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 14, 2016, 5:03 pm, 1608559

February 14, 2016, 3:03 pm, 1608554

In graduate school, we were required to take a history of economic thought course and there were two courses on US economic history (and we faced a core exam in the history of thought if we got less than a certain grade). Requirements like that have faded over time in ...

February 14, 2016, 3:03 pm, 1608553

Our GDP-based recession indicator index is now available from FRED, the database maintained by the Federal Reserve Bank of St. Louis.

February 14, 2016, 12:34 pm, 1608540
Strange thing happened the other day. I was looking for news stories on the keen insight and deft policy decisions of central bankers, and couldn't find any. Here are some of the other, less-flattering stories:

New York Times: "Swedish Bank Move Creates a Global Shudder"

David Beckworth: ...

February 14, 2016, 12:04 pm, 1608537

Smithsonian: [K]issing helps heterosexuals select a mate. Women in particular value kissing early on. Saliva is full of hormones and other compounds that may provide a way of chemically assessing mate suitability—that’s the biological ...

February 14, 2016, 12:04 pm, 1608536

February 14, 2016, 12:04 pm, 1608535
(February 14, 2016 10:40 AM, by Scott Sumner) Saturos directed me to a comment by Eliezer Yudkowsky: Just realized today that besides giving a real-world example of epistemic efficiency, markets also provide a real-world source of Newcomblike problems. Efficient markets can be so good at predicting you that... (2 COMMENTS)

February 14, 2016, 12:04 pm, 1608534
(February 14, 2016 12:49 PM, by David Henderson) On a flight from Newark to L.A. on Thursday, I saw the movie Trumbo. I liked it a lot. I know that they left out things that would have made Trumbo a much less sympathetic character. The only real discussion... (1 COMMENTS)

February 14, 2016, 12:04 pm, 1608533
(Don Boudreaux)

Here’s another letter to a listener who heard Ross Kaminsky’s radio interview with me on Thursday.

Mr. ...

February 14, 2016, 11:03 am, 1608524
Note: There were some large swings in LA area port traffic early last year due to labor issues that were settled in late February. Port traffic slowed in January and February last year, and then surged in March 2015 as the waiting ships were unloaded (the trade deficit increased ...

February 14, 2016, 10:04 am, 1608519
A 20th anniversary reminder that an authentic randomized control trial proved beyond all conventional statistical significance levels and all reasonable doubt that welfare reform killed people. I will just note a very crude calculation. The experimental point estimate is that Florida’s welfare reform caused death rates to increase by 16%. ...

February 14, 2016, 10:04 am, 1608518

Our nation lost one of its leading lights on Saturday with the death of Antonin Scalia, Associate Justice of the Supreme Court.

Today, constitutional theory orbits around Justice Scalia. Even though his tenure on the Court is not characterized by a string of landmark majority opinions, his demanding intellect, rigorous theories, ...

February 14, 2016, 8:04 am, 1608493
(Don Boudreaux)

… is from page 43 of Stephen Macedo’s 1986 monograph, The New Right V. the Constitution; (by “New Right” Macedo ...

February 14, 2016, 8:04 am, 1608492
(Don Boudreaux)

The Wall Street Journal’s Kim Strassel asked Donald Trump in tonight’s ...

February 14, 2016, 7:34 am, 1608490

Probably not yet. But if we wins it all this coming year, I'd second it.

February 14, 2016, 7:34 am, 1608489

Presents four possible reasons why not and gives this truly excellent advice:

Apparent departures from rational behaviour should not lead us to immediately decry stupidity. They should instead be cues to investigate further why people are behaving as they are.

February 14, 2016, 5:33 am, 1608480

(p. A1) INDIAN LAND, S.C. -- Twenty-five years ago, Ni Meijuan earned $19 a month working the spinning machines at a vast textile factory in the Chinese city of Hangzhou.

Now at the Keer Group's cotton mill in South Carolina, which opened in March, Ms. Ni is training ...

February 14, 2016, 4:05 am, 1608475

February 14, 2016, 3:03 am, 1608453

From VoxEU:

How to fix Europe’s monetary union: Views of leading economists, Richard Baldwin and Francesco Giavazzi, VoxEU: Important progress has been made in repairing the design faults that the EZ Crisis revealed. This new VoxEU eBook argues that fixing the Eurozone is a job half done. The eBook, which ...

