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.


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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March 30, 2015, 11:03 am, 1447618
Getty Images

Look out economics bloggers. There’s a new guy in town.

Former Federal Reserve Chairman Ben Bernanke is launching his own economics blog Monday at 6 a.m. ET.  It ...


March 30, 2015, 11:03 am, 1447617

MONDAY

Fed’s Fischer speaks on “Nonbank Financial Intermediation, Financial Stability and the Road Forward” at a conference in Stone Mountain, Ga. at 7:15 p.m. EDT

TUESDAY

ECB’s Makuch speaks in Slovakia at 1200 GMT Richmond Fed’s ...


March 30, 2015, 11:03 am, 1447616

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, March 30, 2015:

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


Highlights

Hilsenrath’s Take: Bernanke to Seniors: Don’t Blame Me for Your Low CD Fed’s Janet Yellen ...


March 30, 2015, 11:03 am, 1447615

The Federal Reserve’s preferred measure of inflation in February fell short of the central bank’s 2% target for the 34th straight month.

The price index for personal consumption expenditures was up only ...


March 30, 2015, 11:03 am, 1447614
From the NAR: Pending Home Sales Rise in February Behind Solid Gains in Midwest, West

The Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 3.1 percent to 106.9 in February from a slight downward revision of 103.7 in January and is now 12.0 percent above ...


March 30, 2015, 10:44 am, 1447613
A


March 30, 2015, 10:35 am, 1447612
Consumer spending in the US revived last month, rising 0.1% in February vs. January, the Bureau of Economic Analysis reports. The gain is slightly below expectations among economists, although the increase is the first monthly advance since last November. The directional shift back into positive territory is encouraging, but a ...


March 30, 2015, 9:33 am, 1447607
Ben Bernanke has started a blog. Where did he ever come up with that title?


March 30, 2015, 9:33 am, 1447606

March 30, 2015, 9:33 am, 1447605
On 3/29/2015 4:32 PM, Adam Ozimek wrote:

John, I appreciated your recent post in reply to mine on carbon taxes. I've written a reply here where I've tried to make my point more explicitly and clearly, because I think there was some misunderstanding in terms of the case I was ...


March 30, 2015, 9:33 am, 1447604

The debate over the appropriate level for a central bank’s inflation objective reminds us of a 40-year-old Sherlock Holmes movie called “The Seven-Per-Cent Solution.” Convinced that Holmes’ addiction to cocaine (the solution in the title) had made him delusional, Watson took the master sleuth to Vienna to be treated ...


March 30, 2015, 9:03 am, 1447542

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, March 30, 2015:

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


Highlights

Hilsenrath’s Take: Bernanke to Seniors: Don’t Blame Me for Your Low CD Fed’s Janet Yellen ...


March 30, 2015, 9:03 am, 1447541

The Economic Journal was among the first journals to come into existence. This is the first article of the 125th anniversary issue. The remaining articles are from notable economists (e.g. Stiglitz, Heckman, and many more) discussing seminal work that appeared in the Journal (the articles are relatively short):

Economic Journal ...


March 30, 2015, 9:03 am, 1447540
The BEA released the Personal Income and Outlays report for February:

Personal income increased $58.6 billion, or 0.4 percent ... in February, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE)increased $11.8 billion, or 0.1 percent.
...
Real PCE -- PCE adjusted to remove price ...


March 30, 2015, 8:44 am, 1447539

Abstentions in European Council voting are generally treated as silent consent, but in some cases a quorum of abstentions can block an otherwise unanimous decision. This column explores the relative merits of regimes with such constructive abstention rules. It shows that such rules combine the information aggregation aspects of majority ...


March 30, 2015, 8:35 am, 1447538
The US real estate market has been sluggish in recent history, but the latest numbers hint that the sector may enjoy a stronger run of growth in the spring. The supporting evidence is still thin, although the sales trend has clearly improved in February, particularly for purchases of newly built ...


March 30, 2015, 8:35 am, 1447537

Congress is in recess and the Daily Deduction will post Mondays until it reconvenes. We’ll be back to our regular schedule on April 13. 

