for surviving last year’s punishing winter were tight supplies of road salt and some drastic ...


January 28, 2015, 11:03 pm, 1411987
The Federal Reserve releases its policy statement at 2 p.m. ET on Wednesday. Getty Images

The Federal Reserve’s policy meeting Tuesday and Wednesday is likely to yield ...


January 28, 2015, 11:03 pm, 1411988

How transitory is the inflation impact of plunging oil prices?

The answer to that question could hold the key to whether the Federal Reserve raises interest rates in midyear, as many economists still expect, or waits until September or later, just to make sure inflation is rising toward the ...


January 28, 2015, 11:03 pm, 1411984
Boris Sofman, co-founder and CEO of Anki,which raised $55 million in venture capital in 2014. Getty Images (2013)

Venture capitalists are betting big on a robot invasion.

They ...


January 28, 2015, 11:03 pm, 1411985

Inequality in America is about more than the rich and the poor. Significant income gaps are present by age, by race, by occupation, by family type, by homeownership and more.

Since 1989, the Federal Reserve has compiled detailed data on the wealth of Americans, presented in 10 different charts ...


January 28, 2015, 11:03 pm, 1411986

The Wall Street Journal’s Daily Report on Global Central Banks for Wednesday, January 28, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: China’s Local Government Debt Could Be Source of Trouble Hard Choices on Easy ...


January 28, 2015, 11:03 pm, 1411980

The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank’s economic outlook and the actions it plans to take. Much of the statement remains the same from meeting to meeting. Fed watchers closely parse changes between statements to see ...


January 28, 2015, 11:03 pm, 1411981

Here is the full statement text from the Federal Reserve’s policy-making committee.

Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.  Labor market conditions have improved further, with strong job gains and a lower unemployment rate.  ...


January 28, 2015, 11:03 pm, 1411983
The number of children on food stamps remains higher than at the start of the 2007-09 recession. Getty Images

The use of food-stamps has generally ...


January 28, 2015, 11:03 pm, 1411979
The Federal Reserve building in Washington, D.C. Reuters

What caught our eye in the Federal Reserve’s January policy statement released Wednesday.

No Rate Hikes Until at ...


January 28, 2015, 11:03 pm, 1411982

Much has been made of the stagnant wage growth so far in this expansion even as net hiring has accelerated. The Federal Reserve thinks it’s one sign that the labor market still ...


January 28, 2015, 11:03 pm, 1411977

The Federal Reserve said Wednesday it would keep short-term interest rates near zero until at least the middle of the year. The central bank’s policy committee also signaled caution about low inflation and nodded to overseas uncertainty by including new language that it would monitor international developments. Here’s how ...


January 28, 2015, 11:03 pm, 1411973
The Marriner S. Eccles Federal Reserve building in Washington, D.C. Bloomberg News

No one expected major changes in Federal Reserve policy at this week’s meeting—and sure enough, ...


January 28, 2015, 11:03 pm, 1411978
In a statement from the New York Fed, the bank said a series of so-called “term” reverse repurchase agreements will take place over February and March.


January 28, 2015, 11:03 pm, 1411974

For the first time since December 2009, Richmond Fed President Jeffrey Lacker was not the odd man out.

Mr. Lacker did not dissent over the Federal Reserve policy statement Wednesday, joining his colleagues to say the central bank would be “patient” in deciding when to start raising ...


January 28, 2015, 11:03 pm, 1411975

If you want to understand the complexity of monetary policy, you could read and interpret the Federal Reserve‘s policy statement or you could just do a word count. The results of the ...


January 28, 2015, 11:03 pm, 1411976

The Federal Reserve chooses its words carefully, though it doesn’t always say exactly what officials mean.

The central bank said in its policy statement Wednesday the economy “has been expanding at a solid pace,” and characterized recent job gains as “strong.” Both were tweaks from the December statement, ...


January 28, 2015, 10:34 pm, 1411972
Teaser:

Before ...


