Economics Roundtable

Technical Problems 3/9/15

The website was down several hours today, 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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March 29, 2015, 12:04 pm, 1447256
(Don Boudreaux)

This Wall Street Journal report on elections in Nigeria features this photo of voters holding their “new electoral cards.”  This photo reminds me of the many photos of Iraqis who have voted displaying their purple ...

March 29, 2015, 11:03 am, 1447236

On Friday I visited the University of Alberta in Edmonton, where falling oil prices have brought a record provincial budget deficit despite aggressive tax increases and spending cuts. Here I pass along some of what I learned about how the plunge in oil prices is affecting Alberta’s oil ...

March 29, 2015, 10:35 am, 1447235
US personal consumption spending for February is projected to rise 0.3% vs. the previous month in tomorrow’s update (Mar. 30), based on The Capital Spectator’s median point forecast for several econometric estimates. The prediction reflects a moderate rebound after January’s 0.2% decline. Three estimates based on recent surveys of economists ...

March 29, 2015, 9:33 am, 1447231
A friend points me to this article in The Economistabout the economics of skyscrapers. Lots of good food for thought for micro and macro classes.

March 29, 2015, 9:33 am, 1447230
I am a 1987 graduate of the LSE. In less than two months, I return to the LSE to see my friends there and to give several lectures. One will be a public lecture where I discuss the big themes of my China research. Most of this research is ...

March 29, 2015, 8:35 am, 1447205

Tyler Cowen argues against (pdf) Elizabeth Anderson's view (pdf) that capitalist bosses exert oppressive power over workers and, implicitly, against my view that capitalist work is alienating. This, I suspect , is one of the many issues in the social sciences where ...

March 29, 2015, 8:05 am, 1447204

The problem is that Mr. Tsipras has not convinced his creditors that he is serious about reform or that his team is remotely on top of the detail. He needs a game-changer. This should, indeed, be a rupture — but with his left faction, not his creditors.

That is

March 29, 2015, 8:04 am, 1447203
(Don Boudreaux)

… is from page 5 of Burt and Anita Folsom’s 2014 volume, Uncle Sam Can’t Count; here they are discussing Uncle Sam’s early-19th-century infrastructure project popularly known as “the National Road - a 620-mile- (1,000km-) long road extending westward from Cumberland, Maryland to Vandalia, Illinois (footnotes excluded):

Because the ...

March 29, 2015, 7:33 am, 1447201

March 29, 2015, 6:04 am, 1447170
My regular column is available to subscribers on This is an excerpt. A big fat zero. No inflation at all. Though it is not guaranteed, a run of deflation – prices lower than a year earlier – seems...

March 29, 2015, 5:33 am, 1447169

"So you have this current generation of young executives, andthey're not particularly interested in walking around slowly."

March 29, 2015, 5:24 am, 1447168

Photo Credit: Tulane Public Relations || James Carville wants to be “reincarnated” as the bond market, to scare everyone ...

March 29, 2015, 5:03 am, 1447123

March 29, 2015, 4:04 am, 1447122
FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND AND FEDERAL DISABILITY INSURANCE TRUST FUND (c) With respect to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund (hereinafter in this title called the “Trust Funds”) there is hereby created a body to be known as ...

March 29, 2015, 2:05 am, 1447094

Paul Krugman has had a few posts on this question, most recently this one, the first one here.  Krugman is right in asserting a major role for air conditioning, but there is a subtle framing point which is sometimes neglected.  The most on-point study is

March 29, 2015, 1:23 am, 1447093
Paul Krugman says yes and yes:

The rise of the US sunbelt can be understood largely as a response to the emergence of widespread air conditioning, which made places that are warm in the winter attractive despite humid, muggy summers. It’s a gradual, long-drawn-out ...

March 28, 2015, 10:04 pm, 1447077
(March 28, 2015 10:08 PM, by David Henderson) The prudent man, claims Roberts, does not smoke, is "physically active and keeps his weight under control," and "works hard and avoids debt." On debt, I must part company. It was by taking on what seemed like a massive debt... (0 COMMENTS)

March 28, 2015, 9:33 pm, 1447076
Echoing statements I have made many times, PIMCO says the single currency area must become a "United States of Europe" in order to secure its future.

Please consider Eurozone can't survive in current form, says PIMCO.

The eurozone is "untenable" in its current form and cannot ...

March 28, 2015, 9:33 pm, 1447075
On Thursday night, I gave an after dinner talk for a group of NBER economists. My talk focused on the impact of climate change on urban economic growth and urban quality of life. I argued that urbanization and the system of cities will together greatly help us to adapt to ...

