Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, 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.


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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The Classic Economic Models cover micro, macro, and financial markets.

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- Recent Entries

May 25, 2015, 6:44 pm, 1480147

May 25, 2015, 6:04 pm, 1480146

Indian Prime Minister Narendra Modi came into government one year ago promising to increase India’s economic well-being. How has he done?

His government has certainly made progress. It has dropped the previous administration’s apparent assumption that sufficient growth will materialize out of thin air. Instead, it has tried to make it ...

May 25, 2015, 5:33 pm, 1480144

May 25, 2015, 4:04 pm, 1480138

This was an unusually positive week in healthcare, and in the thinking around healthcare; here are four recent developments to feel good about.

1. Transformative NEJM series reframing conflict of interest debate

In the last three issues of the New England Journal of Medicine, cardiologist and writer Lisa Rosenbaum offers a considered ...

May 25, 2015, 3:33 pm, 1480137
Andrzej Duda outed president Bronisław Komorowski, the the pro-Brussels incumbent centrist Civic Platform party president, in an election over the weekend. Komorowski was expected to win.

The Duda Victory Sent Shockwaves Through Polish Politics, and no doubt Brussels as well.

The win for the socially ...

May 25, 2015, 3:33 pm, 1480136

Minimum wage laws makes it illegal for an employee to receive less than the mandated federal, state or local minimum wage, whichever is highest for a specific geographical region. In other words, even voluntary and mutually agreeable labor agreements are outlawed under minimum wage laws. If I voluntarily agree to ...

May 25, 2015, 3:03 pm, 1480125

Europe’s Economic and Monetary Union will “very likely” survive its current crisis, but greater fiscal integration is needed for the eurozone’s future, the U.S. central bank’s No. 2 official said Thursday.

“The decision to use the single currency to drive the European project forward was a risky one, and at some ...

May 25, 2015, 3:03 pm, 1480124

The unemployment rate for foreign-born workers in the U.S. fell to 5.6% in 2014 from 6.9% in 2013, the Bureau of Labor Statistics reported Thursday, reflecting the overall firming up of the ...

May 25, 2015, 3:03 pm, 1480122
Wall Street’s biggest banks said before the Fed’s April meeting they expected the first interest rate increase in September. Bloomberg News

Wall Street’s biggest banks told the ...

May 25, 2015, 3:03 pm, 1480123

PALO ALTO, Calif.–Federal Reserve Bank of San Francisco President John Williams said Thursday inflation targets are important in creating effective monetary policy.
Speaking at a conference held by Stanford University’s Hoover Institution, Mr. Williams observed briefly that price targets like the Fed’s 2% inflation goal make the Fed “formally and ...

May 25, 2015, 3:03 pm, 1480118
Andrew Harrer/Bloomberg News

Bank of Japan Gov. Haruhiko Kuroda hit a more upbeat note about the nation’s economy Friday, saying the central bank has effectively raised its view of ...

May 25, 2015, 3:03 pm, 1480119
Bank of England Deputy Governor Minouche Shafik said she expects wage growth and productivity growth to resume in the U.K. and for the recent weakness of inflation to pass.

May 25, 2015, 3:03 pm, 1480121

PALO ALTO, Calif.–A former U.S. central bank governor opened the kimono on Federal Reserve decision making, saying little real debate happens at the bank’s monetary policy gatherings.

Speaking Thursday, Kevin Warsh told a conference held by Stanford University’s Hoover Institution that, by and large, gatherings of the rate-setting Federal Open ...

May 25, 2015, 3:03 pm, 1480117

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, May 22, 2015:

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Blackstone’s Take: ECB Turns Up Heat on Governments Fed Proposes Relaxing Rules Impacting Municipal Bonds

May 25, 2015, 3:03 pm, 1480120

Federal Reserve Bank of San Francisco President John Williams said Thursday monetary policy rules could have benefits for central bank policy making.

But in order for these rules to be truly effective, they have to be able to say something about what the Fed would do when short-term rates need to ...

May 25, 2015, 3:03 pm, 1480113
Students study math at the Ridings Federation Winterbourne International Academy in South Gloucestershire, England, in February. MATT CARDY/GETTY IMAGES

It’s an age-old tradeoff in economics: Should a ...

May 25, 2015, 3:03 pm, 1480116
At high-school graduations across the country a familiar question will be asked: What’s next? The collective answer will offer some clues about the labor market for young people, and even their future earnings.

May 25, 2015, 3:03 pm, 1480114
Shoppers—who probably do not even know the shape of the U.S. income distribution or the Gini coefficient—look at jewelry at the Cartier store on Rodeo ...

May 25, 2015, 3:03 pm, 1480112

The Commerce Department on Friday said it is planning a series of steps to smooth out statistical quirks that may be affecting quarterly gross domestic product data.

