Economics Roundtable

March 2017 Fed Funds Rate

What is the effect of a 0.25% change in the Fed Funds rate?.

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March 2017 Payroll Employment

Payroll employment has not grown impressively since 2000. Some baby-boomers retired, but that does not totally account for this graph.

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May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

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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 .

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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?

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The Economics Roundtable is sponsored by EconModel.

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

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July 28, 2017, 8:04 am, 1766784

July 28, 2017, 7:34 am, 1766782

NYC and DC are both a bit lower than I would have expected.

July 28, 2017, 7:34 am, 1766781

Van the Man + the blues = I'm so there.

July 28, 2017, 7:23 am, 1766780

Transactional utility is a term to describe the happiness a consumer gets from the perceived value of the deal. ‘Transactional utility’ was developed by Richard Thaler and is said to be the difference between the actual price and your reference price – the price you expect to pay.

Example, Suppose you ...

July 28, 2017, 5:34 am, 1766759

Almost needless to say, this is an LA story.

July 28, 2017, 5:03 am, 1766747

The ...

July 28, 2017, 4:04 am, 1766746

“The goal is a plan that reduces tax rates as much as possible, allows unprecedented capital expensing [for businesses], places a priority on permanence, and creates a system that encourages American companies to bring back jobs and profits trapped overseas,” it said.

No Border Adjustment Tax, even Ryan says that, ...

July 28, 2017, 2:04 am, 1766723

1. Yiyun Li, Dear Friend, from My Life I Write to You in Your Life.  One of the few books that have a perfect title.  These are a cross between short stories, ruminations, and essays.  Yiyun Li is from China, yet she refuses to write ...

July 28, 2017, 12:34 am, 1766692
By: Mateusz Machaj

In the recent months political atmosphere in Poland has become more nationalist, whichis reflected in a growing anti-foreign attitude toward capital flows. The general argument used relatetothe apparently negative aspect of interest payments and dividends on invested capital being ...

July 27, 2017, 9:33 pm, 1766659

Thursday evening links

1. Graphic of the Day I (above). Amazon and Facebook were in the news this week for “joining an ...

July 27, 2017, 9:03 pm, 1766627
From Merrill Lynch:

On balance, [inventory] data added 0.3pp to 2Q GDP tracking, bringing us up to 2.4% heading into tomorrow's advance release.

From the Altanta Fed: GDPNow

The final GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2017 is 2.8 ...

July 27, 2017, 4:04 pm, 1766559
(Don Boudreaux)

As many knowledgeable readers of Nancy MacLean’s fabulist tale, Democracy in Chains, have pointed ...

July 27, 2017, 3:33 pm, 1766557

July 27, 2017, 3:03 pm, 1766526
The automakers will report July vehicle sales on Tuesday, August 1st.

Note: There were 26 selling days in July 2017, the same as in July 2016.

From WardsAuto: Forecast: July U.S. LV Sales Fall Behind Year-Ago

A WardsAuto forecast calls for U.S. light-vehicle sales to reach ...

July 27, 2017, 2:34 pm, 1766525
By: William D. Hartung

You wouldn’t know it, based on the endless cries for more money coming from themilitary,politicians, andthe president, but these are the best of times for the Pentagon. Spending on the Department of ...

July 27, 2017, 2:04 pm, 1766524

Here’s the video of the Heritage session on occupational licensing. All the talks were good; short and to the point. Maureen Ohlhausen, Acting Chairman of the Federal Trade Commission leads off, Paul Larkin discusses some of the legal issues and legislation, my comments begin around 28:20 followed by Dexter ...

July 27, 2017, 2:04 pm, 1766523

There is a new paper in the JPE on this, with encouraging results:

A Pari-Mutuel-Like Mechanism for Information Aggregation: A Field Test inside Intel
Benjamin Gillen, Charles Plott & Matthew Shum
Journal of Political Economy, August 2017, Pages 1075-1099

A new information aggregation mechanism (IAM), developed via ...

July 27, 2017, 2:04 pm, 1766522

July 27, 2017, 1:33 pm, 1766519

Take the latest ‘News IQ Quiz’ from the Pew Research Center

How much do you know about the news and current events?

Test your knowledge of prominent people and major events in the news by taking this 10-question quiz from the Pew Research ...

July 27, 2017, 1:03 pm, 1766488

BEIJING, China – The world is pushing back against China’s foray into semiconductors.

China’s Tsinghua Unigroup Ltd. is hunting for advanced semiconductor technology to turn itself into a computer-chip powerhouse. Japan’s Toshiba Corp. is fighting for survival and is selling its advanced semiconductor unit. Unigroup has lots of ...

July 27, 2017, 1:03 pm, 1766487

WASHINGTON – The U.S. and China are battling over the future of semiconductors – a scene reminiscent of U.S. confrontations with Japan in the 1980s and early 1990s.

In some ways, the story lines were similar. Global trade was slowing. The U.S. worried it would be eclipsed economically by a rising ...

July 27, 2017, 1:03 pm, 1766486

July 27, 2017, 1:03 pm, 1766485

Narayana Kocherlakota:

Macroeconomists Can't Keep Ignoring Race and Gender: The models that researchers build to understand the economy tend to be blind to race and gender, as if macroeconomic policies typically affect blacks the same as whites and women the same as men. Increasingly, that's looking like the wrong ...