With just over two weeks till Tax Day, Treasury wants to clarify Affordable Care Act tax facts. It released fact sheets on common exemptions from the ...


March 30, 2015, 8:05 am, 1447534

TEDx GMU has some interesting speakers. Always an excellent show. TEDxGeorgeMasonU Presents  The 4th Annual TEDx Conference  “Gathering STEAM”  at George Mason University  Sunday, May 3, 2015 at 10:30 a.m. 


March 30, 2015, 8:05 am, 1447533

Self-recommending!

For those of you who wonder what “self-recommending” means, now you ought to know…

Addendum: Modeled Behavior adds comment.


March 30, 2015, 8:05 am, 1447532

It is a busy morning, here is part of an email from an email from Cato:

The Cato Institute welcomes Peter Goettler, a former managing director at Barclays Capital, as its new President and CEO, effective April 1. Current CEO John Allison is retiring after more than two exemplary years on ...


March 30, 2015, 8:04 am, 1447531
(Don Boudreaux)

… is from page 12 of Julian Simon’s 1997 essay “More People, Greater Wealth, Expanded Resources, Healthier Environment,” as reprinted in the excellent 2000 collection Population: The Ultimate Resource (Barun S. Mitra, editor):

Population growth does not lower the standard of living – all the evidence agrees.  And the ...


March 30, 2015, 7:33 am, 1447525
Illustration by Andrew Rae, source New York Times
Adam Davidson has a very nice New York Times Magazine article, "Debunking the Myth of ...


March 30, 2015, 7:33 am, 1447523

Daron Acemoglu and James Robinson write, in effect, "Not necessarily."

(And guess what? Innovation seems to respond to incentives. Who knew?)


March 30, 2015, 7:33 am, 1447524

Oh, I just bet they do.


March 30, 2015, 7:33 am, 1447522

With this information I hadn't known:

But these explanations don’t help us explain political differences among Jews across countries or over time. American Jews share a religious tradition, historical inheritance, and minority status with most Jewish communities around the globe —and yet only Jews in the United ...


March 30, 2015, 7:33 am, 1447520

I certainly agree with Mr. Greenspun's last paragraph: the opportunity cost of college is often underemphasized, even neglected.

But this is too strong:

Economists, who get paid to teach at colleges, experiment with ways to get more young people from poorer-than-average families to become customers of colleges. Nobody ...


March 30, 2015, 7:33 am, 1447519

Matthew Continetti does a superb job hammering James Wolcott and by extension all those who so fear and complain about the "very rich". Just terrific.

The character that emerges from McLean’s description of Hobson, I hasten to add, is sympathetic and winning. She was not born to ...


March 30, 2015, 7:33 am, 1447521

George Leef nicely makes the case for the 1971Griggs v. Duke Power decision as the root of the problem.

But it would be nice if there were a test of this. I haven't seen one.


March 30, 2015, 7:33 am, 1447518
Jennie Bai and Or Shachar

Since their inception in 2002, credit default swap (CDS) indexes have gained tremendous popularity and become leading barometers of the credit market. Today, investors who want to hedge credit risk or to speculate can choose from a broad menu of ...


March 30, 2015, 7:03 am, 1447465

Of the many battles Ukraine and Russia are fighting, an argument about whether to call the $3 billion Kiev owes Moscow at the end of this year “official” or “private” debt may seem insignificant.


March 30, 2015, 7:03 am, 1447464
A cab makes its way across 42nd Street in the snow during the first day of spring in New York on March 20, 2015. Business economists expect strong consumer ...


March 30, 2015, 7:03 am, 1447463
Getty Images

Look out economics bloggers. There’s a new guy in town.

Former Federal Reserve Chairman Ben Bernanke is launching his own economics blog Monday at 6 am ET.  It ...


March 30, 2015, 7:03 am, 1447462

MONDAY

Fed’s Fischer speaks on “Nonbank Financial Intermediation, Financial Stability and the Road Forward” at a conference in Stone Mountain, Ga. at 7:15 p.m. EDT

TUESDAY

ECB’s Makuch speaks in Slovakia at 1200 GMT Richmond Fed’s ...


