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.


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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- Recent Entries

January 25, 2015, 2:04 pm, 1409580
According to exit polls the leftist party Syriza clearly won the Greek elections Two exit polls show Syriza with a 12.5 percentage point lead over nearest party, New Demoracy. update a bit more: One poll suggested Syriza took 35.5% of the votes, and the other suggested it took 39.5%, well ...

January 25, 2015, 1:03 pm, 1409556

Gloomy European Economist, Francesco Saraceno:

Who are the Radicals inEurope?: As I write the Greek people are voting. I was puzzled in the past weeks by the fear (more in the media than in markets, actually) of a “radical” left win. Puzzled, because the radical and ideological policy makers ...

January 25, 2015, 1:03 pm, 1409555
The advance estimate for Q4 GDP will be released this week. The consensus forecast is that real GDP increased 3.2% annualized in Q4.

The FOMC GDP projections are for Q4-over-Q4. The most recent FOMC projection was for real GDP to increase 2.3% to 2.5% Q4 2014 over Q4 ...

January 25, 2015, 12:45 pm, 1409554
White House Chief of Staff Denis McDonough on Sunday defended the tax proposals aimed at helping the middle class that President Barack Obama outlined in his State of the Union speech.

January 25, 2015, 12:04 pm, 1409544
(January 25, 2015 11:15 AM, by Scott Sumner) Not surprisingly, there has been lots of criticism of my claim that the Keynesian test of 2013 failed. Let me respond to some of the points: 1. I was accused of cherry picking dates, as I compared growth in the... (0 COMMENTS)

January 25, 2015, 11:34 am, 1409542

|Peter Boettke|

Get this book, and use this book in your classes.

Anthony Evans has established a website for the book, and also has already posted some videos on YouTube with more to come. Right now you can get videos providing an

January 25, 2015, 11:33 am, 1409541

You just don't see things like this every game.

January 25, 2015, 11:03 am, 1409528

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 25, 2015, 9:23 am, 1409525
Many thanks to the team at The Harrodian School, London for alerting us to this excellent economics teaching opportunity. All the details below.

January 25, 2015, 8:34 am, 1409504

In the day job I call Arsene Wenger a great economist. I'm making a serious point.

An economist is not someone who sits in an armchair pontificating about what's wrong with economics or - worse still - about the future. He is someone who ...

January 25, 2015, 8:04 am, 1409501
(Don Boudreaux)

… is from page 63 of the 1997 Johns Hopkins University Press edition of H.L. Mencken’s 1956 collection, Minority Report:

The fact that I have no remedy for all the sorrows of the world is no reason for my accepting yours.  It simply supports the strong probability that yours ...

January 25, 2015, 8:04 am, 1409500
A fairly large number of economists have argued that Keynesians predicted that the fiscal cliff January 2013 and sequestration March 2013 would cause a recession. A fairly large number of Keynesian economists have denied personally making that prediction (including the oversigned). Only following a complaint in comments will I look ...

January 25, 2015, 7:33 am, 1409499

Worth remembering if you read those "expert" evaluations of NFL drafts.

The 2012 NFL Draft is the biggest reason why the Seattle Seahawks have been the best team in the league over the last two years. . . .

They drafted five players that have become ...

January 25, 2015, 6:44 am, 1409478
As India's economy has blossomed in the past decade it has been buying more from America, but its imports from China have grown at a much higher rate. After years as India's biggest trading partner, the U.S. was dethroned by China in 2007.

January 25, 2015, 6:04 am, 1409477
My regular column is available to subscribers on This is an excerpt. It has been a big week for monetary policy, led of course by the European Central Bank’s €1 trillion-plus quantitative easing (QE) programme but also here,...

January 25, 2015, 5:33 am, 1409475

That's onebig chicken.

January 25, 2015, 5:03 am, 1409444

January 25, 2015, 1:33 am, 1409418
Zach Sims, a college dropout founded Codecademy, a website which enables users to learn six popular programming languages, via a simple interface, for free. Codecademy is three-years-old now and Sims has 26 million students.

Sims was invited to the World Economic Forum in Davos to talk ...