March 28, 2015, 7:03 pm, 1447052

Paul Krugman:

Unreal Keynesians: Brad DeLong points me to Lars Syll declaring that I am not a “real Keynesian”, because I use equilibrium models and don’t emphasize the instability of expectations. ...

I don’t care whether Hicksian IS-LM is Keynesian in the sense that Keynes himself ...

March 28, 2015, 7:03 pm, 1447051

Some people would have you believe the impact of a minimum wage hike on employment is known to be large and negative. A cursory acquaintance with the literature helps in immunizing one (if one believes in vaccines and the like) against falling for such assertions.

The meta-analysis of Doucouliagos, Hristos, ...

March 28, 2015, 6:04 pm, 1447048

In 2009 Canadian economist Ross McKitrick was asked by a journalist for his thoughts on the importance of the nitwitery known as Earth Hour. Here is his excellent response (my emphasis):

I abhor Earth Hour. Abundant, cheap ...

March 28, 2015, 5:33 pm, 1447047
Here's a conundrum. Many commentators have been trying to puzzle out why stocks have been continually hitting new highs at the same time that bond yields have been hitting new ...

March 28, 2015, 5:33 pm, 1447046
The UCLA Daily Bruin sometimes reports polls of its readers' views. While surveys may attract a non-random sample of respondents, note that 66% of UCLA students support water rationing. Note that "water pricing" isn't even included as an option for adapting to drought conditions. A charitable chap ...

March 28, 2015, 5:33 pm, 1447045

In 2009 Canadian economist Ross McKitrick was asked by a journalist for his thoughts on the importance of the nitwitery known as Earth Hour. Here is his excellent response (my emphasis):

I abhor Earth Hour. Abundant, cheap electricity has been the greatest source of human liberation in the 20th ...

March 28, 2015, 3:34 pm, 1447018

March 28, 2015, 3:23 pm, 1447017

Below is the wide-ranging interview L. Randall Wray gave to EKO – Público TV in Spain as part of the launch of the Spanish edition of his Modern Money Primer (questions in Spanish):

March 28, 2015, 3:03 pm, 1447002
The key report this week is the March employment report on Friday.

Other key indicators includethe February Personal Income and Outlays report on Monday, March ISM manufacturing index also on Wednesday,March vehicle sales on Wednesday, and the February Trade Deficit on Thursday.

Also, Reis will release their quarterly ...

March 28, 2015, 2:44 pm, 1447001

Is the foreclosure crisis over? Yes and no. Since 2007, about six million homes have been sold at foreclosure sales (Foreclosures Public Data Summary Jan 2015). Today, about one million homes are still somewhere in the foreclosure process. Homeowners behind in their ...

March 28, 2015, 2:05 pm, 1446999

March 28, 2015, 1:33 pm, 1446997
On the lighter side, in the March 28, 2015 Dilbert, Wally becomes the new chief economist.

Wally: "The exchange rate on derivatives will trigger a bubble in monetary policy and deflate the Yen."

I like the phrase ...

March 28, 2015, 12:04 pm, 1446943

NC1-TV in Rapid City, SD is reporting in the video above that:

Changes are coming for workers at South Dakota’s six public universities. The schools are reigning in hiring and cutting back hours and services as a result of ...

March 28, 2015, 11:33 am, 1446941

NC1-TV in Rapid City, SD is reporting in the video above that:

Changes are coming for workers at South Dakota’s six public universities. The schools are reigning in hiring and cutting back hours and services as a result of the new $8.50 minimum wage that voters approved in November. ...

March 28, 2015, 11:03 am, 1446900
This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for March 2015.

Changes and comments from surferdude808:

Update on the Unofficial Problem Bank List for March 2015. During the month, the list fell ...

March 28, 2015, 10:04 am, 1446896
(March 28, 2015 09:22 AM, by Scott Sumner) When I moved to Boston in 1982, no one talked about the declining share of national income going to labor. Or increasing income inequality. Now these are the hottest topics in economics. Much of the discussion seems to implicitly suggest... (0 COMMENTS)

March 28, 2015, 10:04 am, 1446895
(Don Boudreaux)

… is from pages 206 of the 1993 Fox & Wilkes re-issue of Rose Wilder Lane’s inspiring 1943 volume, The Discovery of Freedom (original emphasis):

Stupid men believe that force can improve other men’s morals; they want force to stop men’s drinking, or smoking, or gambling.  Superstition clouds ...

March 28, 2015, 10:04 am, 1446894
(Don Boudreaux)

One of the best books that I’ve read lately is Alex Epstein’s 2014 volume, The Moral Case for Fossil Fuels.  (My colleague Bryan Caplan shares my enthusiastic assessment.)

This short piece of mine in today’s Wall Street Journal is in the same spirit as Alex’s scholarship.  A slice:

Richard ...

