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.


Jobs

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 .


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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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September 2, 2014, 4:44 am, 1327654
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September 2, 2014, 4:36 am, 1327653
Most markets around the globe bounced back in August after July’s drubbing. Although there’s still plenty of risk percolating around the world, there were few signs that investors were becoming cautious last month. US equities led the rally in August: … Continue reading →


September 2, 2014, 3:33 am, 1327649
It is amusing reading day in and day out the Keynesian cure for what ails Europe, especially France.

Consider France. Public spending amounts to 57% of French GDP, yet Keynesians want still more. The sad irony is that 100% would not be enough. In fact, it would make matters ...


September 2, 2014, 3:23 am, 1327648

This is a book that starts with a simple premise: buy stocks at a fraction of the per share intrinsic value of the company, conservatively calculated.  Neat idea, huh, and it is called value investing.

The author starts by giving a preview of where ...


September 2, 2014, 2:05 am, 1327611

Well, “endorsed” isn’t exactly the right word, but I did say “simpatizante.”  Here are my views:

1. I disagree with most of his economic policy, for reasons you can find stated in Adam Smith and the other classical economists.

2. Governments work very hard to stay in power.

3. In a weighted average ...


September 2, 2014, 1:33 am, 1327610
LA boomed in the 1950s and 1960s and much of this infrastructure is now old and depreciating. Durable capital depreciates over time. Walk around my Little Holmby neighborhood in Westwood and you will see some ugly 1950s homes whose current owners are investing in upgrading. These are private homes and ...


September 2, 2014, 1:03 am, 1327587
Next week it is the jobs data’s world, we just live in it. At the Jackson Hole conference, Federal Reserve chairman Janet Yellen highlighted central bank research on labor-market conditions that depends on up to 24 different labor-related series. Many of them will be updated in various releases due next ...


September 2, 2014, 1:03 am, 1327585
A sales promotion advertisement at a housing sales office in Hangzhou, Zhejiang province.  Newscom

After a modest uptick in the middle of the year, the Chinese economy ...


September 2, 2014, 1:03 am, 1327586

BRUSSELS—European Union leaders aim to meet in Italy in October and hold other discussions on the economy in the coming months amid concerns about the faltering recovery.

“In recent weeks, economic data have confirmed that the recovery, particularly in the euro area, is weak, inflation exceptionally low and unemployment unacceptably high,” ...


September 2, 2014, 1:03 am, 1327584
An employee works at a production line inside a Geely factory in Ningbo, Zhejiang province. Reuters

China’s productivity is slipping away, the miracle days are largely over ...


September 2, 2014, 1:03 am, 1327582

The White House and union leaders are using Labor Day reinvigorate efforts to raise the minimum wage.

Legislation to increase the federal pay floor from $7.25 an hour stalled in Congress this spring, but Democrats hope the issue will resonate with voters in November, especially in states with closely contested Senate ...


September 2, 2014, 1:03 am, 1327583

 

Indonesian motorists queue up for gasoline amid a shortage of subsidized fuel. Agence France-Presse/Getty Images

Indonesia squeezed out a narrow trade surplus in July but the Southeast ...


September 2, 2014, 1:03 am, 1327581
Black Knight Financial Services (BKFS) released their Mortgage Monitor report for July today. According to BKFS, 5.64% of mortgages were delinquent in July, down from 5.70% in June. BKFS reports that 1.85% of mortgages were in the foreclosure process, down from 2.82% in July 2013.

This gives ...


September 2, 2014, 12:34 am, 1327580

Austrian economists have been wrongly accused of many intellectual crimes when it comes to fractional reserve banking. Robert Batemarco adds some clarity to the debate.


September 2, 2014, 12:04 am, 1327579

Sandwichman at Econospeak writes more on the of ‘labor’:

Lump of Labor Day Special: Advanced (Elementary) Concepts in Mathematics

“…if there be but a certain proportion of work to be done; and that the same be already done by the not-Beggars; then to employ the Beggars about it, will but ...


September 1, 2014, 11:33 pm, 1327577
Giulio Zanella has a nice post on noisefromamerika, dissecting the sources of Italian deflation. (In Italian, but Google translate does a pretty good job.) Deflation can come from lack of "demand," or from technical innovation and increases in supply. What do the data suggest?


The ...


September 1, 2014, 11:33 pm, 1327576
The significance of the annexation of Crimea by Russia goes far beyond land territorial claims. Here are a couple of maps that show how Crimea affects oil rights in the black sea.

Black Sea Claims Before Crimea Annexation



Black ...


September 1, 2014, 10:45 pm, 1327575
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September 1, 2014, 10:04 pm, 1327572
(September 2, 2014 12:22 AM, by Bryan Caplan) When I was a child, adults taught us to look down on bad winners. The maxim: "It's not whether you win or lose; it's how you play the game." The implicit model was something like: Yes, winning is better than... (1 ...


September 1, 2014, 8:04 pm, 1327566

I think this is too good to excerpt just read
“Want better, smaller government? Hire another million federal bureaucrats.”

by John DiIulio. He argues that the obsession with keeping the number of Federal civilian employees low has reduced efficiency and created powerful concentrated interests represented by powerful lobbies. The ...