January 28, 2015, 10:04 pm, 1411969
(January 29, 2015 12:04 AM, by Bryan Caplan) In the face of Jeff Sachs' challenge, Bob Lawson proposes a bet on economic freedom:"Dear Tyler, I read with obvious interest your post (and the paper itself) about the endogeneity of institutions. Leaving aside my issues with the IV literature,... (0 COMMENTS)


January 28, 2015, 10:04 pm, 1411968


January 28, 2015, 9:23 pm, 1411967
FT Video has a short animation by Martin Wolf explaining why Global Trade Imbalances matter. This could be useful for A2 students, but needs to be used with caution - they will need to be quite clear first on the difference between a trade surplus or deficit and a government ...


January 28, 2015, 9:03 pm, 1411912

Much has been made of the stagnant wage growth so far in this expansion even as net hiring has accelerated. The Federal Reserve thinks it’s one sign that the labor market still ...


January 28, 2015, 9:03 pm, 1411913
The number of children on food stamps remains higher than at the start of the 2007-09 recession. Getty Images

The use of food-stamps has generally ...


January 28, 2015, 9:03 pm, 1411911

Here is the full statement text from the Federal Reserve’s policy-making committee.

Information received since the Federal Open Market Committee met in December suggests that economic activity has been expanding at a solid pace.  Labor market conditions have improved further, with strong job gains and a lower unemployment rate.  ...


January 28, 2015, 9:03 pm, 1411910

The Federal Reserve releases a statement at the conclusion of each of its policy-setting meetings, outlining the central bank’s economic outlook and the actions it plans to take. Much of the statement remains the same from meeting to meeting. Fed watchers closely parse changes between statements to see ...


January 28, 2015, 9:03 pm, 1411907

The Federal Reserve said Wednesday it would keep short-term interest rates near zero until at least the middle of the year. The central bank’s policy committee also signaled caution about low inflation and nodded to overseas uncertainty by including new language that it would monitor international developments. Here’s how ...


January 28, 2015, 9:03 pm, 1411909
The Federal Reserve building in Washington, D.C. Reuters

What caught our eye in the Federal Reserve’s January policy statement released Wednesday.

No Rate Hikes Until at ...


January 28, 2015, 9:03 pm, 1411906

The Federal Reserve chooses its words carefully, though it doesn’t always say exactly what officials mean.

The central bank said in its policy statement Wednesday the economy “has been expanding at a solid pace,” and characterized recent job gains as “strong.” Both were tweaks from the December statement, ...


January 28, 2015, 9:03 pm, 1411908
In a statement from the New York Fed, the bank said a series of so-called “term” reverse repurchase agreements will take place over February and March.


January 28, 2015, 9:03 pm, 1411905

If you want to understand the complexity of monetary policy, you could read and interpret the Federal Reserve‘s policy statement or you could just do a word count. The results of the ...


January 28, 2015, 9:03 pm, 1411903
The Marriner S. Eccles Federal Reserve building in Washington, D.C. Bloomberg News

No one expected major changes in Federal Reserve policy at this week’s meeting—and sure enough, ...


January 28, 2015, 9:03 pm, 1411904

For the first time since December 2009, Richmond Fed President Jeffrey Lacker was not the odd man out.

Mr. Lacker did not dissent over the Federal Reserve policy statement Wednesday, joining his colleagues to say the central bank would be “patient” in deciding when to start raising ...


January 28, 2015, 9:03 pm, 1411902
On mortgage rates from Matthew Graham at Mortgage News Daily: Mortgage Rates Back to Long Term Lows After Fed

Mortgage rates fell again today, and while the move wasn't big, it was enough to bring most lenders back in line with the best rates from two weeks ago. ...


January 28, 2015, 8:44 pm, 1411901
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January 28, 2015, 8:44 pm, 1411900
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January 28, 2015, 8:04 pm, 1411898

This week, President Barack Obama became the first U.S. president to preside as the chief guest at India’s annual Republic Day celebrations. What does this mean for U.S.-India relations? Coming on the heels of Indian Prime Minister Narendra Modi’s successful visit to the U.S. last September, Obama’s latest trip to ...