The move could make first (and fourth) quarters of the year a little less bad and the rest of the year a little ...

May 25, 2015, 3:03 pm, 1480115
Pedestrians walk down Oxford Street in central London. BOE Gov. Mark Carney said much of the recent weakness in U.K. inflation has been due to food and energy prices.

May 25, 2015, 3:03 pm, 1480110
A new report says a proposed EPA rule cutting carbon emissions from power plants will, by 2020, cause electricity prices to go up by 4.9% and drive more than ...

May 25, 2015, 3:03 pm, 1480111
The U.S. workweek starts a day late as businesses close for Memorial Day. The shortened week is still long on data. We will get a second look at the first quarter and new readings on home demand and consumer optimism.

May 25, 2015, 3:03 pm, 1480109
President Barack Obama speaks as Japanese Prime Minister Shinzo Abe at a press conference in Tokyo last year. The U.S. and Japan are the two largest economies in the ...

May 25, 2015, 3:03 pm, 1480106
Loretta Mester, president of the Federal Reserve Bank of Cleveland Bloomberg News

In a speech that didn’t comment on monetary policy outlook, Federal Reserve Bank of Cleveland ...

May 25, 2015, 3:03 pm, 1480107
Greek finance minister Yanis Varoufakis speaks at a conference in Athens. His government faces some tough decisions over the next month.  Agence France-Presse/Getty Images

As Greece ...

May 25, 2015, 3:03 pm, 1480108
A BOE taskforce will look into the economic and financial implications for the U.K. if it votes to leave the EU.

The Bank of England is drawing up plans to ...

May 25, 2015, 2:44 pm, 1480105

May 25, 2015, 2:44 pm, 1480104

May 25, 2015, 2:05 pm, 1480103

That is the topic of his column today, I had not seen this very good point before:

One possibility is that the numbers are missing the reality, especially the benefits of new products and services. I get a lot of pleasure from technology that lets me watch streamed performances ...

May 25, 2015, 2:04 pm, 1480102
(May 25, 2015 01:22 PM, by David Henderson) Dan Klein, with whom I've been arguing about designer babies lately, recently suggested that I post about an article I wrote for Reason 26 years ago: Henderson's Law of Heroic Movies. The Introduction "David, I rented a movie for tonight... (0 COMMENTS)

May 25, 2015, 1:33 pm, 1480100

America’s Big Three airlines (Delta, American and United) want to block increased foreign competition in the US and prevent some international airlines from entering the US market? Read about it here in Forbes.

This would be a good time to invoke the wisdom of French economist Frederic Bastiat:

Treat all economic ...

May 25, 2015, 1:33 pm, 1480099

This video is called “Ronald Reagan: Memorial Day Speech” on YouTube, but it’s actually from Reagan’s inaugural address on January 20, 1981.

The post Ronald Reagan: Some thoughts for Memorial Day appeared first on AEI.

May 25, 2015, 1:03 pm, 1480076
Greek finance minister Yanis Varoufakis speaks at a conference in Athens. His government faces some tough decisions over the next month.  Agence France-Presse/Getty Images

As Greece ...

May 25, 2015, 1:03 pm, 1480075
Loretta Mester, president of the Federal Reserve Bank of Cleveland Bloomberg News

In a speech that didn’t comment on monetary policy outlook, Federal Reserve Bank of Cleveland ...

May 25, 2015, 1:03 pm, 1480074

Why hasn't the digital technological revolution had a bigger impact on productivity?:

The Big Meh, by Paul Krugman, Commentary, NY Times: ...Everyone knows that we live in an era of incredibly rapid technological change, which is changing everything. But what if what everyone knows is wrong? .... A growing ...

May 25, 2015, 12:05 pm, 1480069

May 25, 2015, 12:04 pm, 1480068
(May 25, 2015 11:20 AM, by Scott Sumner) I don't recall many articles written by noeconservatives discussing how certain aspects of modern global instability might have been caused by US intervention. Perhaps that's because they favor intervention. I don't recall reading many articles written by progressives discussing how... (0 COMMENTS)

May 25, 2015, 11:03 am, 1480026
Loretta Mester, president of the Federal Reserve Bank of Cleveland Bloomberg News

In a speech that didn’t comment on monetary policy outlook, Federal Reserve Bank of Cleveland ...

May 25, 2015, 11:03 am, 1480025
According to (see graph at bottom), gasoline prices aredown to a national average of $2.75 per gallon. One year ago for the week of Memorial Day, prices were at $3.75 per gallon, and for the same week two years ago prices were $3.70 per gallon.

Ten years ...

May 25, 2015, 10:04 am, 1480022
(Don Boudreaux)

The University of Virginia School of Law’s great economist Charlie Goetz repeatedly said (at least when I was a ...