September 1, 2014, 7:33 pm, 1327565

Dallas Morning News editorial writer William Ruggles (pictured above) “thought every American had a right to work. He used those words in an editorial on September 1, 1941 (Labor Day) asking for a 22nd amendment to the ...


September 1, 2014, 5:33 pm, 1327550
If I'm reading this correctly, the British Prime Minister will require that British citizens who have spent considerable time in Iraq and Afghanistan will have to attend "deprogramming" classes if they return to England. The enormous economics literature on "treatment effects" has some insights to offer.

I have ...


September 1, 2014, 4:04 pm, 1327549
(September 1, 2014 04:00 PM, by Scott Sumner) MaynardGKeynes recently left this comment: Simple fact is that Shiller correctly predicted 3 of the last 3 bubbles (2000, housing, 2007). That's a widely held view, but is it correct? This is from Eugene Fama's Nobel Prize lecture (in the... (0 ...


September 1, 2014, 3:33 pm, 1327547

The hardest part of doing research is escaping from prejudices.


September 1, 2014, 2:44 pm, 1327518
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September 1, 2014, 2:44 pm, 1327517

THIS week: Central bank meetings and the performance of real wages


September 1, 2014, 2:35 pm, 1327516

by Roger Koppl

Oliver Blanchard tells us “Where Danger Lurks”  in the macro-finance world.

The big theme is nonlinearity, which is a profoundly conservative move: DSGE modeling is just fine and we don’t need to rethink it at all. We just need to add in some nonlinearities. Blanchard does not tell ...


September 1, 2014, 2:05 pm, 1327513

Chinese authorities in the restive western region of Xinjiang have begun offering large cash incentives for interracial marriages in the latest attempt to quell growing unrest among the mainly Muslim Uighur ethnic group that inhabit the region.

The policy, celebrated by local Communist party officials as advancing the “great cause ...


September 1, 2014, 2:04 pm, 1327512
(September 1, 2014 01:51 PM, by David Henderson) Every Labor Day in the last few years, we hear about the decline of unions and how that has been a bad thing. What I find striking is how economically uninformed most of this commentary is. Start with the fact... (2 ...


September 1, 2014, 1:03 pm, 1327489

The White House and union leaders are using Labor Day reinvigorate efforts to raise the minimum wage.

Legislation to increase the federal pay floor from $7.25 an hour stalled in Congress this spring, but Democrats hope the issue will resonate with voters in November, especially in states with closely contested Senate ...


September 1, 2014, 1:03 pm, 1327488

Justin Fox:

What Unions No Longer Do, by Justin Fox: Forty years ago, about quarter of American workers belonged to unions, and those unions were a major economic and political force. Now union membership is down to 11.2% of the U.S. workforce, and it’s increasingly concentrated in the public sector ...


September 1, 2014, 12:05 pm, 1327487

1. What people cured of blindness see.

2. Shoes that show you the way.

3. Which states are in the Midwest?  I say no to all the marginal cases, including Kentucky.  And how can it be that not everyone thinks Iowa is in the Midwest?

4.


September 1, 2014, 12:04 pm, 1327486

September 1, 2014, 11:33 am, 1327484
The Markit Eurozone Manufacturing final data shows Eurozone Manufacturing PMI at 13-month low in August.

The rate of expansion in eurozone manufacturing production eased to its lowest during the current 14-month growth sequence in August, as companies faced slower increases in both total new orders and new ...


September 1, 2014, 11:23 am, 1327483
Is the U.S. economy in the midst of another bond market "conundrum"? The last time we had one was in 2005 when former Fed chairman Alan Greenspan became perplexed over long-term interest rates failing to rise with the tightening of monetary policy. Some observers see something similar ...


September 1, 2014, 11:03 am, 1327445
Two and half years ago I argued that "most of the drag from state and local governments would be over by mid-year 2012. Just eliminating the drag from state and local governments would help GDP and employment growth". This has been an important change.

Here is a graph ...


September 1, 2014, 10:35 am, 1327444

At the gym yesterday morning, I caught site of a TV show discussing "is fracking the future?" Who might usefully discuss this question: geologists? energy economists? Nope. There was the ubiquitous vested interest; Vivienne Westwood, a frock designer; and James Delingpole, whose field of expertise has ...


September 1, 2014, 8:36 am, 1327400
The ISM Manufacturing Index is expected to decline slightly to 56.8 in tomorrow’s update for August vs. the previous month, based on The Capital Spectator’s median econometric point forecast. The estimate is still well above the neutral 50.0 mark and … Continue reading →


September 1, 2014, 8:05 am, 1327397

From ChinaRealTime:

China’s 1% average annual growth in total factor productivity between 1978 and 2012 – a period when average per capita annual incomes rose from $2,000 to $8,000 — compares with 4% annual gains for Japan during its comparable 1950-1970 high-growth period, 3% for Taiwan from 1966-1990 and ...


