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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September 25, 2016, 4:34 pm, 1678362

As a newspaperman, I’ve been writing about the global economy and its national components practically since I began. They’re familiar concepts. But where did such constructs come from? And what exactly do they mean? I was happy to have a couple of days to spend last week at a conference ...

September 25, 2016, 4:04 pm, 1678360

1. Doubts about the supposed Chinese skeletons found in Rome, 3-5th century A.D.  Still, China to Rome just isn’t that far, and it is naive to believe this kind of contact didn’t exist.  Study the history of the Polynesians.

2. The main influences on Sam Bowman.

3. ...

September 25, 2016, 4:04 pm, 1678359
(Don Boudreaux)

Here’s a letter to a new correspondent:

Dr. Harlan Quarles:

Dr. Quarles:

You write that you find “hysterically laughable” all attempts by “free marketeering nut ...

September 25, 2016, 3:33 pm, 1678353
Ellen Barry has written an excellent piecethat would leave Marx and Engels scratching their heads. In Bangalore, India young rural women are moving to the big city to work in the factories. The article sketches a highly optimistic arc that these women enjoy great improvements in their quality of ...

September 25, 2016, 3:33 pm, 1678352
First, a disclaimer. I ride the Expo Line from Westwood to USC several days a week. This Line extension to the beach cost over 1.5 billion dollars. The new ridership numbers suggest that the monthly ridership has increased by 13,000 since the opening of the extension ...

September 25, 2016, 1:03 pm, 1678339
The automakers will report September vehicle sales on Monday, October 3rd.

Note: There were 25 selling days in September, the same as in September 2015.

From WardsAuto: Forecast: U.S. SAAR to Rebound in September

The forecast 17.6 million SAAR is greater than 16.9 million from prior-month ...

September 25, 2016, 12:04 pm, 1678334

The author is Ben H. Shepherd and the subtitle is The German Army in the Third Reich.  That may seem like a timeworn topic, but I found this book consistently fresh and interesting, also well-written, analytic throughout, one of the year’s best non-fiction studies.  Here is one ...

September 25, 2016, 12:04 pm, 1678333
(September 25, 2016 10:24 AM, by Scott Sumner) I recently listened to a podcast where David Beckworth interviewed Cardiff Garcia, of FT Alphaville. I agreed with most of the things Garcia had to say, including his observations on the recent growth slowdown. He discussed the way that top... (0 COMMENTS)

September 25, 2016, 12:04 pm, 1678332
(Don Boudreaux)

Bob Higgs gets to the heart of the benefits of trade.  A slice:

Yet producing and exporting goods is clearly always ...

September 25, 2016, 12:04 pm, 1678331
(Don Boudreaux)

Here’s a wonderful, short video on trade featuring Tom Palmer.  (I believe that I failed to mention it here, ...

September 25, 2016, 10:04 am, 1678324
(Don Boudreaux)

… is from page 18 of Arnold Kling’s splendid new book (2016), Specialization and Trade: A Re-introduction to ...

September 25, 2016, 7:33 am, 1678312

How can the Cheshire Cat disappear, but its smile remain?

How can money disappear from a New Keynesian model, but the Central Bank still set a nominal rate of interest and create a recession by setting it too high?

Ignore what New Keynesians say about their own New Keynesian models ...

September 25, 2016, 7:33 am, 1678311

Belichick being smart again.

He reminds me of the line used about Bill Gates: "He has five brains and each one of them is smarter than yours."

September 25, 2016, 6:34 am, 1678310

Corbynistas have gotten into the habit of calling their opponents “Blairites”. In some cases, this is unwarranted not because it is a smear, but because it is an unjustified compliment.

I mean this is two different senses.

One concerns immigration. Chuka Umunna thinks the UK should ...

September 25, 2016, 6:04 am, 1678309
My regular column is available to subscribers on This is an excerpt. A few days ago it was announced that Minouche Shafik, who joined the Bank of England as one of its deputy governors two years ago, would...

September 25, 2016, 5:33 am, 1678307

Notre Dame declined to give their side, but if Weis's story of how they treated his son is correct, Notre Dame should be deeply ashamed.

