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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January 27, 2015, 2:44 pm, 1410855
A


January 27, 2015, 2:34 pm, 1410854
Teaser:

A ...


January 27, 2015, 2:05 pm, 1410853

January 27, 2015, 2:05 pm, 1410852

American Sniper is one of the best anti-war movies I have seen, ever.  But it shows the sniper-assassin, and his killing, to be sexy, and to be regarded as sexy by women, while the rest of war is dull and stupid.  (Even the two enemy snipers are quite attractive and ...


January 27, 2015, 2:04 pm, 1410851
(January 27, 2015 03:32 PM, by David Henderson) Against Collectivism In the last year I have made our sister legal blog, Library of Law and Liberty, part of my newsfeed. I read most of their posts and learn from many of them. Today, blogger and George Mason University... (0 COMMENTS)


January 27, 2015, 1:33 pm, 1410848
The last two weeks have been full of monetary news with the Swiss Franc peg, and the ECB's announcement of Quantitative Easing (QE). A few thoughts.

As you have ...


January 27, 2015, 1:33 pm, 1410847
The casualties continue to pile up in the wake of the the Swiss National Bank dropping its peg to the euro.

(See Rabbit Hole Intervention Fails: Wild Moves in Swiss Franc as Switzerland Abandons Euro Peg; Morals of the Story).

The first moral of the ...


January 27, 2015, 1:33 pm, 1410846
Why did employment growby about 3 millionin 2014? Here is the answer from a new paper:

We measure the effect of unemployment benefit duration on employment. We exploit the variation induced by the decision of Congress in December 2013 not to reauthorize the ...


January 27, 2015, 1:03 pm, 1410785
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 27, 2015, 1:03 pm, 1410784
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 27, 2015, 1:03 pm, 1410783
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 27, 2015, 1:03 pm, 1410782
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 27, 2015, 1:03 pm, 1410781
A


January 27, 2015, 1:03 pm, 1410780
Earlier: New Home Sales at 481,000 Annual Rate in December, Highest December since 2007

The new home sales for December were at 481 thousand on a seasonally adjusted annual rate basis (SAAR). This was the highest level of sales in over 6 years (best December since 2007).


January 27, 2015, 12:44 pm, 1410779
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January 27, 2015, 12:44 pm, 1410778
A


January 27, 2015, 12:44 pm, 1410777
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January 27, 2015, 12:04 pm, 1410773
(January 27, 2015 10:44 AM, by Scott Sumner) Back in 2000, Robin Hanson wrote a paper entitled "Shall We Vote on Values, But Bet on Beliefs?", which offered a way forward for economics in the 21st century. Unfortunately his ideas were ignored (and even ridiculed) and today we... (1 COMMENTS)


January 27, 2015, 12:04 pm, 1410772
(Don Boudreaux)

One of the most frequently heard arguments in support of the so-called “war on drugs” is that a society whose government doesn’t actively discourage the use of many or most intoxicating and debilitating substances will inevitably become coarse (perhaps even downright uncivilized) and filled with all manner of ...


January 27, 2015, 12:04 pm, 1410771

Net neutrality sounds good, but it means different things to different people, making it easy for special interests to manipulate it for narrow political ends.

One definition of net neutrality is a user’s freedom to connect to any Internet content, application or service. This is uncontroversial, and Internet providers already agree ...


January 27, 2015, 12:04 pm, 1410770

The new CBO budget projection predicts annual deficits will continue to shrink the next few years before rising again in 2018, from 2.5%  of GDP in 2017 to 4.0% in 2025. Two reasons: Higher entitlement spending (from 13.0% of GDP in 2017 to 14.2% ...


January 27, 2015, 12:04 pm, 1410769

Barely a year ago, most foreign policy pundits would likely have agreed on one simple prediction: the election of Narendra Modi as Indian prime minister would set back relations with the United States, and by extension with the West more broadly.

Instead, the opposite has happened. Yesterday President Barack Obama shattered ...


January 27, 2015, 11:03 am, 1410701

The Congressional Budget Office predicts the government’s deficits will shrink in 2015 and again in 2016. As a share of the economy, it will fall to 2.5% and remain there through 2017 before beginning to rise again with the aging of the population.

These small deficits may seem surprising given ...


January 27, 2015, 11:03 am, 1410700
Allan Landon, Bank of Hawaii CEO, has been nominated for an open seat on the Federal Reserve’s Board Associated Press

Allan Landon, President Barack Obama‘s nominee ...


January 27, 2015, 11:03 am, 1410703
With a blizzard on the way, New York City is shrouded in a light snow on Monday. New York, and much of the Northeast, is bracing for a major ...


January 27, 2015, 11:03 am, 1410702
Crews work on D.R. Horton Inc. homes near Dallas on Monday. Kris Hudson/The Wall Street Journal

D.R. Horton Inc.’s latest quarterly results are the strongest signal yet ...