May 25, 2015, 10:04 am, 1480021

“Yours has the suffering been,/ The memory shall be ours,” American poet Henry Wadsworth Longfellow wrote in “Decoration Day”, a poem to commemorate the national holiday known today as Memorial Day.  Over the course of a year, around 4.4 million people pay tribute to the memory of our military dead ...

May 25, 2015, 8:04 am, 1479992
(Don Boudreaux)

… is from page 110 of Daniel Griswold’s superb 2009 book, Mad About Trade (footnote excluded):

What allowed the United States ...

May 25, 2015, 7:34 am, 1479990

[Well, I like to think I'm a non-lunatic, when I'm having a good day. But I might be speaking only for myself.]

Brad DeLong (a card-carrying member of the non-lunatic left) says:

"The non-lunatic right holds that market economies are indeed macroeconomically unstable but they can be balanced by minimal ...

May 25, 2015, 7:33 am, 1479988

I had wondered about this: every few months we hear that "If don't do something really soon, global warming will be awful and irreversible." This is a useful history of these predictions.

May 25, 2015, 7:33 am, 1479989

May 25, 2015, 7:33 am, 1479986

Funny how that works.

May 25, 2015, 7:33 am, 1479985

Nice story about my older daughter's soon-to-be-former employer.

A follow-up interview with one of the school's current eighth-graders and future President of the United States.

May 25, 2015, 7:33 am, 1479987

Add this to the "Government is the name we give to the things we together"--Ha!--file.

May 25, 2015, 7:33 am, 1479984

I especially like this bit:

[If you have seen] thecollapseof the consensus oncholesteroland heart disease– that one collapsed overnight. I can only hope that sanity will eventuallyprevailwith theclimateproblem as well.

May 25, 2015, 7:03 am, 1479923
Greek finance minister Yanis Varoufakis speaks at a conference in Athens. His government faces some tough decisions over the next month.  Agence France-Presse/Getty Images

As Greece ...

May 25, 2015, 6:44 am, 1479922

Bent Flyvbjerg of Oxford University speaks with EconTalk host Russ Roberts about the political economy of megaprojects--massive investments of a billion dollars or more in infrastructure or technology. Flyvbjerg argues that such projects consistently end up costing more with smaller benefits than projected and almost ...

May 25, 2015, 6:04 am, 1479921

On Memorial Day, we honor the lives of military men and women who died in the service of their country.

On this day of remembrance, we can also pause to consider the sacrifices of those who serve today. The military is held in the highest esteem by the American people.

The Gallup ...

May 25, 2015, 5:03 am, 1479899

May 25, 2015, 4:44 am, 1479898

To prevent it from defaulting on its debt, the Greek government might need to introduce a new domestic currency, in parallel to the euro. This column, the first in a two-part series, compares the current proposals for a parallel currency and discusses how such a policy instrument could promote economic ...

May 25, 2015, 4:05 am, 1479897

Given that non-financial total corporate debt is estimated by McKinsey to amount to $12.5tn, Chinese companies are paying on a nominal basis some $812bn in interest payments each year. In real terms, this amounts to $1.35tn. This is not only significantly more than China’s projected total industrial profits this year; ...

May 25, 2015, 2:44 am, 1479866

On 15-16 April 2015, the IMF organised the third conference on ‘Rethinking Macro Policy’. In this column, IMF’s Chief Economist Olivier Blanchard presents his personal takeaways from the conference. Though progress in macro policy is undeniable, confusion is unavoidable given the complex issues that remain to be settled. 

May 25, 2015, 2:05 am, 1479865

R. asks me:

I’ve been reading your blog for years and it remains my favorite. I am an attorney planning to travel for 1-2 months in Eastern/Northern Asia and Europe this fall before starting work at a law firm. Since you are so widely traveled, I would love to read a ...

May 24, 2015, 11:33 pm, 1479841

Watch the trailer above for the excellent Kickstarter-funded 2013 feature documentary FrackNation, the antidote to the two distorted, error-filled “GasLand” propaganda movies. FrackNation is available on NetFlix and Amazon, I just watched it today, and I highly recommend it. Here’s some information from the FrackNation ...

May 24, 2015, 11:03 pm, 1479825
Revenue per available room (RevPAR) is now at $85.50. In May 2009, RevPAR had fallen to $58.39. So, RevPAR is up 46.9% over the last 6 years - and the occupancy rate will probably be at a new record high this year. A great year for hotels!

May 24, 2015, 9:33 pm, 1479819
The Spanish economy will supposedly grow at three percent. The bad news is Spanish employment is well over 20 percent and is also expected to stay that way.

Angry voters unhappy with that setup took it out big time on PP, the party of prime minister Mariano Rajoy.