March 30, 2015, 6:44 am, 1447461
A


March 30, 2015, 6:44 am, 1447460

David Skarbek of King's College London and author of The Social Order of the Underworld: How Prison Gangs Govern the American Penal System talks with EconTalk host Russ Roberts about the written and unwritten rules in America's prisons for the most violent and dangerous criminals. ...


March 30, 2015, 6:35 am, 1447459
● Business group’s outlook for U.S. economy improves | LA Times ● Eurozone economic sentiment improves in March | European Commission ● Economic Confidence Shows Euro-Area Recovery Defies Greek Risks | Bloomberg ● Japan Feb Factory Output Slumps on Weak Exports; Q1 Seen Up | MNI ● UK Financial Services ...


March 30, 2015, 5:33 am, 1447456
An interesting article came my way from UBS analyst Julien Garran on the driver for gold. I do not have a link to share so excerpts will have to do.

Garran's article is one of the better one's I have seen. Unlike others, Garran does not cite jewelry, ...


March 30, 2015, 5:03 am, 1447419

Today, we're going to follow up an observation we made when we examined the major trends for how the consumer spending patterns of Americans has changed from 1984 through the present, where we observed that since 2009, increases in expenditures for health insurance are ...


March 30, 2015, 5:03 am, 1447418

March 30, 2015, 5:03 am, 1447417

I am here today:

Royal Economic Society Conference 2015
University of Manchester, United Kingdom

March 30, 2015

09:00 to 11:00 Registration and Coffee/Tea, University Place Foyer 11:00 to 12:30 Special Sessions A 12:30 to 13:30 Buffet Lunch, Eats Restaurant 13:30 to 14:45 Sargan Lecture: Michael Keane: Labor Supply: ...


March 30, 2015, 5:03 am, 1447416

Why doesn't the public know how successful Obamacare has been?:

Imaginary Health Care Horrors, by Paul Krugman, Commentary, NY Times: ...Representative Pete Sessions of Texas, the chairman of the House Rules Committee, recently ... declared the cost of Obamacare “unconscionable.” If you do “simple multiplication,” he insisted, ...


March 30, 2015, 4:05 am, 1447415

Here is the abstract of his piece “Air Conditioning, Migration, and Climate-Related Rent Differentials“:

This paper explores whether the spread of air conditioning in the United States from 1960 to 1990 affected quality of life in warmer areas enough to influence decisions about where to live, or to change ...


March 30, 2015, 4:04 am, 1447414
A


March 30, 2015, 2:05 am, 1447370

That is from Dianne Theodora Kenny, via Ted Gioia.  Kenny notes:

For male musicians across all genres, accidental death (including all vehicular incidents and accidental overdose) accounted for almost 20% of all deaths. But accidental death ...


March 30, 2015, 1:03 am, 1447356
A cab makes its way across 42nd Street in the snow during the first day of spring in New York on March 20, 2015. Business economists expect strong consumer ...


March 30, 2015, 12:44 am, 1447355
A


March 30, 2015, 12:34 am, 1447354

EP was traveling and reporting last week. He tackled a task too tricky for the time allotted to it when he returned home.

Back next week!


March 30, 2015, 12:04 am, 1447352

1. Another Week, Another Couple of Drug War Deaths: Body Count Up to 15 for 2015.

2. Killed by Police:


March 29, 2015, 11:33 pm, 1447351
The Socialists were routed in the second round of French elections this weekend. The centre-right UMP party led by Nicholas Sarkozy was the clear winner but Marone Le Pen's National Front had it best performance ever at the local level although it did not win any départements.

The Financial ...


March 29, 2015, 11:33 pm, 1447350

1. Another Week, Another Couple of Drug War Deaths: Body Count Up to 15 for 2015.

2. Killed by Police: At least 281 people have been killed by U.S. police since January 1, 2015, that’s more than three every day.