January 27, 2015, 11:03 am, 1410697
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 27, 2015, 11:03 am, 1410699

The Wall Street Journal’s Daily Report on Global Central Banks for Tuesday, January 27, 2015
Sign up for the newsletter: http://on.wsj.com/grandcentralsignup

Highlights


Hilsenrath’s Take: Bad Weather Could Complicate an Already Tough Fed Decision in March


January 27, 2015, 11:03 am, 1410695
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 27, 2015, 11:03 am, 1410696
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 27, 2015, 11:03 am, 1410698
Occupy Wall Street protestors in 2011 focused on New York City. State-level tax data shows the gap between the wealthiest 1% and everyone else was widening in all 50 ...


January 27, 2015, 11:03 am, 1410694

I have a new column:

Taxing the Wealthy Won't Hurt Economic Growth: I have no idea whether or not Mitt Romney will run for president, and if he does, if he will get the nomination. But many of the issues he ran on when he was a candidate in ...


January 27, 2015, 11:03 am, 1410693
S&P/Case-Shiller released the monthly Home Price Indices for November ("November" is a 3 month average of September, October and November prices).

This release includes prices for 20 individual cities, two composite indices (for 10 cities and 20 cities) and the monthly National index.

Note: Case-Shiller reports Not ...


January 27, 2015, 11:03 am, 1410692
The Census Bureau reports New Home Sales in December were at a seasonally adjusted annual rate (SAAR) of 481 thousand.

October sales were revised up from 445 thousand to462 thousand, and November sales were revised down from 438 thousand to 431 thousand.

"Sales of new single-family houses ...


January 27, 2015, 10:44 am, 1410691

With the large Syriza victory in Greece, thoughts turn to forthcoming debt restructuring talks. This column argues that Greece is unlikely to get a large restructuring. Using a Rubinstein bargain approach to generate a back-of-the-envelope estimate, Greece would get some breathing room but not much. Rather than running a structural ...


January 27, 2015, 10:44 am, 1410690
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January 27, 2015, 10:34 am, 1410689

I try not to watch politics programmes on TV. Andrew Neil's interview with Natalie Bennett about a basic income reminds me why.

I'm appalled by Natalie's inability to answer his first question: how to pay for it? The Citizens Income Trust has set out


January 27, 2015, 10:04 am, 1410681

The education policy world is buzzing. Universal pre-k for all 4 year olds. Free community college to anyone who wants to attend. Major changes to the No Child Left Behind Act. National School Choice Week.

Attention is warranted: education is a key to economic mobility in America. An additional year of ...


January 27, 2015, 9:33 am, 1410678

NYC Mayor:

“The furious hoarfrost bearing down upon us knows neither mercy nor reason, and all within the five boroughs will perish, cowering in their brittle dwellings ... This shall be a tempest the likes of which has never been glimpsed by man or beast. Clutch your babes close to your ...


January 27, 2015, 9:33 am, 1410677

Sad:

Barbie and other traditional toys are having a much tougher time supporting their elderly parent Mattel, a toymaker significantly weakened by stiff competition from small upstarts and by digital distractions aimed at children.

On Monday, the ...


January 27, 2015, 9:33 am, 1410676

January 27, 2015, 9:03 am, 1410614

The Wall Street Journal’s Daily Report on Global Central Banks for Tuesday, January 27, 2015
Sign up for the newsletter: http://on.wsj.com/grandcentralsignup

Highlights


Hilsenrath’s Take: Bad Weather Could Complicate an Already Tough Fed Decision in March


January 27, 2015, 9:03 am, 1410613
Occupy Wall Street protestors in 2011 focused on New York City. State-level tax data shows the gap between the wealthiest 1% and everyone else was widening in all 50 ...


January 27, 2015, 8:44 am, 1410612
A


January 27, 2015, 8:44 am, 1410610
A


January 27, 2015, 8:44 am, 1410611
A


January 27, 2015, 8:44 am, 1410609

Can a company really melt? Putting aside a business with a perishable product or inventory, does management really wake up one ...


January 27, 2015, 8:35 am, 1410608
Estimates of US GDP growth for 2014’s fourth quarter have been rising in recent months, but the current outlook still anticipates a substantial slowdown from Q3’s strong advance. The economy is projected to increase 3.6% in Q4 (real seasonally adjusted rate), based on The Capital Spectator’s new median point forecast ...


January 27, 2015, 8:05 am, 1410605

In my EconTalk with Russ Roberts on proprietary cities I only mentioned company towns in passing. Even the great Milton Friedman got company towns wrong, however, so it’s worthwhile spending a little time to dispel some myths.

Take company stores. Why did mining companies often own the town store? The standard answer: to squeeze every ...


January 27, 2015, 8:04 am, 1410604
(Don Boudreaux)

… is from page 171 of David Henderson’s excellent 2002 book, The Joy of Freedom:

Markets teach or encourage at least three virtues: tolerance, honesty, and compassion.


January 27, 2015, 7:33 am, 1410602

Make your plans now:

It goes right through the middle of the country too . . . almost everyone in the lower 48 is within a day's drive of seeing it. Cities in the path of the totality include Salem, OR, Jackson, WY, Lincoln, NE, St. Louis, ...


