Economics Roundtable

NOTICE 9/30/177

The Economics Roundtable website has been up and running for a couple of days now. Further periods of testing will be necessary. The RSS feed is still not working. The left sidebar links are also probably not updating correctly.

The problems were caused by updates to the programming language php and to the Apache operating system. It is taking time to track down the problems this causes with my system. - Bill Parke

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

March 21, 2018, 1:03 pm, 1834759
Prime age labor force participation: disability and homemaking decline About a year ago I wrote a series of posts on various reasons for the relatively low labor force participation by prime age individuals, and its effect on wages; In my post summing up that study I wrote: A major element of the ...

March 21, 2018, 12:38 pm, 1834748

March 21, 2018, 12:34 pm, 1834744

Xi is effectively President of China for life — “collective leadership is dead.” Sooner or later Putin will have to announce how he plans to do the same. Absent a clearly defined and broadly agreed upon succession plan (like term limits), this foreshadows a coming wave of political and economic ...

March 21, 2018, 12:34 pm, 1834743

When the Clinton administration formulated the notion of rogue regime, they defined it as a country that embraced terrorism, was governed by an undemocratic cabal, and did not abide by the norms of diplomacy. Just how much of a rogue regime has Turkey become?

Under President Recep Tayyip Erdogan, Turkey’s 

March 21, 2018, 11:47 am, 1834727

SALT LAKE CITY — So-called free-range parenting will soon be the law of the land in Utah after the governor signed what appears to be the country’s first measure to formally legalize allowing kids to do things on their own to foster self-sufficiency.

The bill, which Gov. Gary Herbert announced Friday ...

March 21, 2018, 11:44 am, 1834726
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture billings continue to hold positive in 2018

The American Institute of Architects (AIA) is reporting an increase in architecture firm billings for February from its Architecture Billings Index ...

March 21, 2018, 11:28 am, 1834719

Breitbart News has seen a significant dropoff in readership over the past several months:

WASHINGTON — Breitbart, the alt-right news site whose executive chairman Steve Bannon was pushed ...

March 21, 2018, 10:42 am, 1834712

March 21, 2018, 10:35 am, 1834708
From the NAR: Existing-Home Sales Rebound 3.0 Percent in February

Despite consistently low inventory levels and faster price growth, existing-home sales bounced back in February after two straight months of declines, according to the National Association of Realtors®. Sizeable sales increases in the South and West offset declines in ...

March 21, 2018, 10:35 am, 1834707
(Don Boudreaux)

Here’s a letter to my frequent e-mail correspondent, and self-described “Trump man,” Nolan ...

March 21, 2018, 10:34 am, 1834706

As chancellor of the City Colleges of Chicago, Cheryl Hyman implemented an ambitious program of systemwide reform called Reinvention. The program doubled graduation rates, improved transfer rates, and streamlined connections between college and careers. Informed by leading research on effective community college programs, Reinvention emphasized a shift in focus from ...

March 21, 2018, 10:11 am, 1834705

What role should social pressure play in the policing of free speech? Two things I’ve seen recently pose this question.

One is the racist harassment of Rufaro Chisango at Nottingham Trent University. I like to think that in better places and times those racist twats would ...

March 21, 2018, 9:04 am, 1834673

March 21, 2018, 9:03 am, 1834672

The Aspen Institute is big on finding “consensus” when it comes to education. And consensus can be a fine thing. Unfortunately, in the case of Aspen’s push to promote “social and emotional learning” in schools, “consensus” takes on an unsavory cast. Indeed, Aspen’s new

March 21, 2018, 8:11 am, 1834656

Intech Investment Management recently published a primer on monitoring market stress by way of several risk metrics, including skewness of returns (SoR). In the grand scheme of quantifying risk, SoR is relatively obscure, but Intech makes a good case for paying more attention to this data.

Applied ...

March 21, 2018, 8:07 am, 1834649

By Valerie Cerra and Sweta C. Saxena

March 21, 2018

New study finds that all types of recessions lead to permanent losses in output and welfare (photo: Peshkov/iStock by GettyImages).

Economic recessions are typically described ...

March 21, 2018, 8:05 am, 1834648

March 21, 2018, 7:24 am, 1834639
(Don Boudreaux)

… is from pages 390-391 of the 1982 Liberty Fund issue of the 1978 Oxford University Press ...