January 25, 2015, 12:44 am, 1409397

Among different youth employment programmes, summer employment programmes have received relatively little attention. This column looks at the effects of the New York City’s summer youth employment programme – the largest programme of this kind in the US – on a number of outcomes. Whereas the programme did not raise ...

January 24, 2015, 9:03 pm, 1409390

Reader rtd writes: “…it is virtually guaranteed that after a nation’s business cycle trough, that same nation’s employment growth will display an upward trend”, but when asked about the euro area, argues “The Eurozone is a conglomerate of nations with varying fiscal policies, ideologies, cultures, and the list ...

January 24, 2015, 7:33 pm, 1409388
The rebel attack on Mariupol, Ukraine is underway as noted earlier today in Attack on Mariupol Begins; 7,000-8,000 Ukrainian Forces Nearly Encircled in Northern Cauldron; US Sends Army Trainers.

Disinformation regarding the attack is running rampant, even bordering on the outright ridiculous.

For example, a ...

January 24, 2015, 6:04 pm, 1409377
(January 24, 2015 05:01 PM, by Alberto Mingardi) Italian newspaper Corriere della sera has featured a piece on Greece that included an interview with Feano Fotiu, presented as the person responsible for "solidarity" (meaning the organisation of a parallel safety net, something in itself rather interesting) with Syriza.... (0 COMMENTS)

January 24, 2015, 5:03 pm, 1409364

“A strong dollar has always been a good thing for the United States,” Treasury Secretary Jacob J. Lew declared not long ago, a position that he has restated frequently.

In 2011, Timothy F. Geithner, then the Treasury secretary, said, “A strong dollar ...

January 24, 2015, 4:04 pm, 1409360
(Don Boudreaux)

My Mercatus Center colleague Carrie Conko just alerted me to Julian Le Grand’s and Bill New’s new book, Government Paternalism: Nanny State or Helpful Friend?.  I have not yet read this book, so I can’t offer an opinion on it.  But its publication does provide an opportunity for ...

January 24, 2015, 3:33 pm, 1409359

The upcoming Greek election has renewed interest in the idea of Grexit. This option is often presented to the Greek public as desirable given ...

January 24, 2015, 3:33 pm, 1409358
Yesterday, DNR (Donetsk People's Republic) president Alexander Zakharchenko issued this statement on a ceasefire:

"There will no longer be any attempts to speak about a ceasefire from our side. We will now see how Kiev reacts. Kiev doesn’t currently understand that we can advance in three directions ...

January 24, 2015, 3:03 pm, 1409337

Dean Baker:

Did the Keynesians Get It Wrong in Predicting a Recession in 2013?: I have had several readers send me a blogpost from Scott Sumner saying that the Keynesians have been dishonest in not owning up to the fact that they were wrong in predicting a ...

January 24, 2015, 3:03 pm, 1409336

This was retweeted a surprising number of times:

Throw More Money at Education, by Noah Smith: It’s become almost conventional wisdom that throwing more money at public education doesn’t produce results. But what if conventional wisdom is wrong?

A new paper from economists C. Kirabo Jackson, Rucker ...

January 24, 2015, 3:03 pm, 1409335
The key reports this week arethe advance estimate of Q4 GDP, December New Home sales, and November Case-Shiller house prices.

For manufacturing, the January Dallas and Richmond Fed surveys will be released this week.

----- Monday, January 26th -----
10:30 AM: Dallas Fed Manufacturing Survey for January.

January 24, 2015, 2:44 pm, 1409334
On Capital Journal Roundtable, WSJ's Jerry Seib, Carol E. Lee, Kristina Peterson and Damian Paletta discuss the strategy behind President Obama's bold proposals in his State of the Union address, reaction from Republicans to the address, and whether cybersecurity threats could bring the parties together.

January 24, 2015, 11:33 am, 1409303

Friday was the 50th anniversary of Winston Churchill's death. Here's a fine tribute to him.

January 24, 2015, 11:33 am, 1409302
Justin Wolfers documents:

in recent years around one in 100 [New YorkTimes] articles mentions the term “economist,” ....Far fewer articles mention the terms historian or psychologist, while sociologists, anthropologists and demographers rarely rate a mention.