September 25, 2016, 5:03 am, 1678295

September 25, 2016, 2:04 am, 1678270

When should you place a higher penalty on transparently false outright repeated lies, and when should you be more upset by hypocrisy, namely a mix of altruism and self-interest and greed and defensiveness, bundled with self-deception and pawned off to everyone including yourself as sheer goodness?  In recent times ...

September 24, 2016, 10:04 pm, 1678259
(Don Boudreaux)

… is from page 24 of the 1998 Liberty Fund reprint of John Maxcy Zane’s 1927 volume, ...

September 24, 2016, 6:44 pm, 1678245

September 24, 2016, 6:04 pm, 1678244

During the 1988 presidential debates, no one asked either of the candidates about Iraq, yet soon the US was at war in the Persian Gulf to repel Iraq’s invasion of Kuwait. During the 2000 presidential debates, no one asked either candidate about the threat from al Qaeda, yet within months ...

September 24, 2016, 5:33 pm, 1678242
The economics of boycotts is pretty straightforward. Customers who vote with their pocketbook and choose not to purchase a product can reduce the profits of their target if there is a consensus to boycott the "bad guy". If there is a neutral economic agent who does not have a taste ...

September 24, 2016, 5:03 pm, 1678233

A colleague, Bruce Blonigen, has a new paper at the Economic Journal:

When Industrial Policy Harms Performance: Evidence from the World Steel Industry, by Romesh Vaitilingam RES: The use of industrial policies to support a country’s steel sector has damaging effects on the export competitiveness of downstream manufacturing sectors ...

September 24, 2016, 4:04 pm, 1678231

1. Peruvian interview with me (in Spanish).

2. Details on Doug Irwin’s just-delivered history of trade book.

3. Wells on Joyce: “And while you were brought up under the delusion of political suppression I was brought up under the delusion of political responsibility.”


September 24, 2016, 4:04 pm, 1678230
(Don Boudreaux)

Here’s a letter to a correspondent:

Mr. Craig Morgan:

Thanks for your kind e-mail.  Perplexed that I don’t vote in ...

September 24, 2016, 2:04 pm, 1678226

September 24, 2016, 2:04 pm, 1678225
Washington Post blogger Paul Waldman yesterday posted a lengthy post titled “Why Hillary Clinton was right to separate Donald Trump from the GOP” in which he makes the same mistake that Clinton herself has made since she secured the nomination in early June: conflating the five-decades-long Republican racial/xenophobic/culture-wars Southern-and-blue-collar-white strategy ...

September 24, 2016, 12:44 pm, 1678220

John Dizard has a useful, and clearly written, piece on the lay of the land in this morning's FT. What puzzles me is why PDVSA, the national oil company,  has not done a UK scheme of arrangement or a US prepack to exchange the bonds, instead of messing ...

September 24, 2016, 12:04 pm, 1678217

The landmass of Bangladesh is one-118th the size of Russia, but its population exceeds Russia’s by more than 25 million.

Most of the article (NYT) is about the unbearably bad traffic in Dhaka.  Every year 400,000 new people arrive in Dhaka, the city has only 60 traffic lights, ...

September 24, 2016, 12:04 pm, 1678216
(September 24, 2016 12:36 PM, by David Henderson) Co-blogger Scott Sumner posted yesterday some interesting facts and figures about the post World War II economic boom in the United States that came after the U.S. government cut government spending massively. I wrote a study on this for Mercatus... (0 COMMENTS)

September 24, 2016, 12:04 pm, 1678215
(Don Boudreaux)

Shikha Dalmia debates Jeremy Waldron on freedom of speech.  A slice from Shikha’s remarks:

I think it’s fair to say that ...

September 24, 2016, 11:33 am, 1678213

Desvousges, Mathews and Train (2015)[DMT] find that their contingent valuation method (CVM) survey does not pass the adding up test. In a previous post (Whitehead, Sept. 20,2016) I examined the data used by Desvousges, Mathews and Train (2015) and find that "it is ... not clear if[the data]passes ...

