Economics Roundtable

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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February 9, 2016, 12:04 am, 1606613

Deutsche Bank AG became the largest lender in at least four years to feel compelled to reassure investors and employees that it has enough cash to pay its debts.

Germany’s biggest bank said in a statement Monday that it has more-than-sufficient means to pay coupons on its riskiest debt both this ...

February 9, 2016, 12:04 am, 1606612
(February 9, 2016 12:16 AM, by Bryan Caplan) Twenty five years ago, I interned at the Cato Institute and met Jerry Taylor. Now he runs the Niskanen Center. Here's what Jerry says about the movement we've both inhabited for decades:Libertarians love to preach the virtues of markets. Yet... (0 ...

February 9, 2016, 12:04 am, 1606611

The US Navy remains at a crossroads between the grueling demands of global presence and necessary investments in cutting-edge warfighting capabilities. The 2017 defense budget decisively invests in a naval fleet that is more capable, but smaller. Meanwhile, the Navy’s new maritime strategy exhorts sailors to prepare to fight and ...

February 8, 2016, 10:44 pm, 1606589
Many countries exempt foreign-sourced income from taxation at home, with income taxed only in the source country. In 2009, the UK moved from a system of tax credit to a system of tax exemption of foreign-earned income of firms. This column looks at the effects of this reform on firm ...

February 8, 2016, 10:44 pm, 1606588
With the rise of global value chains, trade in intermediates now accounts for more than two-thirds of total trade. This column provides evidence that trade in parts and components of capital goods between new and old EU countries is driven by wage differences across countries. It further shows that wage differences ...

February 8, 2016, 9:34 pm, 1606587

Remember all the old Canadian nationalists? The ones who said that the (Canada-US) Free Trade Agreement would destroy Canadian culture? The ones we economists defeated back in the 1988 election? I'm beginning to wish we hadn't defeated them quite so thoroughly.

They were wrong. But they sorta, kinda, did ...

February 8, 2016, 8:04 pm, 1606567
(Don Boudreaux)

Gary Bryant, in an e-mail, asks:

What is [the] most ridiculous economic fallacy that is believed by a ...

February 8, 2016, 8:04 pm, 1606564

The stunning fall in share prices has raised the question whether we are seeing the beginning of another financial crisis. The answer is no.

The 2008 financial crisis was sui generis, caused by the collapse of an unprecedented bubble in the value of one major financial asset—residential mortgages. Accounting rules accelerated ...

February 8, 2016, 8:04 pm, 1606565


One must certainly agree with Martin Wolf that the world’s central banks would be well advised to start preparing now for the next economic recession given the rising risks in the global economy (“Prepare for the next recession”, February 5). However, it is to be regretted that he does not ...

February 8, 2016, 8:04 pm, 1606566

February 8, 2016, 8:04 pm, 1606562

The Obama administration’s ongoing scandals over immigration, health care, the Internal Revenue Service, and national security share a common denominator: the inexorable growth of government. If Americans are ever to restore accountability to Washington, they must fundamentally change their approach to the Constitution and executive power.

The administrative state reached its ...

February 8, 2016, 8:04 pm, 1606563

Bernie Sanders is widely anticipated to win in New Hampshire tomorrow. In her latest Forbes piece, AEI polling expert Karlyn Bowman discusses how anti-establishment candidates are benefiting from angry voters:

While the level of anger is similar to what it was in the last presidential election, candidates in this cycle ...

February 8, 2016, 8:04 pm, 1606558

When Niall Ferguson published the first volume of his biography of Henry Kissinger last year, much was made of his portrayal of the former national security adviser and secretary of state as not being a foreign policy “realist” before joining the Nixon administration in 1968. To the contrary, as its ...

February 8, 2016, 8:04 pm, 1606559

Benning Wentworth is not a name you’ll run across in New Hampshire primary coverage. But he arguably did as much as anyone else to establish the political culture — or cultures — of America’s first-in-the-nation primary state.

Wentworth was governor of New Hampshire from 1741 to 1766, the longest-serving colonial governor, ...

February 8, 2016, 8:04 pm, 1606560

At Saturday’s debate in New Hampshire, Donald Trump declared, “I would bring back waterboarding and I’d bring back a hell of a lot worse than waterboarding.” On Sunday, he doubled down in an interview with George Stephanopoulos:

STEPHANOPOULOS: As president, you would authorize torture?

TRUMP: I would absolutely authorize something beyond ...

