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.


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 .


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.


EconModel

The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.


RSS Feed

- Recent Entries


June 29, 2015, 10:44 pm, 1498964
A


June 29, 2015, 10:34 pm, 1498963
Teaser:


June 29, 2015, 9:33 pm, 1498955

1. Chart of the Day I (above). The median sales price of an existing home in May at $228,700 was just $1,700 (and 0.74%) below the all-time peak price of $230,400 in July 2006.

2. Chart ...


June 29, 2015, 9:03 pm, 1498931

British consumers are feeling more upbeat than they have in the last decade and a half, so concludes one new survey.

The survey, due to be released Tuesday by market-research firm GfK Group, showed consumers were more optimistic about both their personal financial situation and the general economy in June than ...


June 29, 2015, 9:03 pm, 1498930

University of Chicago Professor Anil Kashyap has a helpful summary of the Greek financial crisis.


June 29, 2015, 9:03 pm, 1498929
Tuesday:
• At 9:00 AM ET, S&P/Case-Shiller House Price Index for April. Although this is the April report, it is really a 3 month average of February, March and April prices. The consensus is for a 5.4% year-over-year increase in the Comp 20 index for April. The


June 29, 2015, 8:44 pm, 1498928
A


June 29, 2015, 8:44 pm, 1498927
A


June 29, 2015, 7:33 pm, 1498923

June 29, 2015, 7:33 pm, 1498922
An Opinion Piece in the LA Times argues that the NSF should do a better job prioritizing its strategic investments in basic science. Here are some direct quotes:

"Do the mandarins of the social sciences really believe that a study of depictions of animals in National Geographic ...


June 29, 2015, 7:03 pm, 1498882

Tim Duy:

Events Continue to Conspire Against the Fed, by Tim Duy: Federal Reserve policymakers just can't catch a break lately. Riding on the back of strong data in the second half of last year, they were positioning themselves to declare victory and begin the process of policy normalization, ...


June 29, 2015, 7:03 pm, 1498881
Nothing to add on Greece right now, so here is another forecast for June auto sales.

From WardsAuto: Forecast: SAAR Expected to Remain Above 17 Million in June

A WardsAuto forecast calls for U.S. automakers to deliver 1.48 million light vehicles this month.
...
The report puts the ...


June 29, 2015, 6:04 pm, 1498880
(June 29, 2015 07:33 PM, by David Henderson) In following the Greek economic crisis, I have very little to add that has not been said. But one economist who said it well three and a half years ago is Australian economist and German native Wolfgang Kasper. His Econlib... (0 COMMENTS)


June 29, 2015, 6:04 pm, 1498877

The deadline for a nuclear deal with Iran is fast approaching while rumors swirl of a possible extension. At the same time, Iran has made clear its anti-American agenda and its designs for the Middle East. It has neither stopped its support of terrorist proxies such as Hezbollah, nor has ...


June 29, 2015, 6:04 pm, 1498878

Democrats do better electorally where it’s crowded, Republicans where it’s less so. The greater the population density, the bluer a state, region, or city. And that’s too bad, argue Michael Hendrix and Andrew Evans in National Affairs, because “the result of this electoral reality is that Republicans rarely control the ...


June 29, 2015, 6:04 pm, 1498876

Congratulations to the gay-rights community for its victory in Obergefell v. Hodges. Anyone familiar with liberty’s history in our country knew that the American people, sooner or later, would reach this point. But with unprecedented speed (President Obama campaigned in 2008 against gay marriage), gays won a sweeping right to ...


June 29, 2015, 6:04 pm, 1498879

Germany – and its chancellor Angela Merkel – deserve credit for the continuation of the EU’s sanctions regime against Russia. But Germany happens also to be home to the energy giant E.ON, which recently signed a (non-binding) memorandum, together with Russia’s Gazprom, Austria’s OMV, and Shell from the UK and ...


June 29, 2015, 6:04 pm, 1498872

Intergenerational mobility provides a measure of how well children are faring relative to their parents. What are the chances that a child born to parents in the bottom quintile will move to the top of the income distribution? Is the child in a higher income quintile relative to the parents, ...