March 21, 2018, 7:08 am, 1834634

This is the web version of the WSJ’s daily economic newsletter. You can sign up for daily delivery here

In today’s issue, Trump takes aim at China’s trade practices, the Fed is expected to raise interest rates, allies are growing concerned with China’s Huawei, the G-20 splits on trade, and corporate ...

March 21, 2018, 7:07 am, 1834633

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

Like drones, driverless cars possess some features of an especially potent scare story. They are a new and exciting technology, and so stories about them get a lot of clicks. We

March 21, 2018, 7:04 am, 1834632
From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 1.1 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 16, 2018.

... The Refinance Index decreased 5 percent ...

March 21, 2018, 6:46 am, 1834631
This is a really nice article about the operation of a particularly unusual labour market, the market for chefs. There are lots of applications here, derived demand being the most obvious.

March 21, 2018, 6:46 am, 1834630
Can a single market work to increase intra-regional trade within Sub Saharan Africa? Here is a great contextual example to read about and use for Year 13 economists studying trade, growth and development and much else besides. 

March 21, 2018, 6:09 am, 1834626

This is just such a nice story.


March 21, 2018, 6:09 am, 1834625

Link courtesy of Michael Greenspan, who quotes Willie Nelson: "Payola ain't dead. It ain't even sick."

I'll add two others: "The more things change, the more they stay the same" and Show me some rules and I'll show you some people trying to game them.

(I'll also note that ...

March 21, 2018, 5:50 am, 1834624

S. Korea’s president hints at 3-way talks with N. Korea and US: CNN
Trump admin may expel Russian diplomats after UK poisoning: CNN
Spending bill in Congress delayed, raising shutdown risk: The Hill

March 21, 2018, 5:48 am, 1834621

O.K., but I'll add three more:

Teach students to write better. Why not mix in some non-fiction? Who said "English" or even "English Literature" has to be just fiction? I don't have any evidence, but I'd bet that most Americans read--and write--more non-fiction rather than fiction. When discussing fiction the focus ...

March 21, 2018, 5:28 am, 1834617

Yet more evidence that Opus is an amazing creation.


March 21, 2018, 5:03 am, 1834614

Key Points

The United States faces a renewed period of great power competition, and the National Security Council, the principle institution for presidential national security decision-making, needs to be up to the task. A disciplined, effective process that is grounded in the NSC’s statutory framework and the lessons of its history can ...

March 21, 2018, 4:09 am, 1834607

Last week, the stock prices of one particular class of companies crashed after regulators at the U.S. Federal Energy Regulatory Commission acted to terminate a tax benefit that it had previously allowed.

Here's an excerpt from the FERC's official 15 March 2018 press release: ...

March 21, 2018, 3:50 am, 1834606

Photo Credit: Brookings Institution


Jerome Powell is not an economist, and as such, has the potential to try to remake the way the Fed does ...

March 21, 2018, 1:04 am, 1834577

Is the trend more important than if there is actually a surplus or deficit, as one commenter suggests? On a bilateral basis, I don’t think either is particularly important, but as a matter of fact I think we need to verify that the US-Canada bilateral trade balance in goods ...

March 21, 2018, 12:38 am, 1834574

The authors are Assa Doron and Robin Jeffrey and the subtitle is Garbage and Growth in India, here is one excerpt from this worthy book:

In India, the tool for cleaning teeth and gums had long been a twig usually taken from a neem tree…, which can ...

March 20, 2018, 9:44 pm, 1834561
(March 20, 2018 11:41 PM, by David Henderson) I will be speaking tomorrow at Mississippi State University in Starkville, MS. Topic: Economic Inequality: Popular Misconceptions and Important Facts Place: Mississippi State University (Building and room TBA) Date: Wednesday, March 20 Time: 5:00 p.m. The talk will be similar... (0 COMMENTS)

March 20, 2018, 7:30 pm, 1834554

March 20, 2018, 7:30 pm, 1834553

March 20, 2018, 7:24 pm, 1834550
(March 20, 2018 07:21 PM, by Bryan Caplan) I'm discussing education at Trinity College with Columbia's Miguel Urquiola on Thursday. Details here. Hope to see you there!... (0 COMMENTS)

March 20, 2018, 7:24 pm, 1834549
(March 20, 2018 07:21 PM, by Bryan Caplan) I'm discussing education at Trinity College with Columbia's Miguel Urquiola on Thursday. Details here. Hope to see you there!... (0 COMMENTS)

March 20, 2018, 7:11 pm, 1834548

March 20, 2018, 7:04 pm, 1834544
Here is my FOMC preview and a preview from Goldman Sachs economists.