February 8, 2016, 8:04 pm, 1606557

The average condo price in Manhattan has hit an astronomical $1,948,221 in the fourth quarter of 2015. In fact, Manhattan has experienced a 20-year stretch of nearly uninterrupted price increases. Will real estate prices continue to rise, or is it about time for a downward price correction? Manhattan is not ...

February 8, 2016, 8:04 pm, 1606561

In advance of the White House’s release of its 2017 fiscal budget tomorrow, AEI defense experts weigh in on what we can expect for the US military.

Former professional staff member for the House Committee on Armed Services Thomas Donnelly:

One of the striking elements in the president’s 2017 budget request is ...

February 8, 2016, 7:03 pm, 1606530
From the Boston Globe: Gasoline prices slide even lower in Mass.

Gasoline prices fell for the ninth consecutive week in Massachusetts, tumbling to an average of $1.77 a gallon on Monday, according to AAA Northeast.
It remains unclear whether prices have hit rock-bottom, as crude oil and ...

February 8, 2016, 6:44 pm, 1606529

February 8, 2016, 6:04 pm, 1606525
(Don Boudreaux)

In response to this recent post, the great Deirdre McCloskey sent the following ...

February 8, 2016, 4:44 pm, 1606493

February 8, 2016, 3:03 pm, 1606457


Researchers found that having more women in overall executive positions was tied to greater profitability at companies. iStockPhoto

Having female executives is good for a company’s bottom ...

February 8, 2016, 3:03 pm, 1606455

Cecchetti & Schoenholtz:

The Scandal is What's Legal: If you haven’t seen The Big Short, you should. The acting is superb and the story enlightening: a few brilliant outcasts each discover just how big the holes are that eventually bury the U.S. financial system in the crisis of 2007-2009. ...

February 8, 2016, 3:03 pm, 1606456

Greg Kaplan and Giovanni Violante at Microeconomic Insights:

Wealthy ‘hand-to-mouth’ households: key to understanding the impacts of fiscal stimulus: Many families in Europe and North America have substantial assets in the form of housing and retirement accounts but little in the way of liquid wealth or credit ...

February 8, 2016, 3:03 pm, 1606454

Glenn Rudebusch

Will the Economic Recovery Die of Old Age?. SF Fed Economic Letter: Recent economic indicators show that U.S. economic growth has slowed considerably. After adjusting for inflation, aggregate output increased little during the final three months of 2015. Is this the start of a serious stumble by ...

February 8, 2016, 3:03 pm, 1606453
Way back in 2006 I disagreed with some analysts on the outlook for the Inland Empire in California. I wrote:

As the housing bubble unwinds, housing related employment will fall; and fall dramatically in areas like the Inland Empire. The more an area is dependent on housing, ...

February 8, 2016, 2:05 pm, 1606450

1. “Watson, who lives with his wife by the sea, says he is still facing charges under a 1935 law that states no one can possess more than 120 packs of cards at one time.”  The polity that is Thailand.

2. Productivity growth during the Great Depression.

3. ...

February 8, 2016, 2:05 pm, 1606449

The latest trend is social welfare programs to give free food to dogs and other pets (NYT):

The pantries have become part of a broader movement among animal welfare organizations, pet lovers and others that aims to reduce the population of animals in shelters by assisting pet owners before ...

February 8, 2016, 1:33 pm, 1606445

When I teach the principles of economics, I usually start with some variation of the question: Can you name something that isn't scarce? Invariably someone answer 'air.' I usually dance around the issue by making some vague claim that while you may not think air is scarce, ...

February 8, 2016, 1:33 pm, 1606444

… is from a radio interview with Ayn Rand in 1980, which appears in the book Objectively Speaking: Ayn Rand Interviewed (p. 249-250):

Throughout the history of Europe, the values and ideas of its people never changed on one basic point: Europe is a state-worshiping culture. It has ...

February 8, 2016, 1:23 pm, 1606443

Senior Scholar Nancy Folbre was interviewed by Woman’s Work on the wage gap and women’s underrepresentation in economics:

Folbre: [M]arket logic doesn’t apply to care of dependents, a more traditionally feminine obligation. Children, the sick, and the frail elderly don’t fit the preconditions for consumer sovereignty in market exchange. Most care of ...

February 8, 2016, 1:23 pm, 1606442
Ramesh Ponnuru and I respond to the critics of our New York Times op-ed over at Bloomberg View:

Bold theses should receive skeptical reactions, and ours did. We argued in the New York Times that, contrary to what just about everyone believes, the ...

