Economics Roundtable

March 2017 Fed Funds Rate

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

Click on the image to get a bigger version.

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.

Click on the image to get a bigger version.

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.


The Economics Roundtable is sponsored by EconModel.

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

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- Recent Entries

June 26, 2017, 11:03 pm, 1758609
• Early, Reis Q2 2017 Apartment Survey of rents and vacancy rates.

• At 9:00 AM ET, S&P/Case-Shiller House Price Index for April. The consensus is for a 5.9% year-over-year increase in the Comp 20 index for April.

• At 10:00 AM, Richmond Fed Survey of Manufacturing ...

June 26, 2017, 10:45 pm, 1758608
The generosity of unemployment insurance can influence the time and energy job seekers dedicate to searching for a job, as well as the jobs they are willing to accept. Yet we know little about how unemployment insurance affects the reservation wages of the unemployed. Using new French data, this column ...

June 26, 2017, 10:04 pm, 1758607
CBPP has this pictorial analysis of the increased premiums resulting from the Senate version of the AHCA for a 60 year old at 350% FPL with an ACA Silver plan. “For a 60-year-old with income of 350 percent of the poverty level (about $42 ,000 today) facing the average premium ...

June 26, 2017, 9:34 pm, 1758606
Tim Kroencke at the University of Basel wrote a nice follow up on non-voting shares (previous posts here and here) , which I share with permission. Some of the controversy was whether companies would issue shares and whether investors would by them. It turns ...

June 26, 2017, 8:04 pm, 1758596
(June 26, 2017 07:35 PM, by David Henderson) As I noted last week, I was at an event at the Commonwealth Club of San Francisco to discuss a forthcoming documentary called "Is America in Retreat?" (The video should be available in a few weeks.) The inspiration for documentary... (0 COMMENTS)

June 26, 2017, 7:33 pm, 1758595

If Seattle’s $15 minimum wage experiment is the ‘canary in the coal mine,’ other cities should proceed with caution

In an important article in the Seattle Weekly, Daniel Person summarizes the situation in Seattle pretty well in the title of his exposé “The City Knew ...

June 26, 2017, 6:35 pm, 1758576
There's been a lot of talk recently about the 2% inflation target, and whether or not it would be a good idea to raise it, or change the nature of the target - to price level or nominal GDP targeting, for example. It's instructive, I think, to use as a ...

June 26, 2017, 6:34 pm, 1758575

Continuing a pattern that goes back seven years now, the Supreme Court has once again declined to hear an appeal involving the Second Amendment, in this case, a ruling upholding California’s strict statute governing who may obtain a ...

June 26, 2017, 6:04 pm, 1758573
(June 26, 2017 05:34 PM, by Scott Sumner) The Financial Times has an article claiming that Japanese construction workers are far more productive than American workers. But the data they provide seems to suggest the exact opposite: Reality is the other way around. Despite radically different demographics and... (0 COMMENTS)

June 26, 2017, 6:04 pm, 1758572

June 26, 2017, 6:04 pm, 1758570
Jon Chait has a brilliantly ruthless takedown of the absurd defences of the AHCA (house obamacare replacement) and BCRA (Senate version) . His main point is that Republicans are lying claimiing the huge cuts to Medicaid aren’t cuts to Medicaid and that the huge increase in the number of uninsured ...

June 26, 2017, 6:04 pm, 1758571
WASHINGTON (AP) — Congressional Budget Office sees 22 million more uninsured by 2026 under Senate health bill. open thread.

June 26, 2017, 6:04 pm, 1758569
Richard Layard, How to Beat Unemployment, 1986: “If you ask the man in the street (not Wall Street) what has caused our unemployment, nine times out of ten he will say that it is machines displacing people. In fact for this reason he is often deeply pessimistic about whether we ...

June 26, 2017, 5:33 pm, 1758568

June 26, 2017, 5:03 pm, 1758537
From STR: US hotel results for week ending 17 June

The U.S. hotel industry reported mostly positive year-over-year results in the three key performance metrics during the week of 11-17 June 2017, according to data from STR.