May 24, 2015, 8:04 pm, 1479812

May 24, 2015, 6:34 pm, 1479811

All that summer of 2008, decision-makers in Washington, D.C., were hoping for a soft landing – or so they said at the time. That was, after all, what happened in 1998, after the Russian debt crisis; or in March 2000, when the dot-com bubble collapsed. That speculative frenzy in tech-stock ...

May 24, 2015, 6:04 pm, 1479809

The battle against the Islamic State (ISIS) has been a tale of one step forward, two steps back.

Iraqi forces may have recaptured Saddam Hussein’s hometown of Tikrit, and Syrian Kurds may have rebuffed ISIS at Kobane, but the loss of Palmyra will resonate for several reasons.

First, there’s the strategic angle. ...

May 24, 2015, 5:33 pm, 1479807
To celebrate my return to the LSE, I'm giving away free copies of my revised e-Book on Tuesday and Wednesday. While the book ususally sells for $1, I will drop the price to $0. The "bang per buck" will be quite high if you click on the right ...

May 24, 2015, 4:04 pm, 1479805
(Don Boudreaux)

Let’s continue to explore the argument that counsels humility when ...

May 24, 2015, 2:05 pm, 1479776

The author is Michael North, and this new and excellent book, when it comes to the earlier centuries, emphasizes the role of Swedes and Germans in shaping a region of prosperity and trade.  The most interesting section (starts p.239) is about the 1920s, when the Baltic nations underwent ...

May 24, 2015, 2:05 pm, 1479775

John Nash and his wife died yesterday in a car accident.

CNN: Nash, who won the Nobel Prize for Economics in 1994, was known for his work in game theory, and his personal struggle with paranoid schizophrenia. His life story inspired the 2001 Oscar-winning film “A Beautiful Mind” starring Russell ...

May 24, 2015, 1:33 pm, 1479774
One way or another the crisis in Greece is highly likely to come to a head in June.

Greek finances are in such sorry shape it needs a third bailout or it will be unable to meet payment obligations in August. And unless an agreement in June is reached ...

May 24, 2015, 1:03 pm, 1479765

May 24, 2015, 1:03 pm, 1479764
From the WSJ: Greece Won’t Meet IMF Repayments in June, Interior Minister Says

Greece said Sunday that it won’t have the money it is due to repay to the International Monetary Fund next month unless it strikes a deal with international creditors over further rescue funding.

Interior Minister ...

May 24, 2015, 12:05 pm, 1479760

May 24, 2015, 12:04 pm, 1479759
(May 24, 2015 01:06 PM, by David Henderson) The famous game theorist John Nash and his wife Alicia were killed in a traffic accident yesterday in New Jersey. He was 86. I met him and had lunch with him when he came to speak at the Naval Postgraduate... (1 COMMENTS)

May 24, 2015, 11:03 am, 1479750

U.S. retail gasoline prices last week averaged over $2.80 a gallon, thirty cents higher than a month ago. The preliminary University of Michigan index of consumer sentiment for May was 88.6, down 7 points from the month before. Are these two developments related?

The consumer ...

May 24, 2015, 10:04 am, 1479748
(Don Boudreaux)

… is from pages 56 of Angus Deaton’s 2013 book, The Great Escape:

There is not a single country in the ...

May 24, 2015, 10:04 am, 1479747

May 24, 2015, 10:04 am, 1479746
It has been a while since I had last talked to Alan. I knew at the time he was at issue with a stance the Center for American Progress was taking on Student Loans which surprising are supported by some of our more popular consumer advocates. Kind of makes sense ...

May 24, 2015, 7:33 am, 1479731

Isn't capitalism grand?

One of the most inspiring (or annoying) moments in life is when you hear these kinds of stories: people who come up with incredibly stupid ideas and achieve the unlikely—becoming millionaires.

May 24, 2015, 7:33 am, 1479730

Roger L. Simon. I think he's a bit too pessimistic.

But not much.

And speaking of time flying, what I would love to see from the Republican candidates is some specific, real detail on how they intend to deal with this global conflagration that seems to be spreading ...

May 24, 2015, 7:33 am, 1479729

May 24, 2015, 5:33 am, 1479708

Longer than I would have guessed.

May 24, 2015, 5:33 am, 1479707

(p. 46) It was never that layoffs were anathema to Telling as such; he just resented the sloppiness of a 10-percent across-the-board layoff when some areas of the company should have been cut by 40 percent and some built up by half.


Katz, Donald ...

May 24, 2015, 4:04 am, 1479694
My regular column is available to subscribers on This is an excerpt. Britain’s drop into deflation has produced a mix of curiosity, celebration and, in some quarters, alarm. The fact that the consumer prices index (CPI) last month...

May 24, 2015, 2:05 am, 1479678

The classical MU [differential marginal utility of money] argument has, in my view, been moderated by the findings of behavioral economics, namely loss-aversion. Taking from the higher-incomes to give it to the lower incomes may be negative utility as the higher incomes are valuing their loss at ...