February 8, 2016, 1:03 pm, 1606411
Workers report more access to paid family leave than their employers do, pointing toward more informal arrangements and use of other forms of leave, such as vacation time.

February 8, 2016, 1:03 pm, 1606410
Here is another graph on framing lumber prices. Early in 2013 lumber prices came close to the housing bubble highs.

The price increases in early 2013 were due to a surge in demand (more housing starts) and supply constraints (framing lumber suppliers were working to bring more capacity ...

February 8, 2016, 12:44 pm, 1606409
Salim Furth: In Iowa, Nevada, and Washington state, more than 30% of the workforce is licensed. In 13 other states, less than 20% of the workforce is licensed. The burden is far from equal. ...

February 8, 2016, 12:44 pm, 1606408

February 8, 2016, 12:44 pm, 1606406

February 8, 2016, 12:44 pm, 1606407

February 8, 2016, 12:05 pm, 1606400

1. The Boy & the World.  A Brazilian animated movie, it actually fits the cliche “unlike any movie you’ve seen before.”  Preview here, other links here, good for niños but not only.  Excellent soundtrack by Nana Vasconcelos.

2. The Second Mother.  A Brazilian comedy of manners ...

February 8, 2016, 12:04 pm, 1606399
(February 8, 2016 11:59 AM, by David Henderson) I'm presently working my way through, and enjoying, Robert J. Gordon's magnum opus, The Rise and Fall of American Growth. I'm reviewing it for Regulation and already, just 30 pages in, I'm seeing some problems. Arnold Kling highlighted a paragraph... (3 ...

February 8, 2016, 12:04 pm, 1606398

February 8, 2016, 11:34 am, 1606397

Steve Serby, New York Post, January 29, "Broncos missile can recreate Tom Brady’s hell for CamNewton":

Miller was on the other end of the phone Friday when I informed him I am picking him to be MVP of Super Bowl 50. . . .Miller won’t be quarterbacking. ...

February 8, 2016, 11:03 am, 1606366
Job applicants await their turn at the Lockheed Martin booth at a U.S. Chamber of Commerce Foundation ‘Hiring Our Heroes’ military job fair in Washington on Jan. 8.

February 8, 2016, 11:03 am, 1606365
This is a key distressed market to follow since Las Vegas has seen the largest price decline of any of the Case-Shiller composite 20 cities.

The Greater Las Vegas Association of Realtors reported Local Housing Market Starts 2016 With Steadily Rising Home Prices

According to GLVAR, the ...

February 8, 2016, 10:44 am, 1606363

February 8, 2016, 10:44 am, 1606364

February 8, 2016, 9:34 am, 1606356

February 8, 2016, 9:23 am, 1606355

February 8, 2016, 8:44 am, 1606323
Since 1964, three election years—1980, 1992 and 2008—have posted a higher unemployment rate in November than January, the first and third as the result of a recession. So as you track the latest poll numbers, keep an eye on the jobless rate, too.

February 8, 2016, 8:44 am, 1606321

February 8, 2016, 8:44 am, 1606322

February 8, 2016, 8:44 am, 1606320
The presidential campaign has brought new attention to the problem of banks that are too big to fail (TBTF).

As everyone agrees, the largest banks are bigger than ever. As the following ...

February 8, 2016, 8:35 am, 1606319
The crowd piled into investment-grade bonds last week as economic worries triggered an exodus out of risky assets. Reviewing the major asset classes for the week just passed through an ETF lens reveals sharply divided results. The safe-haven trade generated handsome gains for several ETFs representing broad measures of the ...

February 8, 2016, 8:34 am, 1606318

Saturday’s protest by Liverpool fans at the proposed rise in ticket prices poses a question: why are football tickets so cheap?

What I mean is simple. Fans are addicts; many would pay much more to see their team. Demand is therefore price-inelastic. And despite playing indifferent ...

February 8, 2016, 8:34 am, 1606317

WSJ Citypasses on word that “Work Phones Are Being Phased Out at Banks.”

It has long been considered a standard part of a City worker’s tool kit, but the work phone could be on the way out as banks seek to encourage individuals to use their personal devices.

Banks including Citi, ...

February 8, 2016, 8:05 am, 1606313

Here is a powerful video from the Tomorrow’s Cures Today Foundation on the right to try experimental medicines. I sometimes worry that we hold out too much promise to patients. Tomorrow’s drugs are rarely cures. Tomorrow’s drugs are a little bit better than today’s and that is how progress is made. ...

February 8, 2016, 8:04 am, 1606312
(Don Boudreaux)

… is from a personal conversation that I had in the summer of 1991 with Julian Simon.  I was then ...