June 29, 2015, 6:04 pm, 1498873

Read the PDF

How proud are Americans of their country? As Independence Day approaches, this AEI Public Opinion Study focuses on patriotism in the United States, examining Americans’ self-professed patriotism, how people describe others’ patriotism, and reasons people are proud of the US. This study also looks at how patriotism ...


June 29, 2015, 6:04 pm, 1498874

As we prepare to celebrate Independence Day with songs of national celebration, flags waving in the breeze, parades, and family gatherings, polls reveal Americans’ strong love of country.

For more polls on patriotism, see the AEI Public Opinion Study.

Infographic by Olivier Ballou ...


June 29, 2015, 6:04 pm, 1498875


At AEI’s recent event, “The American dream in crisis,” Robert Putnam, Charles Murray, and William Julius Wilson discussed problems brought to light in Putnam’s new book, “Our Kids: The American Dream in Crisis.” The book expounds upon several alarming trends – the widening ...


June 29, 2015, 6:04 pm, 1498871

Brill explains how federally sanctioned state Medicaid provider taxes operate and affect federal Medicaid spending. He proposes that Congress prohibit these taxes and either put the federal savings back into Medicaid or use them to reduce federal healthcare taxes.

This article will be posted on Monday, July 13. Tax Notes subscribers ...


June 29, 2015, 5:03 pm, 1498822

Last Friday, the Supreme Court issued a ruling in a 5-4 decision of the Obergefell v. Hodges case making same-sex marriage legal in all 50 states and territories of the United States. The ruling has allowed same-sex couples to have the same tax filing options as opposite-sex couples. ...


June 29, 2015, 5:03 pm, 1498821

Taking money from the rich and giving it to those less well-off may not generate the stimulative boost to the economy many economists and policy makers currently believe.

New research from the San Francisco Fed, released Monday, takes stock of so-called redistributive economic policies. Simply put, these strategies take money ...


June 29, 2015, 5:03 pm, 1498820
Former Dallas Federal Reserve Bank President and CEO Richard Fisher, who stepped down from his post in March, is joining Barclays as a senior adviser. SLAVEN ...


June 29, 2015, 4:44 pm, 1498819
A


June 29, 2015, 4:04 pm, 1498815
Tomorrow, in addition to the predictable ruling in the EPA/mercury-emissions case, and in addition to a declaration of a constitutional right to same-sex marriage—another 5-4 ruling, in Obergefell v. Hodges—the Court will issue an opinion in Arizona State Legislature v. Arizona Independent Redistricting Commission, a case that could directly implicate continued Republican control ...


June 29, 2015, 3:34 pm, 1498809
Marty Feldstein has a very interesting opinion piece on Project Syndicate. His main point is that micro distortions from social programs (and taxes, labor laws, regulations etc.) are leading many people not to work, and is well stated.

An introductory paragraph poses a puzzle to me, however,


June 29, 2015, 3:33 pm, 1498808

... for the Western Economic Association International 90th Annual Conference (June 28- July 2, 2015); but my co-authors are:

Program Addenda (6/25/15) |Preliminary Program (5/20/15) | Participants Directory (5/20/15)

Session Information & Instructions|Housing Information| General Information
Participating Allied Societies|Exhibitor ...


June 29, 2015, 3:23 pm, 1498807

According to the Atlanta Fed's Wage Growth Tracker, a new series constructed using data from the Current Population Survey, the median increase in wages for individuals working in May 2014 and May 2015 was 3.3 percent (reported as a three-month average).

Wage growth by this measure was essentially ...


June 29, 2015, 3:03 pm, 1498753
A woman holds a plackard reading ‘Yes to Europe–no to austerity, no to drachma’ during a pro-European demonstration in front of the Greek parliament in Athens this week.


June 29, 2015, 3:03 pm, 1498752

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, June 26, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Mixed Inflation Readings Complicate Fed’s Confidence Hurdle Tarullo: Something’s Changed in the Bond ...


June 29, 2015, 3:03 pm, 1498751
A key labor market indicator–the labor-force participation rate–has been on the decline in the U.S., unlike in other countries. A Walmart employee in Miami stocks the shelves.


June 29, 2015, 3:03 pm, 1498747
U.S. investors face a short workweek because the financial markets will close Friday to observe the July 4th holiday. But before outdoor grills are fired up and fireworks explode, economy-watchers will get the employment report on Thursday. Those figures, along with new data on wages, home prices, manufacturing and car ...