3. Another Day, Another Cop Shoots Another Family Dog.


March 29, 2015, 10:45 pm, 1447342

The Soviets matched the US only by spending up to 20% of GDP on the military during the Cold War. This column argues that, in stark contrast to this example, China has the potential to match the US in certain military spheres with similar burden on its economy. Using exchange ...


March 29, 2015, 10:04 pm, 1447341
(March 30, 2015 12:08 AM, by Bryan Caplan) I'm sick of academic seminars. Even if the presenter has a good paper and speaks well, the audience ruins things. How? Two minutes into any talk, the fruitless interruptions begin. Half the time, they're premature quality control: "Are you going... (2 COMMENTS)


March 29, 2015, 10:04 pm, 1447340
Noam Scheiber has a hard hitting article on the front page of www.nytimes.com “2016 Candidates and Wealthy Are Aligned on Inequality” The content should be familiar to AngryBear readers. A majority of Americans are alarmed by high and increasing inequality and support government action to reduce inequality. However, none of ...


March 29, 2015, 9:33 pm, 1447339

Proud of her federal agency’s role in eliminating due process at US colleges and engaging in lots of other forms of bureaucratic mischief, Department of Education bureaucrat Jane writes in the Washington Post that she wants to put an end to insensitive bumper stickers that are micro-aggressions, if not ...


March 29, 2015, 9:03 pm, 1447336

Rajiv Sethi:

A Separating Equilibrium in Indiana: In the wake of Indiana's passage of the Religious Freedom and Restoration Act, the following stickers have started appearing on storefronts across the state:


March 29, 2015, 9:03 pm, 1447335
From the NY Times: A Deadline for Greece, and U.S. Jobs Data

Greece hopes to gain approval on Monday for a detailed list of economic changes that its international creditors have demanded ...

... recent economic data has been anemic, and it is likely that hiring has ...


March 29, 2015, 7:03 pm, 1447328
CR Note: The NAR is scheduled to release Pending Home Sales for February tomorrow at 10:00 AM ET. The consensus is for a 0.3% increase in the index. Housing economist Tom Lawler mentioned in his existing home sales forecast a week ago:

While not enough local realtors/MLS ...


March 29, 2015, 6:04 pm, 1447325
(Don Boudreaux)

I just went to the supermarket to buy a steak.  In the parking lot I spotted – literally – a $20 bill lying on the ground.  I picked it up.  No one else was nearby who appeared to be a likely true owner, so I also pocketed this ...


March 29, 2015, 5:33 pm, 1447323
Instead of new rules making sure two people are in the cockpit at all times, how about a rule that says no one is cockpit? This is precisely how I felt after 911 and even more so after the disappearance of Malaysia Flight 370 on March 8.


March 29, 2015, 4:44 pm, 1447294
A


March 29, 2015, 4:05 pm, 1447293

1. It is believed that MIT graduating Ph.d. students are more likely to stay in academia than those from any other school or field.

2. Across 1977-2011, MIT economists made up 34 percent of the members of the CEA, and Robert Solow supervised one-third of that group.

3. Even in the early ...


March 29, 2015, 3:34 pm, 1447291

Well, the Council of Ontario Universities or COU is looking for a new President and CEO. The role of COU is to serve as a voice for the province’s university sector and help improve the public policies that affect the sector. As the ad for the ...


March 29, 2015, 2:34 pm, 1447276
In the wake of Indiana's passage of the Religious Freedom and Restoration Act, the following stickers have started appearing on storefronts across the state:


March 29, 2015, 2:05 pm, 1447275

March 29, 2015, 2:04 pm, 1447274
(Don Boudreaux)

Here’s a letter to a sympathetic correspondent, whose name I use with his kind permission:

Mr. Glenn Temple

Dear Mr. Temple

Thanks for the link to Ken Blackwell’s Daily Caller essay on immigration.

You correctly guess that I reject his argument.  Blackwell supplies no evidence that “the nation as a whole ...