In comparison with the week of 12-18 June 2016, the ...

June 26, 2017, 4:35 pm, 1758536

Equities in emerging markets rebounded last week, posting the strongest gain among the major asset classes, based on a set of exchange-traded products.

Vanguard FTSE Emerging Markets (VWO) climbed 0.8% over the five trading days through June 23. The rise marks the first weekly increase so far ...

June 26, 2017, 4:34 pm, 1758535
By: Joseph T. Salerno

In 1950-51 Hayek presented a seminar at the University of Chicago entitled "Justice and Equality." The seminar was opened to faculty and students and it was Hayek's

. . . hope that the seminar can be conducted with ...

June 26, 2017, 4:04 pm, 1758530

June 26, 2017, 3:34 pm, 1758526
Ed Glaser has a thoughtful essay at City Journal, "The War on Work -- and How to End It.''

It is interesting that our political class says it wants more Americans to work. Yet there are few activities as hit by disincentives and regulatory barriers than the ...

June 26, 2017, 3:33 pm, 1758525

The Jones Act: A case study in protectionism that harms consumers by protecting producers from foreign competition

I wrote last week in the Washington Examiner about the anti-competitive, cost-raising, consumer-impoverishing regulatory dinosaur known as the Jones Act. In my op-ed, I cited Thomas Grennes, a ...

June 26, 2017, 3:03 pm, 1758494

June 26, 2017, 3:03 pm, 1758493

Alex Haberis, Richard Harrison and Matt Waldron at Bank Underground:

The Forward GuidanceParadox: In textbook models of monetary policy, a promise to hold interest rates lower in the future has very powerful effects on economic activity and inflation today. This result relies on: a) a strong link ...

June 26, 2017, 3:03 pm, 1758492

Thomas Piketty:

Will Macron’s Marchers take power?: With over 350 seats, the MPs elected on the «La république en marche» (LREM) ticket will have an overwhelming majority in the Assemblée Nationale (Parliament). Will they use it to be in the forefront of reform and renewal of French politics? Or ...

June 26, 2017, 3:03 pm, 1758491

From the AEA research highlights:

An empirical turn in economics research: Over the past few decades, economists have increasingly been cited in the press and sought by Congress to give testimony on the issues of the day. This could be due in part to the increasingly empirical ...

June 26, 2017, 3:03 pm, 1758490
There are a number of observers who think the stock market is the key barometer of policy success. My view is there are many measures of success- and that the economy needs to work wellfor a majority of the people - not just stock investors.

However,for example, Treasury Secretary ...

June 26, 2017, 2:45 pm, 1758489

June 26, 2017, 2:34 pm, 1758488

By Maurice Obstfeld

June 26, 2017

Men playing chess: countries with rapidly aging populations need funds that they can draw down when their workers retire (photo: Caro/Jandke/Newscom)

Current account imbalances can be healthy or a sign of ...

June 26, 2017, 2:04 pm, 1758480

June 26, 2017, 2:04 pm, 1758479

Calvo and Friston came up with this:

In this article we account for the way plants respond to salient features of their environment under the free-energy principle for biological systems. Biological self-organization amounts to the minimization of surprise over time. We posit that any self-organizing system must embody a generative ...

June 26, 2017, 2:04 pm, 1758478
(June 26, 2017 02:23 PM, by Bryan Caplan) My dear colleague Don Boudreaux comments on my recent questions about the absence of libertarian/progressive cooperation:As he so frequently does, Bryan here hits on its head an important nail solidly, cleanly, and with impressive force. I suspect that the single... (0 COMMENTS)

June 26, 2017, 1:33 pm, 1758454

1/ Looooong tweetstorm on use of contingent valuation method in Exxon Valdez case & what it says on how economics science & expertise work

— Beatrice Cherrier (@Undercoverhist) June 25, 2017

These 48 tweets cover the article that Tim posted earlier and also ...

June 26, 2017, 1:03 pm, 1758423
Freddie Mac reported that the Single-Family serious delinquency rate in May was at 0.87%, down from 0.92% in April. Freddie's rate is down from 1.11% in May 2016.

Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

This is the lowest serious delinquency rate since ...

June 26, 2017, 12:34 pm, 1758422
By: Joseph T. Salerno

The very sluggish recovery of the economy since the financial crisis — despite zero and near zero interest rates — presents the dominant school of New Keynesian macroeconomists with a conundrum. Many have attempted to resolve the riddle ...

June 26, 2017, 12:34 pm, 1758421
By: Murray N. Rothbard

The key issue in the entire discussion is simply this: shall ...

June 26, 2017, 12:34 pm, 1758420
By: Randall G. Holcombe

Last week Ryan McMaken commented on Chinese billionaire Jack Ma's prediction that our grandchildren's work day would shrink to four hours. I agree with Ryan's assessment of Ma's prediction, supported with the facts about how many fewer ...

June 26, 2017, 12:05 pm, 1758414

The Seattle Minimum Wage Study, a study supported and funded in part by the Seattle city government, is out with a new NBER paper evaluating Seattle’s minimum wage increase to $13 an hour and it finds significant dis-employment effects that on net reduce the incomes of minimum ...

June 26, 2017, 11:03 am, 1758380
From the Chicago Fed: Chicago Fed National Activity Index Points to Slower Economic Growth in May

Led by declines in production-related indicators, the Chicago Fed National Activity Index (CFNAI) moved down to –0.26 in May from +0.57 in April. Three of the four broad categories of indicators that make ...

June 26, 2017, 11:03 am, 1758379
From the Dallas Fed: Texas Manufacturing Continues to Expand but at a Slower Pace

Texas factory activity increased in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, fell 11 points to 12.3, indicating output grew ...

June 26, 2017, 10:35 am, 1758378

One aspect of politics that is perhaps under-appreciated is the question: who gets to decide, and how, which issues become prominent and which not?

I say this because on the Sunday Politics yesterday, Andrew Neil interviewed Gerard Coyne (23'20" in). This is odd. How often does ...

June 26, 2017, 10:34 am, 1758377

Senate Majority Leader Mitch McConnell has set a deadline of Friday for a final vote on the Senate GOP’s version of health care reform, but it’s looking increasingly unlikely that he’ll get there:

WASHINGTON — Senate Republican leaders ...

June 26, 2017, 10:04 am, 1758372

June 26, 2017, 9:03 am, 1758339

June 26, 2017, 8:04 am, 1758338

In honor of Prime Minister Narendra Modi’s visit to the United States here are four Indian movies, not movies about India, but Indian movies, that are well worth watching. Most are available on Netflix.

Kahaani ...

June 26, 2017, 8:04 am, 1758337
(Don Boudreaux)

… is from page 25 of my late Nobel laureate colleague Jim Buchanan’s 1977 article “Law and ...

June 26, 2017, 8:04 am, 1758336

June 26, 2017, 7:34 am, 1758333

.Burton Malkiel throws in the towel.

June 26, 2017, 7:34 am, 1758332

Based on something a sophomore discovered.

June 26, 2017, 7:34 am, 1758330

In this weird time "Bayesian Improved Surname Geocoding" probably takes the cake.

June 26, 2017, 7:34 am, 1758331

John Kass, Chicago Tribune. Ouch, this is gonna hurt.

Illinois is like Venezuela now, a fiscally broken state that has lost its will to live, although for the moment, we still have enough toilet paper.

But before we run out of the essentials, let's finally admit ...

June 26, 2017, 7:33 am, 1758329
Richard Peach and Charles Steindel

A major economic concern is the ongoing sluggishness in the growth of output per worker hour, generally called labor productivity. In an arithmetic sense, the growth of ...

June 26, 2017, 6:44 am, 1758300

Robin Feldman of the University of California Hastings College of Law and author of Drug Wars talks about her book with EconTalk host Russ Roberts. Feldman explores the various ways that pharmaceutical companies try to reduce competition from generic ...

June 26, 2017, 5:34 am, 1758299

Regulators think that they're smart. They may well be. But time after time, profit-seeking businessmen have proven they're smarter.