June 29, 2015, 3:03 pm, 1498749
An M/I Homes house under construction in a Dallas suburb in June. Kris Hudson/The Wall Street Journal

The national supply of homes for sale is getting squeezed ...


June 29, 2015, 3:03 pm, 1498750
Kansas City Fed President Esther George, shown in April, touted in a speech Thursday what she hoped would be a collaborative process to further modernize the way money is ...


June 29, 2015, 3:03 pm, 1498746

WASHINGTON–U.S. Treasury Secretary Jacob Lew urged the head of the International Monetary Fund and his German and French counterparts Saturday to continue to seek an emergency financing deal for Greece despite a breakdown in negotiations that is pushing the debt-beleaguered country deeper into crisis.

Just hours after Greek authorities said ...


June 29, 2015, 3:03 pm, 1498748
U.S. Federal Reserve Chairwoman Janet Yellen met with two Senators in April Yin Bogu/Xinhua//Zuma Press

After a flurry of Capitol Hill meetings in March, Federal Reserve ...


June 29, 2015, 3:03 pm, 1498745

The fast-developing situation in Greece and the eurozone could spark volatility in financial markets and the global economy. The Federal Reserve, among others, is watching for fallout from overseas that could affect the U.S.

Here is a roundup of recent statements by top U.S. officials, including policy makers at the Fed, ...


June 29, 2015, 3:03 pm, 1498743
Agence France-Presse/Getty Images

China’s central bank over the weekend pulled a surprise move, cutting the benchmark lending and deposit rates and reducing the amount of funds some banks are required to hold in reserve. The last time ...


June 29, 2015, 3:03 pm, 1498744
An investor walks by the screen displaying stock prices in a brokerage house in Hangzhou in eastern China’s Zhejiang province last Friday. Associated Press

China’s central bank ...


June 29, 2015, 3:03 pm, 1498742

The Federal Reserve should wait until the middle of 2016 to start raising short-term interest rates from near zero to ensure the economy is on a firmer footing and inflation is returning to the central bank’s 2% target after undershooting it for more than three years.

That’s the message from a ...


June 29, 2015, 3:03 pm, 1498741

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, June 29, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Blackstone’s Take: A Tale of Two Cities: Basel and Athens Greece Orders Banks Closed, Imposes ...


June 29, 2015, 3:03 pm, 1498740
Reuters

With Greece on the brink of leaving the eurozone and global financial markets panicked by that prospect, eurozone policy makers can’t have expected favorable reviews ...


June 29, 2015, 3:03 pm, 1498738

Taking money from the rich and giving it to those less well-off may not generate the stimulative boost to the economy many economists and policymakers currently believe.

New research from the San Francisco Fed, released Monday, takes stock of so-called redistributive economic policies. Simply put, these strategies take money from ...


June 29, 2015, 3:03 pm, 1498739

LONDON—Raising interest rates too early could risk another recession in the U.K., the Bank of England’s chief economist Andy Haldane plans to say during a speech Tuesday.

According to a prepared text of the speech, Mr. Haldane plans to argue that the central bank should keep the short-term policy rate at ...


June 29, 2015, 3:03 pm, 1498737

Bart Hobijn and Alexander Nussbacher in the SF Fed's Economic Letter:

The Stimulative Effect of Redistribution, by Bart Hobijn and Alexander Nussbacher: The idea of taking from the rich and giving to the poor goes back long before the legend of Robin Hood. This kind of redistribution sounds desirable ...


June 29, 2015, 3:03 pm, 1498736

From Time:

Joseph Stiglitz to Greece’s Creditors: Abandon Austerity Or Face Global Fallout: ... “They have criminal responsibility,” he says of the so-called troika of financial institutions that bailed out the Greek economy in 2010, namely the International Monetary Fund, the European Commission and the European Central Bank. “It’s a ...


June 29, 2015, 3:03 pm, 1498735
Note: I follow several house price indexes (Case-Shiller, CoreLogic, Black Knight, Zillow, FHFA, FNC and more). Note: Black Knight uses the current month closings only (not a three month average like Case-Shiller or a weighted average like CoreLogic), excludes short sales and REOs, and is not seasonally adjusted.