March 29, 2015, 2:04 pm, 1447273
“Two Cheers for Corruption” and Bill Black’s Response Plunder has become a way of life for many elite Corporate CEOs, Bill Black argues in response to Deirdre McCloskey supposition: “But corruption can be efficient and just, too. It can be good for efficiency if, say, bribes are paid to get ...


March 29, 2015, 1:33 pm, 1447272


March 29, 2015, 1:03 pm, 1447259
Here are some excepts from two research reports ... first from Merrill Lynch:

The recent employment reports have been exceptionally strong with job growth averaging 293,000 a month for the past six months. Although we expect a slight moderation in March with job growth of 270,000, this would still ...


March 29, 2015, 12:04 pm, 1447256
(Don Boudreaux)

This Wall Street Journal report on elections in Nigeria features this photo of voters holding their “new electoral cards.”  This photo reminds me of the many photos of Iraqis who have voted displaying their purple ...


March 29, 2015, 11:03 am, 1447236

On Friday I visited the University of Alberta in Edmonton, where falling oil prices have brought a record provincial budget deficit despite aggressive tax increases and spending cuts. Here I pass along some of what I learned about how the plunge in oil prices is affecting Alberta’s oil ...


March 29, 2015, 10:35 am, 1447235
US personal consumption spending for February is projected to rise 0.3% vs. the previous month in tomorrow’s update (Mar. 30), based on The Capital Spectator’s median point forecast for several econometric estimates. The prediction reflects a moderate rebound after January’s 0.2% decline. Three estimates based on recent surveys of economists ...


March 29, 2015, 9:33 am, 1447231
A friend points me to this article in The Economistabout the economics of skyscrapers. Lots of good food for thought for micro and macro classes.


March 29, 2015, 9:33 am, 1447230
I am a 1987 graduate of the LSE. In less than two months, I return to the LSE to see my friends there and to give several lectures. One will be a public lecture where I discuss the big themes of my China research. Most of this research is ...


March 29, 2015, 8:35 am, 1447205

Tyler Cowen argues against (pdf) Elizabeth Anderson's view (pdf) that capitalist bosses exert oppressive power over workers and, implicitly, against my view that capitalist work is alienating. This, I suspect , is one of the many issues in the social sciences where ...


March 29, 2015, 8:05 am, 1447204

The problem is that Mr. Tsipras has not convinced his creditors that he is serious about reform or that his team is remotely on top of the detail. He needs a game-changer. This should, indeed, be a rupture — but with his left faction, not his creditors.

That is


March 29, 2015, 8:04 am, 1447203
(Don Boudreaux)

… is from page 5 of Burt and Anita Folsom’s 2014 volume, Uncle Sam Can’t Count; here they are discussing Uncle Sam’s early-19th-century infrastructure project popularly known as “the National Road - a 620-mile- (1,000km-) long road extending westward from Cumberland, Maryland to Vandalia, Illinois (footnotes excluded):

Because the ...


March 29, 2015, 7:33 am, 1447201

March 29, 2015, 6:04 am, 1447170
My regular column is available to subscribers on www.thesundaytimes.co.uk This is an excerpt. A big fat zero. No inflation at all. Though it is not guaranteed, a run of deflation – prices lower than a year earlier – seems...


March 29, 2015, 5:33 am, 1447169

"So you have this current generation of young executives, andthey're not particularly interested in walking around slowly."


March 29, 2015, 5:24 am, 1447168

Photo Credit: Tulane Public Relations || James Carville wants to be “reincarnated” as the bond market, to scare everyone ...


March 29, 2015, 5:03 am, 1447123

March 29, 2015, 4:04 am, 1447122
FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND AND FEDERAL DISABILITY INSURANCE TRUST FUND (c) With respect to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (hereinafter in this title called the “Trust Funds”) there is hereby created a body to be known as ...


March 29, 2015, 2:05 am, 1447094

Paul Krugman has had a few posts on this question, most recently this one, the first one here.  Krugman is right in asserting a major role for air conditioning, but there is a subtle framing point which is sometimes neglected.  The most on-point study is


March 29, 2015, 1:23 am, 1447093
Paul Krugman says yes and yes:

The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out ...