February 14, 2016, 2:44 am, 1608452
There are some risks that households cannot insure against or avoid. These are often called ‘background risks’, with the most prominent being labour income risk. In this column, the authors revisit the importance of background risk for portfolio allocation. Addressing some limitations in the current literature, they find that the ...

February 14, 2016, 2:04 am, 1608450

From the WSJ:

U.S. consumers showed signs of strength in January, taking advantage of low oil prices to increase their spending and offering a welcome counterpoint to the gloom that has gripped investors and roiled markets since the start of the year.

Sales at retail stores and restaurants rose 0.2% ...

February 13, 2016, 10:04 pm, 1608437
Dan Crawford emailed me shortly after the news broke about Justice Scalia’s death, asking whether I have any random thoughts about it.  Here’s what I wrote back: I posted a comment to Bill’s post on the announcement, saying that I think everyone should take a deep breath before saying much ...

February 13, 2016, 9:33 pm, 1608436
…. is Milton Friedman, writing in the introduction of his 1962 book Capitalism and Freedom (emphasis mine):

In a much quoted passage in his 1961 inaugural address, President Kennedy said, “Ask not what your country can do for you – ask what you can do for your country.” Neither half of ...

February 13, 2016, 8:04 pm, 1608428

Washington, February 13, 2016, on the passing of Senior US Supreme Court Associate Justice Antonin Scalia: 

With the passing of Antonin Scalia, America has lost a patriot and unwavering defender of the Constitution. At AEI, we have lost a friend and colleague. Antonin Scalia and his wife, Maureen, have been a ...

February 13, 2016, 6:04 pm, 1608419

From 1985 (pdf):

But still, that seemed to me a peculiar way to put it — contrasting economic affairs with human affairs as though economics is a science developed for the benefit of dogs or trees; something that has nothing to do with human beings, with their welfare aspirations, ...

February 13, 2016, 6:04 pm, 1608418
My regular column is available to subscribers on This is an excerpt. Every recording artist is familiar with the idea of the difficult second album – the tricky follow-up to a successful debut – as is every author of...

February 13, 2016, 6:04 pm, 1608417
The significance and impact on the nation and SCOTUS of his passing goes without saying. If President Obama can appoint a more liberal Justice on the Court, the balance could shift and perhaps some of the nonsense of the court’s previous rulings could be overturned. Thinking of United Citizen, etc. ...

February 13, 2016, 4:04 pm, 1608404

Samsung is warning customers about discussing personal information in front of their smart television set.

The warning applies to TV viewers who control their Samsung Smart TV using its voice activation feature.

When the feature is active, such TV sets “listen” to what is said and may share what ...

February 13, 2016, 3:34 pm, 1608402
Singapore's $10,000 bill, worth around US$7500, shares title to world's largest value banknote with Brunei's $10,000
Peter Sands has adeptly made the case for eliminating ...

February 13, 2016, 2:04 pm, 1608398

February 13, 2016, 1:34 pm, 1608397

|Peter Boettke|

Israel Kirzner was born February 13th 1930.*

*Happy Birthday to Gordon Tullock as well, who was born on February 13th 1922.

February 13, 2016, 12:04 pm, 1608383

February 13, 2016, 11:33 am, 1608381
The Associated Press reports:

Conan's biggest regret at Harvard? Skipping economics

BOSTON (AP) — Conan O'Brien was a prankster during his Harvard years, but he also credits his success to hard work in the classroom. The late-night TV host spoke to an audience of Harvard University ...

February 13, 2016, 11:03 am, 1608368
The key economic report this week is January housing starts on Wednesday.

For prices, PPI and CPI will be released this week.

From manufacturing, January Industrial Production and the February NY and Philly Fed manufacturing surveys will be released this week.

----- Monday, February 15th -----
All ...