March 28, 2015, 9:33 am, 1446893

March 28, 2015, 9:03 am, 1446869

FRANKFURT—German Finance Minister Wolfgang Schäuble said it isn’t fair for international finance officials to support European Central Bank quantitative easing, while at the same time criticizing Germany’s current account surplus, given that the former causes the latter to rise.

Speaking in Frankfurt, Mr. Schäuble said that “the immediate consequence” of QE ...

March 28, 2015, 9:03 am, 1446868
Stefan Ingves, governor of Sweden’s central bank, says agreement on a reappraisal of how regulators should treat government bonds will be hard to reach. Bloomberg News

A ...

March 28, 2015, 9:03 am, 1446872

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, March 27, 2015:

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Derby’s Take: Lockhart Explains How He Became Fed’s “Bellwether” Lockhart Says Dollar Rise Becoming ...

March 28, 2015, 9:03 am, 1446871
U.S. economic output expanded at a 2.2% seasonally adjusted annual rate in the final months of 2014, the Commerce Department said Friday. Here's a quick look at the report.

March 28, 2015, 9:03 am, 1446870
Chinese President Xi Jingping and Singapore Finance Minister Tharman Shanmugaratnam in Beijing at a signing ceremony for the Asian Infrastructure Investment Bank, last October. Getty Images

Are ...

March 28, 2015, 9:03 am, 1446863

Of the many battles Ukraine and Russia are fighting, an argument about whether to call the $3 billion Kiev owes Moscow at the end of this year “official” or “private” debt may seem insignificant.

March 28, 2015, 9:03 am, 1446864

NEW YORK–Federal Reserve Chairwoman Janet Yellen said Friday that overseas central bank stimulus is mixed but ultimately positive for the U.S. economy.

Mr. Yellen, speaking to a conference at the Federal Reserve Bank of San Francisco, said in response to an audience question that it’s true that stimulus in the ...

March 28, 2015, 9:03 am, 1446865
The March payroll report dominates next week’s economic data. Here's what to watch.

March 28, 2015, 9:03 am, 1446866
Here are five key quotes from Federal Reserve Chairwoman Janet Yellen's remarks to a conference at the San Francisco Fed.

March 28, 2015, 9:03 am, 1446867
North Dakota’s jobless rate rose to 2.9% in February from 2.8% in what the Bureau of Labor Statistics called “the only significant over-the-month rate increase” for any state. 

March 28, 2015, 9:03 am, 1446862

March 28, 2015, 8:35 am, 1446861
● Invest with the Fed: Maximizing Portfolio Performance by Following Federal Reserve Policy By Robert R. Johnson, et al. Essay by co-author (Robert R. Johnson) via ValueWalk In a recently published McGraw-Hill book – Invest with the Fed – my co-authors, Gerald R. Jensen from Northern Illinois University, Luis-Garcia-Feijoo from ...

March 28, 2015, 8:05 am, 1446860

Hat tip: Daniel Altman.

March 28, 2015, 7:03 am, 1446845

March 28, 2015, 5:33 am, 1446844

When hell freezes over I'll consider riding on it.

. . . riders will plummet 81 degrees at 95 mph toward the ground . . .

March 28, 2015, 5:33 am, 1446843

"The Brooklyn Nets went all-in on a blockbuster trade with the Celtics — and it's a total disaster 2 years later".

March 28, 2015, 5:33 am, 1446842

(p. A11) A higher minimum wage raises wages of low-wage workers, and even though most evidence points to job losses from higher minimum wages, the evidence doesn't point to widespread employment declines. Thus, consistent with a recent Congressional Budget Office report, many more low-wage workers will get ...

March 28, 2015, 5:03 am, 1446837

Of the many battles Ukraine and Russia are fighting, an argument about whether to call the $3 billion Kiev owes Moscow at the end of this year “official” or “private” debt may seem insignificant.

March 28, 2015, 4:05 am, 1446836

Advancement in China’s school system was highly competitive, and the odds of reaching the top of the educational ladder were very steep.  Of the 32.9 million children who entered primary school in 1965, only 9 percent could expect to enter junior high school.  Only 15 percent of junior high school ...

March 28, 2015, 2:45 am, 1446818

The Little Ice Age is generally seen as a major event in European history. Analysing a variety of recent weather reconstructions, this column finds that European weather appears constant from the Middle Ages until 1900, and that events like the freezing of the Thames and the disappearance of English vineyards ...

March 28, 2015, 2:05 am, 1446816

Edward Hugh writes:

So, what do you do about the problem of secular stagnation? Again here there is divergence of opinion. Some still seek to treat the phenomenon as if it were a variant of the liquidity trap issue. Most notable here is Paul Krugman, who continues to hope ...