January 27, 2015, 7:33 am, 1410598

The long run--fingers crossed--could be very, very good.


January 27, 2015, 7:33 am, 1410601

January 27, 2015, 7:33 am, 1410600

Interesting look at recent work by prominent historians on the role of climate in history.

For the most part, these five senior historians use climate change to discuss economic and political history. Unexpected climate shifts, or brief climate shocks, brought crop failure, hunger, unrest—these arguments appear time ...


January 27, 2015, 7:33 am, 1410599

Seems like a useful set of recommendations.


January 27, 2015, 6:44 am, 1410537
Stark partisan differences in the importance attached to making further deficit reductions, combined with the new deficit estimates, could spell more tension in the annual spending debate in Washington.


January 27, 2015, 6:34 am, 1410536
● Doubts grow about mid-year rate hike, but Fed won’t express any | MarketWatch ● U.K. GDP Growth Moderates In Q4 | RTT ● Greece debt repayment in full is ‘unrealistic’, says Syriza | BBC ● Market reaction muted after S&P drops Russia to ‘junk’ | Reuters ● China 2014 ...


January 27, 2015, 5:03 am, 1410492

From our perspective, the most important and useful part of the Efficient Markets Hypothesis (EMH) is its assumption that asset prices change quickly to reflect the impact of new information upon the future expectations of investors.

So what does the ability of investors to ...


January 27, 2015, 5:03 am, 1410490

Daniel Little:


Figure: Althusser's conception of the CMP (RP Resch, Althusser and the Renewal of Marxist Social Theory)

The mode of production as society's structure: Sociologists study social structureand the effects that structures ...


January 27, 2015, 5:03 am, 1410491

January 27, 2015, 4:44 am, 1410489
A


January 27, 2015, 2:44 am, 1410446
David Wessel: CBO is growing steadily gloomier about the U.S. economy's capacity to grow. If CBO is right, that means it would be harder to bring down the historically high ratio of government debt to GDP and that living standards in the U.S. will improve more slowly.


January 27, 2015, 2:05 am, 1410445

Table 1 shows that adding estimates from the literature suggests that economists have already explained 177% of the rise in average BMI.

That is from this new NBER paper, by Courtemanche, Pinkston, Ruhm, and Wehby, which seems to be one of the most careful studies to date.  They do ...


January 27, 2015, 2:04 am, 1410444
Event Description

International trade and the US economy are top issues in the 114th Congress. We welcome you to join us at AEI as Senate Finance Committee Chairman Orrin Hatch (R-UT) outlines his vision for how America can succeed in today’s global economy. Sen. Hatch will speak to his longstanding efforts ...


January 27, 2015, 1:03 am, 1410396

The Congressional Budget Office predicts the government’s deficits will shrink in 2015 and again in 2016. As a share of the economy, it will fall to 2.5% and remain there through 2017 before beginning to rise again with the aging of the population.

These small deficits may seem surprising given ...


January 27, 2015, 1:03 am, 1410397
Crews work on D.R. Horton Inc. homes near Dallas on Monday. Kris Hudson/The Wall Street Journal

D.R. Horton Inc.’s latest quarterly results are the strongest signal yet ...


January 27, 2015, 1:03 am, 1410395

Allan Landon, President Barack Obama‘s nominee for an open seat on the Federal Reserve’s Board, has personal assets worth between $9.7 million and $41 million, according to financial disclosure forms filed with the U.S. Office of Government Ethics.

Mr. Landon, a partner in Community BanCapital, a private investment ...


January 27, 2015, 12:04 am, 1410392
(January 27, 2015 12:32 AM, by Bryan Caplan) When you're a normal member of your society, the appeal of collectivism is easy to understand. Most people believe what you believe and enjoy what you enjoy. So wouldn't it be great if society as a whole continuously celebrated your... (0 COMMENTS)


January 26, 2015, 11:33 pm, 1410389
Don't worry taxi drivers, this is only a test: Self-driving cars to hit German Autobahn.

A section of the A9 Autobahn in Bavaria will be converted into a test route for self-driving cars, Transport Minister Alexander Dobrindt said on Monday.

"We will set up a test ...


January 26, 2015, 11:23 pm, 1410388

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 26, 2015, 10:44 pm, 1410359
A


January 26, 2015, 10:34 pm, 1410358
Teaser:

As ...


January 26, 2015, 10:04 pm, 1410356
CBO Budget and Economic Outlook: 2015 to 2025 Document link for Robert’s post. Lots of numbers here, including a new Jan 2015 Baseline for Social Security Just started poking at the numbers but it seems that CBO has revised projected revenue for SocSec down going forward. Not by a lot ...


January 26, 2015, 10:04 pm, 1410355

Do they talk this way about Iranian President Hassan Rouhani?

After learning that Israeli Prime Minister Benjamin Netanyahu had accepted an invitation to address a joint session of Congress about the need for new sanctions to stop ...


January 26, 2015, 10:04 pm, 1410354

Key Points

Studies indicate that low-income parents participating in the District of Columbia’s private-school choice program prioritize—at least initially—the safety of schools over schools’ academic quality as they transition from public schools. Furthermore, when evaluating their child’s academic progress, parents do not view standardized test scores as a key metric of ...