September 24, 2016, 11:33 am, 1678212

September 24, 2016, 11:33 am, 1678211

…. is from the editors of National Review in the September 12, 2016 issue:

When the cynically misnamed Affordable Care Act was passed, Democrats and their media megaphones assured the American public that this was a carefully crafted piece of policy architecture. Time would tell, and now it is telling — ...

September 24, 2016, 10:04 am, 1678197
(Don Boudreaux)

… is from page 72 of the Ben Rogge’s late-1970s speech “What Economists Can and Cannot Do,” as this essay ...

September 24, 2016, 10:04 am, 1678196

September 24, 2016, 9:33 am, 1678195

I read Andrew Gelman's post the other day and was wondering what to excerpt. Alex Tabarrok figured it out for me:

ThisAndrew Gelman post on the replication crisis and the role that blogs have played in generating that crisis starts off slow but just builds and builds until by the ...

September 24, 2016, 9:33 am, 1678194

Convergent validity of stated preference methods to estimate willingness-to-pay for seafood traceability: The case of Gulf of Mexico oysters

John C. Whitehead, O. Ashton Morgan and William L. Huth

No 16-15, Working Papers from Department of Economics, Appalachian State University

Abstract: In this study we compare willingness to pay for a ...

September 24, 2016, 9:33 am, 1678193

Lost Recreational Value from the Deepwater Horizon Oil Spill Using Revealed and Stated Preference Data

John C. Whitehead, Tim Haab, Sherry Larkin, John Loomis, Sergio Alvarez and Andrew Ropicki

No 16-16, Working Papers from Department of Economics, Appalachian State University

Abstract: The lost recreational use values from the BP/Deepwater Horizon oil ...

September 24, 2016, 9:33 am, 1678192

Some interesting facts about the poor financial performance of Harvard’s $38 billion endowment, from the Boston Globe article “Harvard endowment posts 2 percent loss“:

1. ...

September 24, 2016, 9:03 am, 1678183
The key economic report this week is August New Home Sales. Other key indicators include Personal Income and Outlays for August, and the Case-Shiller House Price Index for July.

Also the third estimate of Q2 GDP will be released.

For manufacturing, the September Richmond and Dallas manufacturing ...

September 24, 2016, 8:34 am, 1678182

The Wealth of Humans: Work, Power, and Status in the Twenty-first Century
By Ryan Avent
Summary via publisher (St. Martin’s Press)
None of us has ever lived through a genuine industrial revolution. Until now. Digital ...

September 24, 2016, 8:04 am, 1678180

Curing disease is good, right? No. Jemima Lewis, writing in the Telegraph, says curing disease is a sickeningly bad idea:

…the Zuckerberg-Chans have the most ambitious vision yet: developing new technologies and medicines to tackle every disease ever invented.

We’d better hope they don’t succeed. What would it do to ...

September 24, 2016, 8:04 am, 1678179
(Don Boudreaux)

I don’t always agree with Richard Epstein, but I typically do.  He is, without doubt, one of ...

September 24, 2016, 7:33 am, 1678177

A cool little story about Bob Dylan's early acetates, Rolling Stone, and the heretofore unknown to me "Gell-Mann Amnesia Effect".

September 24, 2016, 5:33 am, 1678173

An interesting try, but even if one of the theories advanced explains why they did, they don't explain why they do now.

September 24, 2016, 5:33 am, 1678172

(p. B8) Corey Heller often finds himself ordering fresh business cards. The human resources executive has switched employers nine times since 1996--and spent less than three years at six of those workplaces.

In any other era, the 51-year-old Mr. Heller would be viewed as an unstable job hopper. ...

September 24, 2016, 5:03 am, 1678167

September 24, 2016, 4:04 am, 1678166

The transfer [estate] taxes are highly distortive of economic activity. In fact, they probably do the most damage to output and income per dollar of revenue raised of all the taxes in the U.S. tax system. There are two reasons. First, they are an additional layer of tax on ...

September 24, 2016, 2:04 am, 1678158

There are a few possible routes to establishing a monopoly in quant trading. Here’s one that seems to work really well. It’s kind of hard to explain, so bear with me. Many trading signals reliably predict prices, but not strongly enough to overcome transaction costs (i.e. exchange fees, clearing ...