• At 7:00 AM ET, The Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• At 10:00 AM, Existing Home Sales for February from the National Association ...

March 20, 2018, 7:03 pm, 1834543
Back when he was a conservative (and didn’t just play one on TV) David Brooks specialized in the ecological inference fallacy. He tried to argue that the Democratic party was the elite party, because Democratic “blue” states are wealthier than red states. He wrote as if all people in blue ...

March 20, 2018, 6:35 pm, 1834535
I want to return to the Stormy Daniels-Donald Trump-Michael Cohen Three-Way Contract.  It's actually really interesting from a contract doctrine perspective (besides being of prurient interest). The continued media coverage and scholarly commentary seems to be missing a key point, namely that this is a contractual ménage ...

March 20, 2018, 6:09 pm, 1834530

I had no idea.

    Related Stories

March 20, 2018, 4:38 pm, 1834512

Mr. Sarkozy, 63, was taken into custody in Nanterre, northwest of Paris, after answering a police summons, according to a French judicial official who spoke on the condition of anonymity, in line with department policy…

The suspicions behind this case first emerged in 2012, when ...

March 20, 2018, 4:35 pm, 1834511

March 20, 2018, 3:33 pm, 1834491

Illinois is the second state to host its primary elections in the 2018 midterm season. With its Chicago-“downstate” divide, and home to the eponymous Chicago-style politics, the state’s electoral outcomes hold many a political observer’s interest. In the age of Trump, Illinois politics have a bit more general ...

March 20, 2018, 3:33 pm, 1834492

Should Congress pass legislation to restore payments to health insurers that the President derided as “bailouts” just five months ago? If it did so, would the legislation increase or decrease overall federal spending?

March 20, 2018, 3:33 pm, 1834490
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.buffon { display: inline-block; text-align: center; vertical-align: middle; padding: 12px 24px; border: 1px solid #008bcc; ...

March 20, 2018, 3:33 pm, 1834489

It’s been 15 years since President George W. Bush made the controversial decision to invade Iraq to oust Iraqi President Saddam Hussein. Alas, while Iraq has taken great strides forward, many of the pundits and policymakers not only continue to treat Iraq and Iraqis as a partisan football, but perpetuate ...

March 20, 2018, 3:33 pm, 1834488

For more than 20 years — since the birth of the Internet Age as we know it — Section 230 of the Communications Decency Act has provided websites with immunity from liability for what their users post. Here is the actual language: “No provider or user of ...

March 20, 2018, 3:26 pm, 1834483

By Evgenia Pugacheva and Mico Mrkaic

March 20, 2018

When governments subsidize private investment in adaptation, the economic costs of extreme weather events can ...

March 20, 2018, 3:24 pm, 1834482
(Don Boudreaux)

Here’s a letter to BloombergMarkets:

You report on a new “study” by the anti-free-trade Coalition ...

March 20, 2018, 3:24 pm, 1834481
(Don Boudreaux)

Here’s a letter to BloombergMarkets:

You report on a new “study” by the anti-free-trade Coalition ...

March 20, 2018, 3:04 pm, 1834468
Note: This is not Mortgage Equity Withdrawal (MEW) data from the Fed. The last MEW data from Fed economist Dr. Kennedy was for Q4 2008.

The following data is calculated from the Fed's Flow of Funds data (released yesterday) and the BEA supplement data on single family ...

March 20, 2018, 2:06 pm, 1834449

March 20, 2018, 1:03 pm, 1834436
Middle East expert Michael Rubin discusses the potential outcome of the meeting of Saudi Arabia's crown prince with president Trump on US/Saudi Arabia relations.

March 20, 2018, 12:38 pm, 1834429

1. Sam Harris interviews Robin Hanson.

2. I still find the Cambridge Analytica story confusing.  This article is useful, but it heightens my confusion too.  Who exactly did what wrong?  And I don’t think I agree with the framing of this ...

March 20, 2018, 12:35 pm, 1834428
Note: This appears to be a leading indicator for industrial production.