June 26, 2017, 5:34 am, 1758298

A fine refutation of the why-worry-about-terrorism-you're odds-of-being-killed-are-so-small dopey argument.

June 26, 2017, 5:33 am, 1758297

Changes in financial regulation are having a profound impact on the demand for safe assets—assets with a fixed nominal value that may be converted at all times without loss into the means of payment. Not only is demand for safe assets on the rise, but the ability of the private ...

June 26, 2017, 5:23 am, 1758296

This is a small update of my last piece.  I wish that I had put this graph in that piece, because it completes it.

Over the interest rate range of 0% to 30%, the average absolute deviations from perfect doubling using the Rule of 72 was ...

June 26, 2017, 5:23 am, 1758295
Definition of knowledge economy

The sector of the economy which is increasingly based on knowledge-intensive activities, creating a greater reliance on intellectual capital rather than physical inputs.

The OECD state the knowledge economy is associated with:

High-tech manufacturing (computer, electronics, aerospace), Service sector industries, such as education  health care and software design Business services such ...

June 26, 2017, 5:03 am, 1758277

For a market where the S&P 500 isn't changing very much, there's a remarkable about of tension building up in it. Or more accurately, there is tension building in the halls of the big investment banks where big bets are being made, such as JPMorgan, ...

June 26, 2017, 4:04 am, 1758276
We begin in the US: …the Dyke March Collective also ejected three people carrying Jewish Pride flags (a rainbow flag with a Star of David in the center). According to one of those individuals—A Wider Bridge Midwest Manager Laurel Grauer—she and her friends were approached a number of times in ...

June 26, 2017, 2:04 am, 1758264

From Twitter I see this statistic:

Ratio of mean health care spending in richest quintile to mean health care spending in poorest quintile

For the United States, as reported, that ratio is 0.884 for ages 25-64, and for 65 and up the ratio has two varying estimates, ...

June 26, 2017, 12:34 am, 1758257
By: Allen Mendenhall

The Accrediting Council on Education in Journalism and Mass Communications is a nonprofit accrediting agency for journalism programs. Bradley Hamm, the dean at Northwestern’s Medill School of Journalism, has called the council’s accreditation-review process “flawed,” “superficial,” “extremely time-consuming,” ...

June 25, 2017, 10:45 pm, 1758253
While the causes and consequences of mergers have received a lot of scholarly attention, geographic factors have thus far been neglected. Using US data, this column argues that greater geographic overlap of the subsidiaries and branches of two bank holding companies increases the likelihood of the two merging, and also ...

June 25, 2017, 10:45 pm, 1758252
In recent years there has been debate over whether the global trade slowdown and related fall in trade-to-income elasticity was structural or cyclical. This column estimates the standard import equation for 40 advanced and developing economies using an import intensity-adjusted measure of aggregate demand. This measure allows the authors to ...

June 25, 2017, 9:34 pm, 1758251

I came across this post by Mickey Kaus a while ago, on trends in US earnings broken down by education attainment levels. From about the mid-70s to the mid-90s, earnings growth diverged sharply: increasing strongly for those with high levels of education, and falling for people with ...

June 25, 2017, 9:03 pm, 1758247
Schedule for Week of June 25, 2017

• At 8:30 AM ET, Durable Goods Orders forMay from the Census Bureau. The consensus is for a 0.4% decrease in durable goods orders.

• Also at 8:30 AM, Chicago Fed National Activity Index for May. ...

June 25, 2017, 6:34 pm, 1758243

EP is  traveling and not writing this week.

June 25, 2017, 5:33 pm, 1758238

June 25, 2017, 5:33 pm, 1758237

June 25, 2017, 4:04 pm, 1758228
(Don Boudreaux)

As is true of GMU Econ alum Dan Mitchell, I haven’t yet read Nancy MacLean’s Democracy ...

June 25, 2017, 4:04 pm, 1758227
This is an update of this post in which I expressed immense confidence that welfare reform killed people in Florida . The post is based on Muennig P1, Rosen Z, Wilde ET. (2013) “Welfare programs that target workforce participation may negatively affect mortality.” Abstract During the 1990s reforms to ...