July 27, 2017, 1:03 pm, 1766484

Tim Duy:

The Federal Reserve completed its July meeting with statement that pretty much everyone anticipated in advance. Interest rates were left unchanged and the Fed opened the door to begin balance sheet reduction "relatively soon." That means September. There was no reason to believe that the Fed does not still ...

July 27, 2017, 12:04 pm, 1766480

July 27, 2017, 11:03 am, 1766447
The Census Bureau released the Residential Vacancies and Homeownership report for Q1 2017.

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

July 27, 2017, 11:03 am, 1766446
From the Kansas City Fed: Tenth District Manufacturing Activity Expanded Moderately

The Federal Reserve Bank of Kansas City released the July Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity expanded ...

July 27, 2017, 10:36 am, 1766445

One of the most elementary distinctions in economics (and in life) is that between instruments and objectives. Interest rates, for example, are only an instrument whereas the objectives are price and output stability. I fear, though, that this distinction is being overlooked by those Brexiters aroused by what ...

July 27, 2017, 10:34 am, 1766444

By Poul Thomsen

July 27, 2017

Dubrovnik, Croatia. Countries in the region should continue working on good governance for higher growth (photo: Album/Prisma/Newscom)

In many ways, Central, Eastern, and Southeastern Europe is an incredible success ...

July 27, 2017, 9:03 am, 1766409
Zuma Press

The Commerce Department on Friday releases its first estimate of second-quarter gross domestic product, a broad measure of overall economic growth. The latest figures mark eight years since the last recession ended and a long but ...

July 27, 2017, 9:03 am, 1766408
The DOL reported:

In the week ending July 22, the advance figure for seasonally adjusted initial claims was 244,000, an increase of 10,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 233,000 to 234,000. The 4-week moving average was 244,000, unchanged ...

July 27, 2017, 8:36 am, 1766407

The trend remains your friend if financials have been overweighted in your portfolio. Measured by one-year performance, this sector is red hot in absolute and relative terms, based on a set of proxy ETFs.

Tech is a close second for one-year sector returns. Goldman Sachs forecasts that the ...

July 27, 2017, 8:04 am, 1766406
(Don Boudreaux)

… is from page 62 of Randy Simmons’s 2011 Revised Edition of his and the late William ...

July 27, 2017, 8:04 am, 1766405
by Dale Coberly FIX THE DEBT WANTS TO SAVE SOCIAL SECURITY BUT WHY? I received an email a few days ago from Chris Dreibelbis,Fix the Debt, purporting to explain “why the Social Security Trustees urge action.” “Fix the Debt” is a project of the Committee for a Responsible Federal ...

July 27, 2017, 7:34 am, 1766404


Related Stories"The Arby's ...

July 27, 2017, 7:34 am, 1766403

This is kinda gross and may keep you out of the water, but, hey, I'm just providing a public service.

July 27, 2017, 7:03 am, 1766372

A wave of Central American children arriving at the U.S. border in recent years was driven by violent conditions at home as much or more than economic variables, according to a new study.

Economist Michael Clemens, a senior fellow at the Center for Global Development think tank in ...

July 27, 2017, 6:44 am, 1766371

A special thank you to Alice Temnick for creating this week's Extra.

Do you or have you known someone who has donated, is in need of, or has received a transplanted organ? If so, ...

July 27, 2017, 5:34 am, 1766368

As many puns on state names as you could probably want.

July 27, 2017, 5:34 am, 1766367

Compared to CT scans, significantly better.

July 27, 2017, 5:23 am, 1766366
Economic growth measures the change in real GDP (national income adjusted for inflation; ONS call it chained volume measure of GDP) In 2016 the UK economy grew by 1.8% –  (compared to 2.2% in 2015. In the first half of 2017, the economy has grown by just 0.5% (annualised growth of ...

July 27, 2017, 5:03 am, 1766342

The Federal Open Market Committee (FOMC) are the decision makers at the Federal Reserve who meet every six weeks to decide how to set short term interest rates in the United States. They held their most recent meeting on Wednesday, 26 ...

July 27, 2017, 4:05 am, 1766341

Since 2008, Ford has been continually expanding its Asia Pacific odor laboratory in Nanjing, China. Today, the team consists of 18 ‘super smellers’, who conduct about 300 odor tests each year on materials and components that go into its Asia Pacific vehicles.

…Every year Ford runs an application process to ...

July 27, 2017, 2:04 am, 1766319

That is the topic of my latest Bloomberg column, here is one bit:

…consider the general logic of labor substitution. Machines and software are often very good at “making stuff” and, increasingly, at delivering well-defined services, such as when Alexa arranges a package for you. But machines ...

July 27, 2017, 12:34 am, 1766300
By: Thorsten Polleit

The Federal Reserve (Fed) is widely expected to continue to tighten its monetary policy this year. According to a latest Reuters Poll, the Fed is likely to start shrinking its US$4 trillion balance sheet in September and, moreover, raise ...

July 27, 2017, 12:04 am, 1766299
(July 27, 2017 02:00 AM, by David Henderson) "Capitalism" has become a fighting word in the battle between East and West and for men's minds everywhere; and, like all slogans, it means many things to many men. To some "capitalism" is a term of opprobrium, signifying the oppression... (0 COMMENTS)