From ...


June 29, 2015, 2:44 pm, 1498734
A


June 29, 2015, 2:44 pm, 1498733
A


June 29, 2015, 2:44 pm, 1498732
A


June 29, 2015, 2:44 pm, 1498731
A


June 29, 2015, 2:05 pm, 1498729

June 29, 2015, 2:05 pm, 1498728

Allison Schrager has a new piece on that topic in Playboy, and with a new (old) idea, here is one part:

Harvard economist Lawrence Katz thinks that when the economy shifts, those who lose out experience “retroactive unemployment” in pursuit of jobs that no longer exist; however, he anticipates ...


June 29, 2015, 1:33 pm, 1498724

Tomorrow, June 30, marks the 214th anniversary of the birth of the great French economist Frédéric Bastiat (born June 30, 1801) whom economist Joseph Schumpeter called the “most brilliant economic journalist who ever lived.” Celebrating Bastiat’s birthday has become an annual tradition at ...


June 29, 2015, 1:03 pm, 1498663

Last week, the Tax Foundation made a trip to Chicago to speak at the Council on State Taxation (COST) and National Conference of State Legislatures (NCSL) Tax Academy Policy Seminar. The event was a great opportunity to meet with state legislators and tax policy professionals from around the country and take part in ...


June 29, 2015, 1:03 pm, 1498662

Switzerland is the latest European country to rule that bitcoin is exempt from value-added tax (VAT), following recent rulings by Spain, Finland, Belgium and other European nations.  The Swiss Federal Tax Administration (FTA) has never taxed bitcoin, but it stated its official position after clarification was requested from a ...


June 29, 2015, 1:03 pm, 1498660

LONDON—Raising interest rates too early could risk another recession in the U.K., the Bank of England’s chief economist Andy Haldane plans to say during a speech Tuesday.

According to a prepared text of the speech, Mr. Haldane plans to argue that the central bank should keep the short-term policy rate at ...


June 29, 2015, 1:03 pm, 1498661
Reuters

With Greece on the brink of leaving the eurozone and global financial markets panicked by that prospect, eurozone policy makers can’t have expected favorable reviews ...


June 29, 2015, 1:03 pm, 1498659

Just say no:

Greece Over the Brink, by Paul Krugman, Commentary, NY Times: It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency....

Leaving a currency union is, however, a much harder ...


June 29, 2015, 1:03 pm, 1498658

Emmanuel Saez:

U.S. income inequality persists amid overall growth in 2014, by Emmanuel Saez, WCEG: Income inequality in the United States grew more acute in 2014, yet the bottom 99 percent of income earners registered the best real income growth (after factoring in inflation) in 15 years. The


June 29, 2015, 12:44 pm, 1498657
A


June 29, 2015, 12:44 pm, 1498656
A


June 29, 2015, 12:44 pm, 1498655
A


June 29, 2015, 12:44 pm, 1498654
A


June 29, 2015, 12:05 pm, 1498651

The main euro Q is whether the problem is Greece (so kicking them out solves problem) or is misaligned exch rates (so someone will be next)

That is from Austan Goolsbee.


June 29, 2015, 12:04 pm, 1498650
(June 29, 2015 10:16 AM, by Scott Sumner) When Americans think about inequality, it is often linked to ethnic differences. Sometimes that's also true in Europe (as with the Roma), but more often the inequality is regional. Perhaps the starkest example lies in Italy, where even in 2007... (1 COMMENTS)


June 29, 2015, 12:04 pm, 1498649
Senior Fellow John Bolton discusses the current state of negotiations with Iran for a nuclear deal on Fox News' ' America's News HQ.'


June 29, 2015, 12:04 pm, 1498648
Fellow Marc Thiessen discusses Hillary Clinton's email scandal on Fox News' 'America's Newsroom'


June 29, 2015, 12:04 pm, 1498647

Tomorrow, June 30, marks the 214th anniversary of the birth of the great French economist Frédéric Bastiat (born June 30, 1801) whom economist Joseph Schumpeter called the “most brilliant economic journalist who ever lived.” Celebrating Bastiat’s birthday has become an annual tradition at ...