January 26, 2015, 10:04 pm, 1410353

In his 1944 book “Bureaucracy,” legendary economist Ludwig Von Mises explained the important and supreme role of the ruthless consumer in the market economy (emphasis added):

The real bosses, in the capitalist system of market economy, ...


January 26, 2015, 9:33 pm, 1410352
Here's a new map of major military operations in Ukraine.

I say "new" but the caption indicates it is a day old. An estimated 7,000 to 8,000 Ukrainian troops are about to be encircled.

Major Military Operations - January 25


January 26, 2015, 9:33 pm, 1410351

In his 1944 book “Bureaucracy,” legendary economist Ludwig Von Mises explained the important and supreme role of the ruthless consumer in the market economy (emphasis added):

The real bosses, in the capitalist system of market economy, are the consumers. They, by their buying and by their abstention from buying, ...


January 26, 2015, 9:03 pm, 1410328
I was looking at the outer Los Angeles and Long Beach harbor today, and I realized I've never seen so many loaded freighters queued up to unload at the port. The West Coast port slowdown is getting serious.

The Long Beach Press Telegram had an editorial today:


January 26, 2015, 8:44 pm, 1410327
David Wessel: CBO is growing steadily gloomier about the U.S. economy's capacity to grow. If CBO is right, that means it would be harder to bring down the historically high ratio of government debt to GDP and that living standards in the U.S. will improve more slowly.


January 26, 2015, 8:44 pm, 1410326
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January 26, 2015, 8:44 pm, 1410325

THIS week: The implications of the Greek election and Davos deconstructed


January 26, 2015, 8:04 pm, 1410322
(January 26, 2015 07:52 PM, by David Henderson) A lesson I learned early in life On Facebook yesterday, an economist friend wrote that, in criticizing work by Thomas Piketty, he was claiming that Piketty is arrogant. He asked me (and others) if I thought that it was a... (1 COMMENTS)


January 26, 2015, 8:04 pm, 1410321


January 26, 2015, 8:04 pm, 1410320
The CBO lowered its forecast of the cost of the Affordable Care Act by 20% Here is the CBO report (pdf warning) I clip and past a dramatic graph They also estimate that it has caused 12 million more people to have insurance. This is the net increase subtracting cancelled ...


January 26, 2015, 7:33 pm, 1410319

Here's a question for you: Suppose there is a permanent increase in monopoly power across the economy (either firms having more monopoly power in output markets, or unions having more monopoly power in labour markets). Would that permanent increase in monopoly power cause a permanent increase in the inflation rate?

Most ...


January 26, 2015, 7:23 pm, 1410318
Free market economists are major critics of government intervention in markets. Only if it is fundamentally necessary should governments step in ( if there aresubstantial third party costs and if the free market is failing to allocate public goods are good examples) and even then, the use of effluent charges ...


January 26, 2015, 7:03 pm, 1410276

Allan Landon, President Barack Obama‘s nominee for an open seat on the Federal Reserve’s Board, has personal assets worth between $9.7 million and $41 million, according to financial disclosure forms filed with the U.S. Office of Government Ethics.

Mr. Landon, a partner in Community BanCapital, a private investment ...


January 26, 2015, 7:03 pm, 1410275

Nick Rowe:

Does monopoly power cause inflation? (1968 and all that): Here's a question for you: Suppose there is a permanent increase in monopoly power across the economy (either firms having more monopoly power in output markets, or unions having more monopoly power in labour markets). Would that permanent ...


January 26, 2015, 7:03 pm, 1410274
Economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for a few selected cities in December.

On distressed: Total "distressed" share is down in almost all of these markets, mostly due to a decline in short sales.

Short sales are ...


January 26, 2015, 6:44 pm, 1410273
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January 26, 2015, 6:34 pm, 1410272

The head of Blackberry thinks he’s found the solution to his company’s problems, get the government to force companies to make apps for Blackberry phones:

At this point, BlackBerry and Windows Phone fans are probably used to ...


January 26, 2015, 6:34 pm, 1410271
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January 26, 2015, 6:04 pm, 1410267

POLITICO reported Monday that House Democratic Minority Leader Nancy Pelosi faces “unrest” within her party’s ranks as House Democrats head to Philadelphia for their policy retreat this week. House Democrats may be making known their opinion of Pelosi, but the rest of the ...


January 26, 2015, 6:04 pm, 1410268

The Congressional Budget Office just released its 10-year budget and economic forecast. Let me boil it down for you: These are the good times. Enjoy them because things are unlikely to get much better. In fact, they are likely to get ...


January 26, 2015, 6:04 pm, 1410266

In a new NBER working paper, Marcus Hagedorn of the University of the University of Oslo, Iourii Manovskii of Stockholm University and Kurt Mitman of the University of Pennsylvania – Tea Party extremists to a man, I am sure – conclude that ...