February 8, 2016, 7:34 am, 1606308


Most importantly, we know that your minimum-wage job did not teach you “patience, teamwork and leadership.” No one learns anything from minimum-wage jobs except how much they hate people and that they shouldn’t have majored in political science.

February 8, 2016, 7:34 am, 1606309

Michael Barone:

How stupid and vicious does he think we are?

Actually, it's not that hard for ordinary people to keep in mind two different ideas that the elites think they'll find confusing — that most terrorists these days are Muslims, and that most Muslims are not ...

February 8, 2016, 7:34 am, 1606306

It certainly sounds promising. Bring it on!

The annals of cancer research are full of brilliant ideas that failed, but neoantigen vaccines just might be an exception.

Link via

Related:"The Man Who Would Tame Cancer".

February 8, 2016, 7:34 am, 1606305

Entertaining and informative (about 1 hour video of a talk + about 20 minutes of Q & A).

The F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics welcomed Roland G. Fryer, Jr., the Henry Lee Professor of Economics and faculty director of the Education ...

February 8, 2016, 7:34 am, 1606307

As always with forecasts, the proper qualification is "maybe". But Richard Cohen, "a senior fellow at the Economic Strategy Institute," predicts

. . . that as a new “virtualized infrastructure” gets built out over the next 15 years, as many as 25 million jobs will be created. He ...

February 8, 2016, 7:33 am, 1606304

If you haven’t seen The Big Short, you should. The acting is superb and the story enlightening: a few brilliant outcasts each discover just how big the holes are that eventually bury the U.S. financial system in the crisis of 2007-2009. If you’re like most people we know, you’ll walk ...

February 8, 2016, 7:03 am, 1606273

At the end of the last week of January 2016, stock prices rallied on the news that the Bank of Japan would implement negative interest rates in that country and that the Fed was likely to back off its plans to hike interest rates again before ...

February 8, 2016, 6:44 am, 1606272

Adam Ozimek of Moody's Analytics and blogger at Forbes talks with EconTalk host Russ Roberts about why economists change their minds or don't. Ozimek argues that economists make erratic but steady progress using econometrics and other forms of evidence ...

February 8, 2016, 6:35 am, 1606271
● US jobs growth slows in Jan; jobless rate hits 8-yr low | MarketWatch ● Sluggish jobs report raises questions about US economy | LA Times ● Yellen to Balance Confidence With Caution in Testimony | Bloomberg ● Strong US dollar stokes recession fears | Sydney Morning Herald ● U.S. ...

February 8, 2016, 5:34 am, 1606268

Sites for online courses, learning how to code, "learn[ing] to work with data," and more.

February 8, 2016, 5:03 am, 1606257

"It feels as if you’ve entered a different intellectual and moral universe":

The Time-Loop Part, by Paul Krugman, Commentary, NY Times: By now everyone who follows politics knows about Marco Rubio’s software-glitch performance in Saturday’s Republican debate. ... Mr. Rubio’s inability to do anything besides repeat canned talking points ...

February 8, 2016, 4:04 am, 1606255

Impact Investing has emerged as an innovative and powerful tool to create change. To address today’s major global challenges, high-impact philanthropy leverages grant and investment dollars to create a multiplier effect and spur new investments. Through public-private partnerships, meaningful and rigorously measured impact investments, and innovative programs such as 10,000 ...

February 8, 2016, 3:03 am, 1606234

February 8, 2016, 2:04 am, 1606233

Dennis Shiraev emails me:

You are an investor with $10 million planning to cash out in 20 years. A genie appears and offers to send you the price of one but only one asset 20 years from now to inform your investment decisions (a stock, currency pair, commodity, equity index, etc.). ...

February 8, 2016, 2:04 am, 1606232
(February 8, 2016 12:35 AM, by David Henderson) On Monday, February 8, I will be giving a talk at the University of Toronto. Topic: An Economist's Case for a Non-Interventionist Foreign Policy Time: 3:00 p.m. to 5:00 p.m. Location: Croft Chapter House The public is welcome, but you... (0 ...

February 8, 2016, 1:33 am, 1606230

February 8, 2016, 12:04 am, 1606219
(February 8, 2016 12:04 AM, by Bryan Caplan) Barely two years ago, Tyler Cowen and I agreed to the following bet:...U.S. unemployment will never fall below 5% during the next twenty years. If the rate falls below 5% before September 1, 2033, he immediately owes me $10. Otherwise,... (0 ...