June 29, 2015, 11:33 am, 1498645
Reader Reflections on Greece

Reader "AC" pinged me this AM with her accurate assessment of events in Greece. "AC" writes ...

I find strange that no Euro leaders realized that even if Tsipras accepted the deal, his parliament would with almost certainty have rejected it.

European ...


June 29, 2015, 11:03 am, 1498583
From CNBC: Pending home sales rise 0.9% in May, highest level since 2006

Signed contracts to buy existing homes, so-called pending home sales, rose just 0.9 percent in May from April, according to the National Association of Realtors, after a downward revision to April's reading. That is slightly lower ...


June 29, 2015, 11:03 am, 1498582
From the Dallas Fed: Texas Manufacturing Activity Still Contracting

Texas factory activity declined again in June, according to business executives responding to the Texas Manufacturing Outlook Survey. The production index, a key measure of state manufacturing conditions, rose to -6.5 but remained in negative territory, suggesting a fourth ...


June 29, 2015, 10:45 am, 1498581
A


June 29, 2015, 10:45 am, 1498580
A


June 29, 2015, 10:45 am, 1498578
A


June 29, 2015, 10:45 am, 1498579
A


June 29, 2015, 10:35 am, 1498577
We’re all backtesters in some degree, but not all backtested strategies are created equal. One of the more common (and dangerous) mistakes is 1) backtesting a strategy based on the historical record; 2) documenting an encouraging performance record; and 3) assuming that you’re done. Rigorous testing, however, requires more. Why? ...


June 29, 2015, 10:04 am, 1498574
(Don Boudreaux)

Commenting on this recent post – a post that argues that there is ...


June 29, 2015, 10:04 am, 1498573

June 29, 2015, 10:04 am, 1498571

Yes, Greek has a ton of debt. Yes, it has a woefully uncompetitive economy. Yes, it continues to avoid supply-side and government reform. But consider the macrosituation, as outlined by AEI’s Desmond Lachman:

Over the past six years, Greece has experienced an economic depression on the scale of that experienced by the ...


June 29, 2015, 10:04 am, 1498570

Ben Wattenberg joined AEI in 1977. He had been a speechwriter to Lyndon Johnson, an adviser to Humbert Humphrey, and a friend and long-time supporter of Senator Henry “Scoop” Jackson. Wattenberg  was one of the great amateur demographers of our time, and he drew vivid portraits of the nation’s ever-changing ...


June 29, 2015, 10:04 am, 1498572

Key Points

Apart from the controversial recognition of Castro’s dictatorship in Cuba, the Obama administration has largely ignored Latin American relations, indifferent to the economic decline and instability in several countries.Washington’s disengagement has allowed China to establish an economic foothold in the region using predatory business practices and exploitive projects.It’s not ...


June 29, 2015, 10:04 am, 1498569

Via Bloomberg:

Prices on Puerto Rico’s newest general obligations sank to record lows after Governor Alejandro Garcia Padilla said investors should be prepared to sacrifice if they want the cash-strapped island’s economy to grow. … With two days left in Puerto Rico’s fiscal year, the commonwealth is struggling to pass a ...


June 29, 2015, 10:04 am, 1498568

Over time, a Greek exit could impose significant economic and geopolitical costs on the United States. This could occur through the following three channels. Again, from AEI’s Desmond Lachman:

1.) In the immediate aftermath of a Greek exit, one must expect a significant further depreciation of the Euro as the ECB took ...


June 29, 2015, 9:33 am, 1498565

At the third plenary session of China’s 18th Central Committee (the “Third Plenum”) in November 2013, China’s leaders adopted a broad national reform strategy (see here for a scorecard of the economic plans). Included were the liberalization of the country’s government-controlled financial system and the internationalization of its ...


June 29, 2015, 9:03 am, 1498500

The Wall Street Journal’s Daily Report on Global Central Banks for Monday, June 29, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Blackstone’s Take: A Tale of Two Cities: Basel and Athens Greece Orders Banks Closed, Imposes ...


June 29, 2015, 9:03 am, 1498499


June 29, 2015, 8:44 am, 1498497
A


June 29, 2015, 8:44 am, 1498498
A


June 29, 2015, 8:44 am, 1498496
A


June 29, 2015, 8:05 am, 1498493

The Chinese stock market is tanking again, down more than seven percent today, seventeen percent or so over the last three days.