January 26, 2015, 5:23 pm, 1410263
Here is a great idea!CluedUp is a new solution for students really keen to improve their contextual knowledge in ASeconomicsTo subscribe to the daily email click here http://eepurl.com/bccNXrCheck out the blog: www.cluedup2015.wordpress.comI'll be following Clued Up carefully in the coming weeks.


January 26, 2015, 5:03 pm, 1410201

The Congressional Budget Office (CBO) has released its 2015 to 2025 Budget and Economic Outlook. In this yearly publication, the CBO examines current laws (taxes and spending) and projects the outlook for the federal government’s budget for the next 10 years.

One of the topline projections the CBO makes ...


January 26, 2015, 5:03 pm, 1410200

MONDAY

Bank of Israel releases a policy statement

TUESDAY

National Bank of Hungary releases a policy statement Federal Reserve begins a two-day policy meeting in Washington

WEDNESDAY

Central Bank of Malaysia releases a policy statement Bank of Thailand releases a policy statement BOE’s Carney speaks in Dublin at 1850 GMT Federal Reserve releases a policy statement at 2 p.m. ...


January 26, 2015, 5:03 pm, 1410196

The Congressional Budget Office predicts the government’s deficits will shrink in 2015 and again in 2016. As a share of the economy, it will fall to 2.5% and remain there through 2017 before beginning to rise again with the aging of the population.

These small deficits may seem surprising given ...


January 26, 2015, 5:03 pm, 1410199

Last year, the federal government’s deficit was the smallest since 2007. Doesn’t $3 trillion in revenue and $3.5 trillion in spending represent a government that’s out of control? Isn’t the deficit only okay because the Federal Reserve has pinned interest rates so low? What will happen when rates go back to ...


January 26, 2015, 5:03 pm, 1410198
With a blizzard on the way, New York City is shrouded in a light snow on Monday. New York, and much of the Northeast, is bracing for a major ...


January 26, 2015, 5:03 pm, 1410197
Crews work on D.R. Horton Inc. homes near Dallas on Monday. Kris Hudson/The Wall Street Journal

D.R. Horton Inc.’s latest quarterly results are the strongest signal yet ...


January 26, 2015, 4:44 pm, 1410195
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January 26, 2015, 4:44 pm, 1410193
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January 26, 2015, 4:44 pm, 1410194
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January 26, 2015, 4:05 pm, 1410188

“How can the Spanish or Italian prime minister tell voters that Greece has a lower interest burden than we have, but we still need to give them debt forgiveness?” said Mr Darvas.

That is from Ferdinando Giugliano at the FT, who is referring to the possibility that the Greek ...


January 26, 2015, 4:04 pm, 1410187
(Don Boudreaux)

Kevin Williamson reflects on the meeting of like-minds at Davos.  (HT Lyle Albaugh)  A slice:

Progressives say that they want inclusive social decision-making, but the most radically inclusive process we have for social decision-making is the thing that they generally distrust and often hate: capitalism — or, as ...


January 26, 2015, 4:04 pm, 1410186

When the next big economic disaster hits, Washington will almost certainly choose to do something: cut taxes, increase spending, lower interest rates. There is another option, of course: do nothing. No fiscal or monetary stimulus. Let the fire burn the rot of excess from the system. From the ashes, goes ...


January 26, 2015, 4:04 pm, 1410185

School choice is a promising tool for education reform, allowing families to determine which school is best for their child and their child’s individual needs. To kick off National School Choice Week, here is a preview of AEI work on the issue, as well as an upcoming event:


January 26, 2015, 4:04 pm, 1410184

The modern Democratic message seems to be that all those economic gains in the 1980s and 1990s that (easily) led to two-terms each for Ronald Reagan and Bill Clinton were illusory. Didn’t happen, at least not for middle-class America.


January 26, 2015, 4:04 pm, 1410183

Americans, we are so easy. A drop in gasoline prices and the folks in Washington start looking better and better. Particularly the president. Gasoline prices are down by a buck since last summer as global oil prices have collapsed. Also since last summer, President Obama’s approval ratings have surged.


January 26, 2015, 3:33 pm, 1410179
When black markets in currencies develop, you can be 100% sure the official exchange rate is overinflated.

In Venezuela, the fixed rate of exchange is 6.3 bolivars to the dollar, the floating rate of exchange is 50 bolivars to the dollar, and the black market rate is 184 ...


January 26, 2015, 3:33 pm, 1410178
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January 26, 2015, 3:03 pm, 1410117

Cut the individual income tax and raise the gas tax—that was South Carolina Governor Nikki Haley’s message in her 2015 State of the State address.

Though there aren’t a lot of details yet, it’s no surprise that South Carolina’s income tax rate is a competitive disadvantage for the state. ...


January 26, 2015, 3:03 pm, 1410116
Bloomberg News

European Central Bank President Mario Draghi’s news conference marked a move into uncharted territory for the central bank, announcing the launch of a large-scale program of government bond purchases known as quantitative easing. It marks a ...


January 26, 2015, 3:03 pm, 1410115

Finance and insurance, natural resources and real estate industries were the biggest drivers of the third quarter’s strong economic growth, the Commerce Department said Thursday.