June 25, 2017, 2:04 pm, 1758218

1. In one study, young children learn how to deceive in ten days.

2. “A new kind of elevator uses linear motors, similar to those in maglev trains and HyperLoop, to whiz its cabins through shafts, and will be able to move people up, down, left, or right.” ...

June 25, 2017, 2:04 pm, 1758217
(June 25, 2017 02:54 PM, by David Henderson) Answer: It depends. Chicago Tribune columnist Steve Chapman, and also my long-time friend, reminds us of one of the most important principles in economics: There's no such thing as a free lunch. Indeed, this principle is so important that I've... (1 COMMENTS)

June 25, 2017, 2:04 pm, 1758216
(Don Boudreaux)

Here’s the great Bill Allen, emeritus professor of economics at UCLA, interviewed many years ago ...

June 25, 2017, 1:03 pm, 1758206

From Vox EU:

W. Arthur Lewis and the tradeoffs of economics and economists, by Ravi Kanbur, VoxEU: There is nothing new under the sun. The passionate political economy discourses of today consume us entirely. But they are in fact perennials, broaching the fundamental questions of economic policy that have ...

June 25, 2017, 1:03 pm, 1758205
A few brief excerpts from a note by Goldman Sachs economists: The Next Recession: Lessons from History

With the current expansion already the third longest in US history, investors have begun to look ahead to the next recession. ... we find that many pre-WW2 recessions originated in the financial ...

June 25, 2017, 12:04 pm, 1758193
(Don Boudreaux)

… is from page 104 of the 2016 Mercatus Center re-issue of my late colleague Don Lavoie’s ...

June 25, 2017, 12:04 pm, 1758192
This is remarkable even for the Trump administration. Kellyanne Conway claimed that the Medicaid slashing BCRA proposed by the gang of 13 doesn’t include “cuts to Medicaid”. The Trump administration position appears to be that Trump could sign it in to law and keep his promise to protect Medicaid from ...

June 25, 2017, 10:04 am, 1758184

I have an article at voxeu discussing my recent research on how you should (and shouldn’t) try to do this.

June 25, 2017, 9:03 am, 1758173

Nearly eight months since President Donald Trump’s election, a major gap has opened up between how men and women view the president’s handling of the economy.

In the latest Wall Street Journal/NBC news poll, 74% of men think the economy has improved since the election, compared with 25% who ...

June 25, 2017, 8:04 am, 1758172

I never imagined that Canadian finance ministers would one day worry about a shortage of marijuana. Welcome to 2017.

Bloomberg: The biggest challenge for Justin Trudeau’s forthcoming legal recreational marijuana market is a shortage of pot, the finance minister of Canada’s most-populous province says.

…Finance ministers were told demand is ...

June 25, 2017, 8:04 am, 1758171

June 25, 2017, 7:34 am, 1758170

In pretty 360 degree video.

Related ...

June 25, 2017, 5:34 am, 1758159

I wouldn't have guessed.

Related Stories

June 25, 2017, 5:03 am, 1758153

June 25, 2017, 4:04 am, 1758151

A new ranking shows that for the second year running, the world’s fastest supercomputer is TaihuLight, housed at the National Supercomputing Center in Wuxi, China. Capable of performing 93 quadrillion calculations per second, it’s almost three times faster than the second-place Tianhe-2. And in third spot this year is ...

June 25, 2017, 4:04 am, 1758150
My regular column is available to subscribers on This is an excerpt. One year on from the vote, and a couple of weeks on from an election that threw an almighty spanner into the works, the formal negotiations...

June 25, 2017, 2:04 am, 1758142

1. Sarah Binder and Mark Spindel, The Myth of Independence: How Congress Governs the Federal Reserve.  I’ve only been reading the title of this one, as it came in the door just before I left for China.  But I like it already, and even if ...

June 25, 2017, 2:04 am, 1758141
Unionists are not theorists; unionism is an eminently practical thing. — Robert F. Hoxie Theory and trade unionism are almost contradictory terms. — Edward M. Arnos In accordance with this theory it is held that there is a certain fixed amount of work to be done… David F. Schloss ...