Puerto Rico isn’t going to pay up, and they announced this through the NYT.

Utrecht is going to experiment with a basic income scheme.


June 29, 2015, 8:04 am, 1498492
(Don Boudreaux)

… is from page 34 of the 2009 collection of some essays by the Italian jurist and political philosopher


June 29, 2015, 7:33 am, 1498489

Not a joke, (Follow the link in the piece.)

I recommend enjoying skeptical commentary--while you still can:

James Lileks:

For example: the only reason Apple pulled the Civil War apps from the store was fear of the internet - specifically, fear of the worst part of the ...


June 29, 2015, 7:33 am, 1498488

I imagine this Quora discussion will get very, very long.


June 29, 2015, 7:33 am, 1498486

Troy Camplin makes an excellent point:

Every economist will tell you about the benefits from specialization. We have known about that since Adam Smith wroteThe Wealth of Nations. But for some reason, this knowledge is thrown out when it comes to specialization in academia.

I am ...


June 29, 2015, 7:33 am, 1498485

I hope Matt Ridley's life insurance is paid up because this piece will probably make some of the always-right-thinking, consensus-enshrining people very angry.

(But, if he's lucky, maybe they'll completely ignore it, as they sometimes do with careful, modest, well-reasoned arguments against their position.)

I'd agree with the commenter who ...


June 29, 2015, 7:33 am, 1498487

Kevin D. Williamson still, yet again:

You have to credit the Left: Its strategy is deft. If you can make enough noise that sounds approximately like a moral crisis, then you can in effect create a moral crisis. Never mind that the underlying argument — “Something bad ...


June 29, 2015, 7:33 am, 1498484
Gara Afonso and João Santos



First in a two-part series
Did the Dodd-Frank Act end ‘‘too-big-to-fail’’ (TBTF)? In this series of two posts, we look at ...


June 29, 2015, 7:03 am, 1498437

The Federal Reserve should wait until the middle of 2016 to start raising short-term interest rates from near zero to ensure the economy is on a firmer footing and inflation is returning to the central bank’s 2% target after undershooting it for more than three years.

That’s the message from a ...


June 29, 2015, 6:44 am, 1498436

Science writer and author Matt Ridley discusses climate change with EconTalk host Russ Roberts. Based on his reading of the scientific evidence, Ridley describes himself as a "lukewarmer." While Ridley agrees that humans have made the climate warmer, he argues that the impact is small ...


June 29, 2015, 6:35 am, 1498435
● Greece is on the brink… again still, but this time it’s far more acute as the government closes banks and imposes capital controls, pushing the beleaguered nation closer to default and a hasty exit from the euro… ● Meanwhile, back in the US, the University of Michigan’s Consumer Sentiment Index ...


June 29, 2015, 5:33 am, 1498433

Megan McArdle discusses a paper byDaron Acemoglu, James Robinson, and Thierry Verdier.

I'd just add that at least up until recently we were also essentially paying for the defense of those happy, happy Scandanavians.


June 29, 2015, 5:03 am, 1498404

June 29, 2015, 4:45 am, 1498403
A


June 29, 2015, 4:45 am, 1498402
A


June 29, 2015, 2:44 am, 1498353

Japanese firms have been struggling with the yen’s volatility ever since the peg was dropped in 1973. This column, based on a recent survey of Japanese firms, argues that many firms have managed their exchange rate exposure by using operational and financial hedging strategies. It also finds that firms employing ...


June 29, 2015, 2:05 am, 1498352

If you put Greek total debt in perspective, it’s smaller than that of many other EU nations, including Portugal.  And that is as a percentage of gdp.  Furthermore most of the remaining Greek debt is held by public sector institutions.

The difference of course is that Greece is being ...


June 29, 2015, 1:33 am, 1498351
Diane Coyle has a nice review of Richard Thaler's new book,Misbehaving. Diane's review is, for the most part, appropriately laudatory. But she does voice a concern that I share. Here is Diane...


June 29, 2015, 1:33 am, 1498350
After the ECB shut off ELA, prime minister Alexis Tsipras imposed capital controls while blaming the ECB just as I predicted.

Of course, that was an easy prediction. Yet, even at the last moment, many did not believe it would come to this.