February 13, 2016, 10:04 am, 1608367
(February 13, 2016 09:02 AM, by Emily Skarbek) Tim Besley's inaugural lecture as the W. Arthur Lewis Professor of Development Economics at LSE can best be summed up as drawing attention to the rise and importance of political economy for understanding questions of economic development. A brief... (0 COMMENTS)

February 13, 2016, 8:04 am, 1608357

A 3-minute introduction to the effect of geography on economic growth drawing on some of Jeff Sach’s classic works. Includes some surprising facts about continents and coastlines!

This video is from our Principles of Macroeconomics course. We cover the multiple ways in which geography can influence growth in more depth in ...

February 13, 2016, 8:04 am, 1608356
(Don Boudreaux)

… is from page 204 of the 1978 collection, edited by Eric Mack, of Auberon Herbert’s essays, The Right and ...

February 13, 2016, 8:04 am, 1608355
You heard it here first. And before you laugh see that I pretty much nailed New Hampshire in the post and comments Christie is Done. But Wow! What a Parting Shot! where I only made two real mistakes. I overestimated Carson’s numbers and slightly underestimated Bush’s. So this is a ...

February 13, 2016, 7:34 am, 1608352

"Nano impressions": very short but very cool.

February 13, 2016, 7:34 am, 1608351

"Looms" has a double meaning. Dean may have meant well, and the process may have gotten out of control, far beyond want he wanted, but it beganonhis watch.

February 13, 2016, 6:35 am, 1608346
● Postcapitalism: A Guide to Our Future By Paul Mason Review via The Guardian Mason, like Marx, believes that capitalism will collapse under the weight of its own internal contradictions. These include unsustainable levels of debt on the part of both individuals and nations (“2008 was the tremor in advance ...

February 13, 2016, 5:34 am, 1608345

". . . while time and metropolitan expansion have shrunk OldFlorida, there's still some Old Dixie left to find."

February 13, 2016, 5:33 am, 1608344

(p. 1) A hellbent quest for authenticity produced some indelible on-set moments for Alejandro G. Iñárritu as he directed "The Revenant," his two-and-a-half-hour opus of death, love and improvised surgery in the American West of the 1820s.

. . .

(p. 20) There were ...

February 13, 2016, 4:04 am, 1608341

Russian mammoth ivory exports have been increasing steadily, averaging approximately 17 tonnes per year for 1991-2000 and averaging 60 tonnes per year for 2001-2013.

It is estimated that the mammoth ivory beneath the tundra has the potential to cover several hundred years’ worth of current elephant ivory sales.

That is

February 13, 2016, 3:03 am, 1608337

February 13, 2016, 2:44 am, 1608333
It has been claimed that recessions as a result of a financial crisis tend to last longer than normal recessions. This column asks whether early intervention to help distressed banks during financial crises is effective in mitigating the consequences of financial distress. The evidence suggests that decisive and early recapitalisation ...

February 13, 2016, 2:44 am, 1608335
Not everybody agrees that the Greek crisis means the EU needs more integration. This column, from the German Council of Economic Experts, argues that for as long as EZ members are unwilling to transfer national sovereignty over economic and financial policy to the European level, all reform proposals must withstand ...

February 13, 2016, 2:44 am, 1608336
The Eurozone’s ‘Banking Union’ created a system of banking supervision and a common institution to restructure troubled banks. There remain two issues, however, that need to be addressed:  banks are holding too much debt of their own sovereign, and deposit insurance is only backstopped at the national level. This column ...

February 13, 2016, 2:44 am, 1608334
The Eurozone is more crisis-prone than other major currency areas. This column suggests that due to its hybrid structure, the EZ is likely to remain crisis-prone in the near future. A main challenge is the specific insolvency risk to which the member states are exposed, which in the longer term ...

February 13, 2016, 1:34 am, 1608332

I'm just throwing this out there. Read at your own risk. I don't know what I'm talking about (even more than usual). I'm just thinking out loud, and being ornery. I will explain where I'm coming from after I've made my point.

There's a difference between "strategic complementarity" and "positive externalities". ...

February 13, 2016, 12:04 am, 1608323

I haven’t read through this paper (pdf) yet, but it seems quite important and here is the abstract:

For decades, migration economics has stressed the effects of migration restrictions on income distribution in the host country. Recently the literature has taken a new direction by estimating the costs of ...