The industries accounted for just over half of ...


January 26, 2015, 3:03 pm, 1410114

Commercial real estate analysts were projecting that 2015 would be a strong year even before Thursday’s quantitative easing announcement by the European Central Bank.

Now it’s looking even better, according to David Hutchings, ...


January 26, 2015, 3:03 pm, 1410113
The European Central Bank announced its large-scale bond-buying program on Thursday, but who will the ECB be purchasing those bonds from? Agence France-Presse/Getty Images

The European Central ...


January 26, 2015, 3:03 pm, 1410108
“Surprise monetary contractions tended to expand shadow bank asset growth, rather than reduce it,” says new research from the Bank of England. European Pressphoto Agency

Raising interest rates ...


January 26, 2015, 3:03 pm, 1410107
A Bentley Continental automobile travels along the production line at the Bentley Motors Ltd. workshop in Crewe, U.K., on Wednesday, Jan. 14, 2015. Bentley said potential customers are already ...


January 26, 2015, 3:03 pm, 1410109
Trulia’s chief economist, Jed Kolko, says “old patterns have returned” and “suburbs are now gaining population faster than urban neighborhoods.” Dying suburbs aren’t the only migration myth.


January 26, 2015, 3:03 pm, 1410111

Mario Draghi: Meet Tom Brady, who has some experience with a brutal environment in which longstanding rules are sometimes broken.

Tom Brady: Meet Mario Draghi, who knows inflation is the most prudent goal these days.

Credit the CNN chyron for bringing the ECB and NFL together at last:


January 26, 2015, 3:03 pm, 1410106
Mounting student debt, higher rents and tight credit conditions continue to make it tough for first-time borrowers to save enough money for a down payment and qualify for a ...


January 26, 2015, 3:03 pm, 1410112
Pushing the euro lower against other major currencies could help exporters and increase output, while it could also help raise inflation by making imported goods and services more expensive ...


January 26, 2015, 3:03 pm, 1410110

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, January 23, 2015:

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


Highlights

Hilsenrath’s Take: On Day One of ECB QE, Draghi Gets Much of What He ...


January 26, 2015, 3:03 pm, 1410100

MONDAY

Bank of Israel releases a policy statement

TUESDAY

National Bank of Hungary releases a policy statement Federal Reserve begins a two-day policy meeting in Washington

WEDNESDAY

Central Bank of Malaysia releases a policy statement Bank of Thailand releases a policy statement BOE’s Carney speaks in Dublin at 1850 GMT Federal Reserve releases a policy statement at 2 p.m. ...


January 26, 2015, 3:03 pm, 1410098

Last year, the federal government’s deficit was the smallest since 2007. Doesn’t $3 trillion in revenue and $3.5 trillion in spending represent a government that’s out of control? Isn’t the deficit only okay because the Federal Reserve has pinned interest rates so low? What will happen when rates go back to ...


January 26, 2015, 3:03 pm, 1410105
A harsh winter brought record snow fall in early 2014, burying New York City cars for weeks. Getty Images

When the U.S. economy unexpectedly contracted in the ...


January 26, 2015, 3:03 pm, 1410101
Reuters

Top Federal Reserve officials have been relatively quiet ahead of their policy meeting Tuesday and Wednesday. Since their meeting last month, Chairwoman Janet Yellen and the four other ...


January 26, 2015, 3:03 pm, 1410099

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, January 26, 2015:

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


Highlights

Derby’s Take: Fed Board Quiet In Run Up To Meeting Fedspeak Cheatsheet: What Are ...


January 26, 2015, 3:03 pm, 1410104
The first Federal Reserve policy meeting of 2015 headlines a busy roster of economic events, including the first look at fourth-quarter growth. Here are five things to watch.


January 26, 2015, 3:03 pm, 1410103

Dutch central bank president Klaas Knot said Sunday he didn’t support the European Central Bank’s new bond-buying program.

Mr. Knot, who sits on the ECB’s Governing Council, said in an interview on Dutch television that he wasn’t convinced of the “necessity and effectiveness” of the program, known as quantative easing.
“Even ...


January 26, 2015, 3:03 pm, 1410102

 

While most business economists expect their industries to benefit from low oil prices, others will lose out as as oil and gas firms scale back investment and development.


January 26, 2015, 3:03 pm, 1410097
With a blizzard on the way, New York City is shrouded in a light snow on Monday. New York, and much of the Northeast, is bracing for a major ...


January 26, 2015, 3:03 pm, 1410096

Dietz Vollrath:

Techno-neutrality: I’ve had a few posts in the past few months (here and here) about the consequences of mechanization for the future of work. In short, what will we do when the robots take our jobs?

I wouldn’t call myself a techno-optimist. I don’t think ...


January 26, 2015, 3:03 pm, 1410095
From housing economist Tom Lawler:

D.R. Horton, the nation’s largest home builder, reported that net home orders in the quarter ended December 31, 2014 totaled 7,370, up 35.1% from the comparable quarter of 2013. Net orders per active community were up about 27% YOY. Horton’s average net ...