Let's tune into the


June 29, 2015, 1:33 am, 1498349
Four years ago I thought odds of an eventual Grexit were nearly certain. Some people still don't believe so, while others are just beginning to understand the obvious.

Former Pimco Co-CEO El-Erian Sees 85% Grexit Odds With ‘Massive’ Contraction Coming.

Greece is heading for a “massive ...


June 29, 2015, 1:33 am, 1498348

Here are three reasons that market-determined wages for unskilled, low-skilled and limited-experienced workers are superior to government-mandated minimum wages.

Market-determined wages: 1) are based on the unique market forces of supply and demand for entry-level workers that prevail in an individual geographical location and ...


June 29, 2015, 12:34 am, 1498317
Teaser:

Next ...


June 29, 2015, 12:04 am, 1498316

Here are three reasons that market-determined wages for unskilled, low-skilled and limited-experienced workers are superior to government-mandated minimum wages.

Market-determined wages: 1) are based on the unique market forces of supply and demand for entry-level workers that prevail in an individual geographical location and ...


June 28, 2015, 11:03 pm, 1498303
An investor walks by the screen displaying stock prices in a brokerage house in Hangzhou in eastern China’s Zhejiang province last Friday. Associated Press

China’s central bank ...


June 28, 2015, 11:03 pm, 1498302
Agence France-Presse/Getty Images

China’s central bank over the weekend pulled a surprise move, cutting the benchmark lending and deposit rates and reducing the amount of funds some banks are required to hold in reserve. The last time ...


June 28, 2015, 11:03 pm, 1498301
From the NY Times: Puerto Rico’s Governor Says Island’s Debts Are ‘Not Payable’

Puerto Rico’s governor, saying he needs to pull the island out of a “death spiral,” has concluded that the commonwealth cannot pay its roughly $72 billion in debts, an admission that will probably have wide-reaching financial ...


June 28, 2015, 9:34 pm, 1498298

Two identical countries A and B share a common (paper) currency C. The demand for currency is 5% of annual (Nominal) GDP.

Suppose B decides to quit the currency union and print its own currency. There are two different ways it could do this:

1. Convert and destroy. The people in B ...


June 28, 2015, 9:03 pm, 1498296

The fast-developing situation in Greece and the eurozone could spark volatility in financial markets and the global economy. The Federal Reserve, among others, is watching for fallout from overseas that could affect the U.S.

Here is a roundup of recent statements by top U.S. officials, including policy makers at the Fed, ...


June 28, 2015, 9:03 pm, 1498297

WASHINGTON–U.S. Treasury Secretary Jacob Lew urged the head of the International Monetary Fund and his German and French counterparts Saturday to continue to seek an emergency financing deal for Greece despite a breakdown in negotiations that is pushing the debt-beleaguered country deeper into crisis.

Just hours after Greek authorities said ...


June 28, 2015, 8:44 pm, 1498295

This weekend’s dramatic events saw the ECB capping emergency assistance to Greece. This column argues that the ECB’s decision is the last of a long string of ECB mistakes in this crisis. Beyond triggering Greece’s Eurozone exit – thus revoking the euro’s irrevocability – it has shattered Eurozone governance and ...


June 28, 2015, 8:34 pm, 1498294

(This is a re-worked section I cut from the bottom of the introductory episode of this fifteen-part serial, on May 17,  at a time when I was more worried about the length of installments than I am now. See if it helps make sense of what you have already ...


June 28, 2015, 7:33 pm, 1498289


June 28, 2015, 6:05 pm, 1498272

June 28, 2015, 5:33 pm, 1498271
Back in 1972, Issac Ehrlich and Gary Becker wrote a very important JPE paper on endogenous probabilities. Consider a simple example of a fire that burns down your house. This event is a random variable that every family fears. The probability of this event is partially under the ...


June 28, 2015, 5:03 pm, 1498264

WASHINGTON–U.S. Treasury Secretary Jacob Lew urged the head of the International Monetary Fund and his German and French counterparts Saturday to continue to seek an emergency financing deal for Greece despite a breakdown in negotiations that is pushing the debt-beleaguered country deeper into crisis.

Just hours after Greek authorities said ...