From the American Chemistry Council: In Like a Lion: Leading Economic Indicator Logs Strong Year Over Year Growth; Marks Sixth Consecutive Gain

The Chemical Activity Barometer (CAB), a leading economic indicator created by the American Chemistry Council ...

March 20, 2018, 12:05 pm, 1834423
(March 20, 2018 01:56 PM, by David Henderson) I'll be giving a speech at Troy University in Troy, Alabama this afternoon. Topic: How Economists Helped End the Draft Location: Troy University, 129 Bibb Graves Hall Date: March 20 Time: 5:00 p.m. If you're an EconLog reader and want... (0 COMMENTS)

March 20, 2018, 12:05 pm, 1834422

March 20, 2018, 12:04 pm, 1834420

S&P Dow Jones Indices, the “de facto scorekeeper of the active versus passive investing debate,” recently released its SPIVA U.S. Year-End 2017 report (see other reports ...

March 20, 2018, 11:51 am, 1834419

March 20, 2018, 11:43 am, 1834416

March 20, 2018, 11:04 am, 1834393
(Don Boudreaux)

While laying back this morning in a chair at my dentist’s office having my teeth ...

March 20, 2018, 11:03 am, 1834392

On Tuesday and Wednesday next week, Jerome Powell will chair his first Federal Reserve interest-rate-setting meeting. He will do so at a time that Larry Kudlow, President Trump’s newly appointed head of the National Economic Council, is urging the Fed to let the economy rip by keeping interest rates low.

For ...

March 20, 2018, 10:42 am, 1834391

March 20, 2018, 10:35 am, 1834375
Note; This is an update to a post I wrote in 2015.

It was almost 9 years ago that we started discussing the turnaround for apartments. Then, in January 2011, I attended the NMHC Apartment Strategies Conference in Palm Springs, and the atmosphere was ...

March 20, 2018, 10:34 am, 1834374

Following up on an important policy change to reorient safety net programs toward work, the Trump administration has just approved the third state request to implement work requirements in Medicaid. At least seven other state applications to do the same are still pending.

March 20, 2018, 10:04 am, 1834368

Key Points

Two issues have been paramount in recent years regarding the regulation of futures markets: Concern that commodity index investments led to the 2007–08 spike in prices and ...

March 20, 2018, 9:30 am, 1834353

James Kirkup in the FT has a nice piece saying that the centre-left needs more than just whines about Brexit and Corbyn, however justified these might be, but also needs a new economic model. I agree.

Successful political parties need an analysis of capitalism or – ...

March 20, 2018, 9:23 am, 1834339

Congress and the Trump administration want to push standards for colleges and universities in a new direction. The administration is currently rewriting two Obama-era regulations that held for-profit colleges to stricter standards regarding student achievement than their public and private nonprofit cousins. While the final rules are not set in ...

March 20, 2018, 8:34 am, 1834300


As the opioid epidemic worsens in the United States, the toll it imposes on the US economy has risen to staggering heights. The White House Council of Economic Advisers recently estimated the economic burden, inclusive of the value of statistical lives lost, to be $504 billion in 2015. More narrowly ...

March 20, 2018, 8:05 am, 1834285

March 20, 2018, 8:04 am, 1834283

March 20, 2018, 8:04 am, 1834282
Lifted from comments by PGL: The dollar has devalued since Trump became President: Barry Eichengreen has some interesting thoughts here:
-03 “One of the big ones in the circles I frequent is dollar weakness. Between January 2017 and January 2018, the broad effective exchange rate of the dollar fell ...

March 20, 2018, 7:47 am, 1834278

The 2018 Public Choice Outreach Conference, a crash course in public choice for students planning careers in academia, journalism, law, or public policy will held June 9-10 in Arlington VA. Graduate students and advanced undergraduates are eligible to apply. Students majoring in economics, history, international studies, law, philosophy ...

March 20, 2018, 7:47 am, 1834277

A sheriff in Alabama bought a house using money that was budgeted to feed jail inmates. When I saw this headlined a week ago I assumed that this was a run-of-the-mill story about white collar fraud and I ignored it. Yesterday, prodded by new developments, I investigated further. The ...