September 1, 2014, 7:03 am, 1327358
A sales promotion advertisement at a housing sales office in Hangzhou, Zhejiang province.  Newscom

After a modest uptick in the middle of the year, the Chinese economy ...


September 1, 2014, 7:03 am, 1327356

 

Indonesian motorists queue up for gasoline amid a shortage of subsidized fuel. Agence France-Presse/Getty Images

Indonesia squeezed out a narrow trade surplus in July but the Southeast ...


September 1, 2014, 7:03 am, 1327357
An employee works at a production line inside a Geely factory in Ningbo, Zhejiang province. Reuters

China’s productivity is slipping away, the miracle days are largely over ...


September 1, 2014, 6:44 am, 1327355

Switzerland has had consistently low tax rates and a remarkably stable income distribution, although in the last 20 years the share of top incomes has risen. This column documents that the top 0.01%’s share doubled, meaning Switzerland is similar to European countries in terms of the top 1%’s income share, ...


September 1, 2014, 6:44 am, 1327353

European migration exhibits a bias towards low-skilled workers, whereas the US attracts the majority of the world’s skilled migrants. At the same time, the welfare system in Europe is more generous than the one in the US. This column describes an analytical framework that can explain the existence of these ...


September 1, 2014, 6:44 am, 1327354

Central banks’ exchange rate interventions are typically attributed to precautionary, prudential, or mercantilist motives. This column documents the prevalence of an alternative motive – that of stabilising the exchange rate – in emerging markets, where, despite heavy intervention, the Global Crisis saw important deviations of the real exchange rate from ...


September 1, 2014, 6:44 am, 1327352

Nathan Blecharczyk, co-founder and chief technology officer of Airbnb, talks with EconTalk host Russ Roberts about Airbnb, one of the earliest companies to use technology to allow individuals to share underused resources, and in the case of Airbnb, housing. Blecharczyk and Roberts discuss how a ...


September 1, 2014, 5:33 am, 1327351

If you want to be on the Net on this holiday, this list should give you some things to look at.


September 1, 2014, 5:33 am, 1327350



(p. C6) The outcome was perhaps foreshadowed, as Mr. Marciano points out, when President Ford, using a customary unit, noted that American industries were "miles ahead" when it came to adopting the metric system.

Mr. Marciano tells his story more or less without editorializing, until the end. Surveying ...


September 1, 2014, 5:23 am, 1327349

Thanks for the questions, which have been building up in Readers Questions

During the summer holiday, I find it difficult to get into writing economics, but now the new term has started I will get back into the flow. Feel free ...


September 1, 2014, 5:23 am, 1327348

“Readers Question – A microeconomics question. In you labour market section you discuss a monopsonist.You say that “in order to employ one extra worker the firm has to increase the wages of all workers”- why? You give a coal mine as ...


September 1, 2014, 5:03 am, 1327329

 

Indonesian motorists queue up for gasoline amid a shortage of subsidized fuel. Agence France-Presse/Getty Images

Indonesia squeezed out a narrow trade surplus in July but the Southeast ...


September 1, 2014, 5:03 am, 1327328

September 1, 2014, 5:03 am, 1327327

Good news on health care costs:

The Medicare Miracle, By Paul Krugman, Commentary, NY Times: So, what do you think about those Medicare numbers? What, you haven’t heard about them? Well, they haven’t been front-page news. But something remarkable has been happening on the health-spending front, and it should ...


September 1, 2014, 4:04 am, 1327325
(Don Boudreaux)

… is from page 10 of Roger Koppl’s hot-off-the-press monograph, From Crisis to Confidence: Macroeconomics after the Crash (original emphasis):

[T]he central banks inappropriately and needlessly expanded the volume of credit in the years before the boom, thus ensuring a subsequent bust [in 2008].  It was not bankers gone ...


September 1, 2014, 3:03 am, 1327304
A sales promotion advertisement at a housing sales office in Hangzhou, Zhejiang province.  Newscom

After a modest uptick in the middle of the year, the Chinese economy ...


September 1, 2014, 3:03 am, 1327303
An employee works at a production line inside a Geely factory in Ningbo, Zhejiang province. Reuters

China’s productivity is slipping away, the miracle days are largely over ...


September 1, 2014, 2:05 am, 1327302

1. Bolivia became a semi-stable democracy in the early 1980s and it has stayed that way.

2. For all the rhetoric to the contrary, the current regime is a mix of 1990s-era market-oriented reforms and Evo Morales.  Probably you like one of these, though perhaps not both.

3. Many more Bolivian children ...


September 1, 2014, 1:03 am, 1327292
A sales promotion advertisement at a housing sales office in Hangzhou, Zhejiang province.  Newscom

After a modest uptick in the middle of the year, the Chinese economy ...


September 1, 2014, 12:44 am, 1327291
The White House and union leaders are using Labor Day reinvigorate efforts to raise the minimum wage.


September 1, 2014, 12:34 am, 1327290

It’s difficult to envisage a downward-sloping yield curve in an unhampered market economy since this would imply that investors are assigning a higher risk to short-term maturities than long-term maturities. But in today’s economy, an upward- or a downward-sloping yield curve reflects the ...