January 26, 2015, 2:44 pm, 1410094
A


January 26, 2015, 2:44 pm, 1410093
A


January 26, 2015, 2:44 pm, 1410092

I'm totally with this guyHershey's move to keep British Cadbury's products out of the US is un-American. Anyone who has tasted the British version of Cadbury's knows that it's a far superior product.

But what's the bankruptcy ...


January 26, 2015, 2:05 pm, 1410089

January 26, 2015, 2:04 pm, 1410088
I’m a chocoholic.  Can’t eat it as much as I used to.  So, this bit of news by way of C & L caught my eye.  I’ll let the article speak for it’s self. As a result of a settlement with the Hershey’s Company, Let’s Buy British Imports, or L.B.B., ...


January 26, 2015, 2:04 pm, 1410086

A number of correspondents, and Jonathan Adler and Charles Cooke online, question the constitutional justification for federal abortion legislation, including a ban on most late-term abortions. (See NR’s


January 26, 2015, 2:04 pm, 1410087

President Obama took flack from me and others last week for floating a middle-class tax plan that left families with a stay-at-home parent out of the picture. His plan—which would offer dual-earner families with an income of less ...


January 26, 2015, 1:33 pm, 1410080


January 26, 2015, 1:33 pm, 1410079
Mario Draghi has strong opposition to his QE program from two sources: German central bank president Jens Weidmann and Dutch central Bank president Klaas Knot.

In a television interview on Sunday, Dutch Central Bank Head Says He Doesn’t Support ECB Bond Purchases.

Mr. Knot, who ...


January 26, 2015, 1:03 pm, 1410018

"The problem with Syriza’s plans may be that they’re not radical enough":

Ending Greece’s Nightmare, by Paul Krugman, Commentary, NY Times: Alexis Tsipras, leader of the left-wing Syriza coalition, is about to become prime minister of Greece. He will be the first European leader elected on an explicit promise ...


January 26, 2015, 1:03 pm, 1410017
The automakers will report January vehicle sales on February 3rd. Sales in December were at 16.8 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in January will be lower - but will probably be the best January in eight years.

Note: There were ...


January 26, 2015, 12:44 pm, 1410016

There has been spectacular growth in cross-border financial linkages over the last 20 years.  Moreover, boom-bust cycles in international financial flows have contributed to financial instability and financial crises in a number of countries. While the coverage of international financial datasets has sharply improved in recent years, this column explains ...


January 26, 2015, 12:44 pm, 1410015

There has been spectacular growth in cross-border financial linkages over the last 20 years.  Moreover, boom-bust cycles in international financial flows have contributed to financial instability and financial crises in a number of countries. While the coverage of international financial datasets has sharply improved in recent years, this column introduces ...


January 26, 2015, 12:44 pm, 1410014
A


January 26, 2015, 12:44 pm, 1410013
A


January 26, 2015, 12:05 pm, 1410011

Here is our video introducing the supply curve from our principles of micro-economics course at MRUniversity. Supply, Demand and Equilibrium are available now. Next week, elasticity!


January 26, 2015, 12:05 pm, 1410012

As part of a publicity stunt, author James Patterson is giving away 1,000 self-destructing digital advance copies of his latest novel, Private Vegas. If you score one, you have 24 hours to finish the entire book before the text vanishes forever. And if that’s just not risky enough, ...


January 26, 2015, 12:05 pm, 1410010

January 26, 2015, 12:05 pm, 1410005

January 26, 2015, 12:05 pm, 1410007

Very sadly Ernie Banks — the baseball player for you foreigners out there — has passed away.

Oddly, I have taken to quoting him lately.  If you are going out to eat with a small group, I recommend two stops.  No, don’t eat any more food than usual, but ...


January 26, 2015, 12:05 pm, 1410009

Jinfeng Luo and Yi Wen from the St. Louis Fed have a new working paper (pdf), “Institutions Do Not Rule: Reassessing the Driving Forces of Economic Development”:

We use cross-country data and instrumental variables widely used in the literature to show that (i) institutions (such as property rights and ...


January 26, 2015, 12:05 pm, 1410004

Kerin Hope from the FT reports:

A reluctance to pay taxes was much criticised by Greece’s creditors as one reason why the country needed a big international bailout. Now many Greeks are again avoiding the taxman as they bet the radical left Syriza party will quickly loosen fiscal ...


January 26, 2015, 12:05 pm, 1410008

Here is some media coverage of a recent Facebook study of its economic impact in terms of revenue and jobs.  Facebook claims it added $227 billion to the global economy, but they approached the question the wrong way.

The correct method is to treat jobs as a cost of ...


January 26, 2015, 12:05 pm, 1410006

A safety barrier on the median was just installed on the Golden Gate Bridge; unintended consequences follow.

…in the days since the more secure movable median barrier was installed, the average speed of drivers on the approach from the north has jumped even though the speed limit was lowered from ...


January 26, 2015, 12:05 pm, 1410000

Based on my paper, Lessons from Gurgaon, India’s Private City (with Shruti Rajagopalan) I discuss private cities with Russ Roberts over at EconTalk this week.