March 20, 2018, 7:43 am, 1834276
by New Deal democrat February update: real wages and real spending Now that we have February inflation, let’s take an updated look at real wages and real spending. First of all, real average hourly wages increased slightly in February, but are still -0.6% under their July peak: But, because the ...

March 20, 2018, 7:10 am, 1834272

US economic growth in the first quarter will match the modest pace reported in last year’s Q4, according to estimates compiled by The Capital Spectator. The median Q1 forecast points to a 2.5% increase in output, the gain reported for 2017’s final three months, according to the Bureau of ...

March 20, 2018, 7:08 am, 1834265

This is the web version of the WSJ’s daily economic newsletter. You can sign up for daily delivery here

In today’s issue, the EU’s top trade official jets to Washington for tariff talks, the newest White House adviser backs another tax cut, the Federal Reserve weighs higher interest rates, China’s top ...

March 20, 2018, 7:04 am, 1834264
(Don Boudreaux)

… is from page 368 of William Leggett‘s February 11, 1837, Plaindealer essay, “Free ...

March 20, 2018, 7:03 am, 1834263

School reform has been predicated for most of the past two decades on a simple premise: rising test scores mean that students will lead better, more productive lives after graduation. But how confident should we be in that common sense formulation? Yesterday, three accomplished scholars published a

March 20, 2018, 6:39 am, 1834262

Bryan Caplan summarizes some of the points of his recent book.

Related, two favorable reviews of the book: "Is Half of College Education Wasted?" and "The Case Against Education — Bryan Caplan".


March 20, 2018, 6:10 am, 1834258

An old but provocative tax-policy idea—adjusting capital gains for inflation—has renewed life, thanks to a push from conservatives  and a new ally in the White House.

The change, if it happens, would mark a significant shift in U.S. tax policy, reducing taxes dramatically on long-held investments.

The idea is backed by Lawrence ...

March 20, 2018, 6:09 am, 1834257

Distinguished economist Martin Feldstein offers an interesting explanation of the steel and aluminum tariffs.

I hope Jonah Goldberg isn't correct, but I wouldn't bet against him: "The ‘Good Old Days’ of the Trump Presidency".

March 20, 2018, 6:09 am, 1834256

A follow up to a recent post on the bad economics of solar roads. (Thanks to commenter Maddog.)

This is just stupid, stupid, stupid.  Perhaps if solar becomes more efficient and we have run out of space on every roof in the world, one might ...

March 20, 2018, 5:30 am, 1834253

Trump set to impose $60 billion annual tariff on China: The Hill
Possible gov’t shutdown looms as Congress weighs massive spending bill: CNN
Will upcoming US-S. Korea Military drills rattle N. Korea?

March 20, 2018, 5:08 am, 1834247

The risk of a national recession beginning in the United States anytime in the next year, or specifically between 16 March 2018 and 16 March 2019, is slightly over 0.5%. If that sounds very familiar, that is because we wrote an almost identical ...

March 20, 2018, 5:08 am, 1834246

How does a company that made its living off excellent design permit this?


March 20, 2018, 4:04 am, 1834238

Key Points

America’s veterans face two significant challenges in their post-service transition—procuring employment and accessing the education or training associated with particular civilian occupations. Veterans’ transition stress is often mistaken for grave mental health disorders, feeding the “broken veteran” narrative. Legislation geared only toward expanding veterans’ mental health resources unconsciously perpetuates this ...

March 20, 2018, 3:27 am, 1834228

I am agnostic on this question, but Jay L. Zagorsky presents the case for no:

First of all, the Mint creates coins in response to demand, and demand for small-denomination coins is soaring. Over the past decade, the Mint roughly doubled the number of pennies and nickels it shipped. Both ...

March 20, 2018, 3:27 am, 1834227

I am agnostic on this question, but Jay L. Zagorsky presents the case for no:

First of all, the Mint creates coins in response to demand, and demand for small-denomination coins is soaring. Over the past decade, the Mint roughly doubled the number of pennies and nickels it shipped. Both ...

March 20, 2018, 12:42 am, 1834209

March 20, 2018, 12:38 am, 1834206

It seems far more likely that Facebook will be directly regulated than Google; arguably this is already the case in Europe with the GDPR. What is worth noting, though, is that regulations like the GDPR entrench incumbents: protecting users from Facebook will, in all likelihood, lock ...

March 20, 2018, 12:11 am, 1834205