January 28, 2015, 7:23 pm, 1411897
This website, and the many links to videos and articles included within it, looks like a treasure trove of resources for teaching inequality.


January 28, 2015, 7:23 pm, 1411896
Read on to find out about my article in UKED Magazine on 'Real World Economics'.


January 28, 2015, 7:23 pm, 1411895
"Smoking during pregnancy remains a major health problem, resulting in the deaths of an estimated 5,000 foetuses and babies each year in the UK. It is responsible for tens of millions of pounds in extra healthcare spending."This extract from a report published today in the British Medical Journal offers clear ...


January 28, 2015, 7:03 pm, 1411831
In a statement from the New York Fed, the bank said a series of so-called “term” reverse repurchase agreements will take place over February and March.


January 28, 2015, 7:03 pm, 1411832
The Federal Reserve building in Washington, D.C. Reuters

What caught our eye in the Federal Reserve’s January policy statement released Wednesday.

No Rate Hikes Until at ...


January 28, 2015, 7:03 pm, 1411830

The Federal Reserve said Wednesday it would keep short-term interest rates near zero until at least the middle of the year. The central bank’s policy committee also signaled caution about low inflation and nodded to overseas uncertainty by including new language that it would monitor international developments. Here’s how ...


January 28, 2015, 7:03 pm, 1411828

If you want to understand the complexity of monetary policy, you could read and interpret the Federal Reserve‘s policy statement or you could just do a word count. The results of the ...


January 28, 2015, 7:03 pm, 1411829

The Federal Reserve chooses its words carefully, though it doesn’t always say exactly what officials mean.

The central bank said in its policy statement Wednesday the economy “has been expanding at a solid pace,” and characterized recent job gains as “strong.” Both were tweaks from the December statement, ...


January 28, 2015, 7:03 pm, 1411826
The Marriner S. Eccles Federal Reserve building in Washington, D.C. Bloomberg News

No one expected major changes in Federal Reserve policy at this week’s meeting—and sure enough, ...


January 28, 2015, 7:03 pm, 1411827

For the first time since December 2009, Richmond Fed President Jeffrey Lacker was not the odd man out.

Mr. Lacker did not dissent over the Federal Reserve policy statement Wednesday, joining his colleagues to say the central bank would be “patient” in deciding when to start raising ...


January 28, 2015, 7:03 pm, 1411825

Going into Wednesday, 28 January 2015, investors had believed that the Fed was likely to indicate that the U.S. economy was performing solidly enough that it would begin to implement its plan to hike short term interest rates before the end of 2015-Q2 in June 2015. ...


January 28, 2015, 7:03 pm, 1411824

Tim Duy:

FOMC Decision, by Tim Duy: If you were looking for fireworks from today's FOMC statement, you were disappointed. Indeed, you need to work pretty hard to pull a story out of this statement. It provided little reason to believe that the Fed has shifted ...


January 28, 2015, 6:44 pm, 1411823
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January 28, 2015, 6:44 pm, 1411822
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January 28, 2015, 6:44 pm, 1411821
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January 28, 2015, 6:35 pm, 1411820
The site’s servers are having a bit of a hissy fit this afternoon and so the computer seems to have eaten today’s posts. I’ll repost shortly, but there’ll probably be some broken links. Apologies…


January 28, 2015, 6:34 pm, 1411819

Territorial tax systems abroad may not be good models for corporate reform here. A new TPC paper warns against drawing quick and easy conclusions from the territorial tax systems in other developed countries. While Senate Finance Committee Chairman Orrin Hatch and House Ways and Means Committee Chairman Paul Ryan find ...


January 28, 2015, 6:34 pm, 1411818

The GOP says it wants a revolution, but who’s going to change the world? Long touted as a way to prove that tax cuts can pay for themselves by the economic growth they generate, “dynamic scoring” of federal legislation is no simple task. Today’s TPC-Hutchins Center on Fiscal and Monetary ...