I think the conversation went well but I haven’t heard it yet so let me also take the time to point you to ...


January 26, 2015, 12:05 pm, 1409999

When I visited Santa Monica in January it struck me how much it reminded me of…Arlington.  Arlington is now essentially a part of Northwest, at least Arlington above Route 50 or so.  Arlington and Santa Monica have never been more alike, or less distinctive.

Parts of east Falls Church will meld ...


January 26, 2015, 12:05 pm, 1410003

Mostly, yes, although with some caveats (the headline of the piece doesn’t exactly capture this).  That is the topic of my latest column for The Upshot.  Here is one excerpt:

Niclas Berggren…and Therese Nilsson…have produced a fascinating series of papers on


January 26, 2015, 12:05 pm, 1410001

Each monastery had its own estates, and all the people farming on these estates paid taxes in money and goods.  One of the main tasks of the stewards was to increase this income; for instance, by lending grain back to the peasants at high interest rates, or selling goods at ...


January 26, 2015, 12:05 pm, 1409998

Quite a bit.  There is a new NBER Working Paper on this topic by Hagedorn, Manovskii, and Mitman, showing (once again) that most supply curves slope upward, here is one key part from the abstract:

In levels, 1.8 million additional jobs were created in 2014 due to the benefit ...


January 26, 2015, 12:05 pm, 1410002

January 26, 2015, 12:04 pm, 1409997
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

Todd McCracken argues that export-loan subsidies doled out by the U.S. Export-Import Bank are justified, in part, because the private market consistently underestimates the profitability of unsubsidized export loans (“Should Congress Reauthorize the Export-Import Bank?” Jan. 26).

Let’s get this argument straight.  Hundreds of ...


January 26, 2015, 12:04 pm, 1409996
https://www.aei.org/wp-content/uploads/2015/01/201
50123_DoestheSinglePointofEntryStrategyEliminateTo
oBigtoFail12314.mp3

In December 2013, the Federal Deposit Insurance Corporation released a proposal on the so-called “Single Point of Entry” (SPOE) strategy as a means of resolving large failing banks without financial-market disruption. In ...


January 26, 2015, 12:04 pm, 1409995

Public policymakers and political pundits tend to focus on problems — understandably, because if things are going right they aren’t thought to need attention. Yet positive developments can teach us things as well, when, for reasons not necessarily clear, great masses of people start to behave more constructively.

One such trend ...


January 26, 2015, 12:04 pm, 1409994

As you may have heard, many left-wing liberals blame the Financial Crisis and Great Recession on free-market economics. (Just like they blamed the Great Depression on too much economic freedom. As the Sacred Scrolls foretell: “All this has happened before, and ...


January 26, 2015, 11:34 am, 1409992

|Peter Boettke|

The Daily Bell published an interview with me yesterday.

For as many years as I can remember as a professional economist I have described my research activities as follows:

My research has primarily been in the area of comparative political and economic systems and the consequences with ...


January 26, 2015, 11:03 am, 1409929

 

While most business economists expect their industries to benefit from low oil prices, others will lose out as as oil and gas firms scale back investment and development.


January 26, 2015, 11:03 am, 1409930

Dutch central bank president Klaas Knot said Sunday he didn’t support the European Central Bank’s new bond-buying program.

Mr. Knot, who sits on the ECB’s Governing Council, said in an interview on Dutch television that he wasn’t convinced of the “necessity and effectiveness” of the program, known as quantative easing.
“Even ...


January 26, 2015, 11:03 am, 1409928
Reuters

Top Federal Reserve officials have been relatively quiet ahead of their policy meeting Tuesday and Wednesday. Since their meeting last month, Chairwoman Janet Yellen and the four other ...


January 26, 2015, 11:03 am, 1409927

MONDAY

Bank of Israel releases a policy statement

TUESDAY

National Bank of Hungary releases a policy statement Federal Reserve begins a two-day policy meeting in Washington

WEDNESDAY

Central Bank of Malaysia releases a policy statement Bank of Thailand releases a policy statement BOE’s Carney speaks in Dublin at 1850 GMT Federal Reserve releases a policy statement at 2 p.m. ...


January 26, 2015, 11:03 am, 1409925

Last year, the federal government’s deficit was the smallest since 2007. Doesn’t $3 trillion in revenue and $3.5 trillion in spending represent a government that’s out of control? Isn’t the deficit only okay because the Federal Reserve has pinned interest rates so low? What will happen when rates go back to ...


January 26, 2015, 11:03 am, 1409926

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, January 26, 2015:

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


Highlights

Derby’s Take: Fed Board Quiet In Run Up To Meeting Fedspeak Cheatsheet: What Are ...


January 26, 2015, 11:03 am, 1409924
From the Dallas Fed: Texas Manufacturing Activity Stalls and Outlook Worsens

Texas factory activity was flat in January, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, came in at 0.7, indicating output was essentially unchanged ...


January 26, 2015, 10:34 am, 1409923
Teaser:

Americans ...