January 24, 2015, 10:04 am, 1409269
(January 24, 2015 11:15 AM, by David Henderson) One of my pleasures in travel in the United States and Canada is running into, and having short enjoyable conversations with, immigrants from Ethiopia. A little game I play, when I have an interaction with someone--typically in a cab, at... (0 COMMENTS)

January 24, 2015, 10:04 am, 1409268
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

In his superb article “’Secular Stagnation’ and the Cheap Burger” (Jan. 24), Holman Jenkins quotes New Yorker columnist John Cassidy’s curious defense of minimum-wage legislation - namely, Cassidy’s observation that the negative impact of such legislation is “usually confined to teenagers ...

January 24, 2015, 9:03 am, 1409245
This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for Jan 23, 2015.

Changes and comments from surferdude808:

For the second straight week, there is a bank failure that contributed to changes to the ...

January 24, 2015, 8:34 am, 1409244
● American Insecurity: Why Our Economic Fears Lead to Political Inaction By Adam Seth Levine Summary via publisher (Princeton University Press) Americans today face no shortage of threats to their financial well-being, such as job and retirement insecurity, health care costs, and spiraling college tuition. While one might expect that ...

January 24, 2015, 8:04 am, 1409239
(Don Boudreaux)

… is from page 301 of the splendid 2007 collection of some of Joseph Epstein’s essays, In a Cardboard Belt!; specifically, it’s from Epstein’s 2000 essay, in Commentary, entitled “Intellectuals, Public and Otherwise”:

Like the kibitzer, the intellectual stands at the rim of the game, risking nothing but his assertions.  An ...

January 24, 2015, 8:04 am, 1409238
A month late, I learn from brilliant economist Simon Wren-Lewis about the 3.5 year late revelation of the utter contempt that then European Central Bank President Jean-Claude Trichet had for Democracy. I hand the microphone over to brilliant economist Paul DeGrauwe The ECB’s letter to the Spanish government is not ...

January 24, 2015, 7:33 am, 1409233

January 24, 2015, 7:33 am, 1409232

". . . [last month]the gun manufacturer announced the addition of three new offerings to its already expansive product line."

January 24, 2015, 7:33 am, 1409231

A fine, useful piece.

For a shorter version, see Persi Diaconis's remark that if you look at a big enough sample long enough, "almost any damn thing will happen".

January 24, 2015, 7:03 am, 1409213
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 24, 2015, 7:03 am, 1409214
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 24, 2015, 7:03 am, 1409215

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 24, 2015, 7:03 am, 1409211

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

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

January 24, 2015, 7:03 am, 1409209
“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 24, 2015, 7:03 am, 1409210
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 24, 2015, 7:03 am, 1409212

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 24, 2015, 7:03 am, 1409207
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 24, 2015, 7:03 am, 1409208
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 24, 2015, 7:03 am, 1409206
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 24, 2015, 7:03 am, 1409205
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 24, 2015, 6:44 am, 1409204
On Capital Journal Roundtable, WSJ's Jerry Seib, Carol E. Lee, Kristina Peterson and Damian Paletta discuss the strategy behind President Obama's bold proposals in his State of the Union address, reaction from Republicans to the address, and whether cybersecurity threats could bring the parties together.

January 24, 2015, 5:03 am, 1409186

January 24, 2015, 3:23 am, 1409185
The World Economic Forum at Davos tends to stimulate and showcase lots of fascinating material, and has a focus on global issues which is of particular interest for teaching about developing economies - all very useful for Edexcel Unit 4. I strongly recommend having a look at a new BBC ...

January 24, 2015, 1:03 am, 1409154


F. A. Hayek’s macroeconomic theory and policy ideas have gained renewed attention since the recent boom-and-bust cycle followed the basic Hayekian narrative of an unsustainable cheap- money boom ending with a crash. Only to a very limited extent, however, do we find Hayek’s ideas on the agenda of mainstream macroeconomic ...

January 24, 2015, 12:04 am, 1409152
(January 24, 2015 12:03 AM, by Bryan Caplan) Robin Hanson proposed a Capital Day to complement Labor Day. In that spirit, I suggest a Foreigner Day to complement the world's ubiquitous National Days and Independence Days. Here's how Robin explains the point of Capital Day:[J]ust as on Labor... (0 COMMENTS)