January 28, 2015, 6:34 pm, 1411816

The House has instructed the Joint Committee on Taxation and the Congressional Budget Office to factor in the macroeconomic effects of tax law changes when calculating the official budget score of revenue bills. But are existing models up to the task of what’s commonly called dynamic scoring?

A group of experts ...


January 28, 2015, 6:34 pm, 1411817

President Obama will feature higher education prominently in next week’s budget—a choice that makes sense, given that educational attainment is the most straightforward pathway for economic advancement. Many of his ideas, which he highlighted in his State of the Union address, are controversial. And some don’t go far enough. But ...


January 28, 2015, 6:34 pm, 1411814

CBO’s  new budget projections are an opportunity to take stock of the country’s fiscal situation. At the risk of oversimplifying, the report contains one piece of good news, and two of bad news.  The bottom line: The sky is not falling but policymakers have fallen short of solving the ...


January 28, 2015, 6:34 pm, 1411815

Is dynamic scoring ready for prime time? At a TPC-Hutchins Center program yesterday, backers and critics debated whether congressional scorekeepers should include  macroeconomic effects of tax changes when doing a budget score. They disagreed, of course, but did agree that if the tool is used, it ought to ...


January 28, 2015, 6:34 pm, 1411813

The Washington Nationals' signing of Max Scherzer—one of the best starting pitchers in baseball—ignited a few sports-talk debates: Do the Nationals have the best rotation in the history of the game? Can DC win its first World Series title since 1924? Did the District's tax laws help ...


January 28, 2015, 6:34 pm, 1411811

President Obama’s latest tax package, which he’ll unveil in detail next week along with his new budget, would lower taxes for low-income households and significantly raise taxes for the highest income 1 percent—those making $663,000 or more, according to new Tax Policy Center estimates.  Middle-income households would see relatively ...


January 28, 2015, 6:34 pm, 1411810

In his upcoming budget, President Obama will propose to strip away the “loopholes” that permit wealthy individuals to accumulate large amounts in tax-favored retirement plans. He would prohibit a taxpayer from contributing any more to IRAs or other qualified retirement plans once his or her accounts reach a combined value ...


January 28, 2015, 6:34 pm, 1411812

“There’s no tax-driven move in baseball!” At least not for ace starting pitcher Max Scherzer. He recently signed to play for the Washington Nationals for $210 million and there’s been speculation that DC’s tax laws helped seal the deal. TPC’s Richard Auxier reminds us that taxes are a little like ...


January 28, 2015, 6:04 pm, 1411808
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January 28, 2015, 6:04 pm, 1411806

Conservatives in Washington are increasingly confident that the Supreme Court will rule this summer that the White House has gone beyond its legal authority in implementing the Affordable Care Act. Any such decision would enrage liberals. They would accuse the Republican-appointed justices of ...


January 28, 2015, 6:04 pm, 1411807

Apple just reported the most profitable quarter in the history of capitalism, netting $18 billion over the last three months.

Now Washington is going to want to take a bite.

The Beltway machine — the politicians, the lobbyists and even the industry press — have been trying to teach Apple a lesson ...


January 28, 2015, 6:04 pm, 1411805

This blog series analyzes the most important Iran news events of the past week and provides an outlook of the regime’s strategic calculus.

Outlook:

Iran and Lebanese Hezbollah’s desire for additional retaliation against Israel for the airstrike that killed IRGC Quds Force Brigadier General Mohammad Ali Allah Dadi and several Lebanese ...


January 28, 2015, 6:04 pm, 1411804

In light of President Obama’s free community college proposal, Slate’s Jordan Weissmann recently rekindled an idea he’s mentioned before: instead of just providing two years of free community college, the federal government could “zero out tuition at all of our public colleges” without ...


January 28, 2015, 5:33 pm, 1411799
Investors who plowed into Greek assets ahead of Mario Draghi's QE €60 billion a month bond-buying spree figuring the ECB could paper over this mess have been hammered nonstop recently.

Today alone, bank shares plunged 22-29% and yield on the 3-year treasury hit 16.97%.

Worst Day in History ...