June 28, 2015, 5:03 pm, 1498263

The fast-developing situation in Greece and the eurozone could spark volatility in financial markets and the global economy. The Federal Reserve, among others, is watching for fallout from overseas that could affect the U.S.

Here is a roundup of recent statements by top U.S. officials, including policy makers at the Fed, ...


June 28, 2015, 4:45 pm, 1498262
A


June 28, 2015, 4:34 pm, 1498261

I honestly haven’t been paying much attention to the latest round of negotiations between Greece and European lenders, but it would appear that things are about to get very, very serious:

ATHENS — Greece will ...


June 28, 2015, 4:05 pm, 1498260

That is a new start-up.  The purpose is to help your “sharing economy” reputation be portable across a number of sites, for instance Airbabn, DogVacay, Uber, Craigslist, and so on.

In my column from yesterday I speculated:

At the moment, one problem with many online ratings is that ...


June 28, 2015, 4:04 pm, 1498259
(June 28, 2015 02:05 PM, by David Henderson) Andrew Oxlade writes: He [Ian Spreadbury] declined to predict the exact trigger but said it was more likely to happen in the next five years rather than 10. There's some pretty serious innumeracy going on here. I'm not sure if... (3 COMMENTS)


June 28, 2015, 2:44 pm, 1498250

The breakdown of negotiations between Greece and the Troika comes as a shock. It is not, however, the end of the game. This column argues that the rupture can serve as a starting point for a new relationship between Greece and its creditors – an approach that does not provide ...


June 28, 2015, 2:34 pm, 1498249
Teaser:

I ...


June 28, 2015, 2:05 pm, 1498246

1. GDP growth of 7% w/profit growth of 0.6%=really bad managers or 2. GDP growth not really 7%. Choose 1 or 2

That is from Christopher Balding.  Let’s not forget that the Greece story may end up as relatively small by comparison.


June 28, 2015, 2:04 pm, 1498245
(June 28, 2015 12:03 PM, by Scott Sumner) If you travel to other countries you might occasionally notice something that you wish the US had. The one I notice most often is good subways. This article caught my eye: Stan Paul, who begins his morning ride to UCLA... (4 COMMENTS)


June 28, 2015, 2:04 pm, 1498244
(Don Boudreaux)

Here’s a letter to a gracious, learned, and smart long-time correspondent whose view ...


June 28, 2015, 1:33 pm, 1498243
Tyler Cowen's Uber Columnmakes several very interesting points. Every time I'm in an Uber car, the driver starts talking about his Uber rating. This rating is some moving average of how his last X riders have rated him. Today, Uber knows this rating for each driver at each ...


June 28, 2015, 1:23 pm, 1498242
So it appears the Eurozone crisis has finally crossed the rubicon. Greece is going to default on Monday and this likely will put in motion its departure from the currency union. The Eurozone as we know it may soon cease to exist.


June 28, 2015, 1:03 pm, 1498231

Branko Milanovic:

Former Finance Minister of Cyprus on the Greek crisis: While on vacations in Greece, I had a chance today (Sunday 28 June) to have a long discussion with Michael Sarris who was Cypriot Minister of Finance between 2005 and 2008 when the Euro was introduced in Cyprus ...


June 28, 2015, 11:33 am, 1498225
I have been wondering when the ECB would finally pull the plug and put a stop to the ELA.

Today, amid an accelerating run on Greek banks, the ECB capped the ELA.

The Guardian has a Live-Update on the crisis.

Here is the key point ...


June 28, 2015, 11:03 am, 1498208

There’ve been some stunning pictures recently sent back from distant parts of our solar system which I wanted to share.

When I was a boy, people could only imagine what a comet actually looks like. Now we know.


June 28, 2015, 11:03 am, 1498207
Some comments from analysts at the Financial Times Alphaville: Greece: bank analysts and eurowatchers on what to expect on Monday

The analysts make good point on Greek banks, and also on the odds of the Greeks voting for more austerity, an excerpt:

"according to recent polls there may ...


June 28, 2015, 10:04 am, 1498202
(Lifted from Robert’s Stochastic Thoughts) by Robert Waldmann Brad DeLong buries the Lead in what is left of George Will’s Credibility A 16th paragraph (if I counted right) at the Washington Center for Equitable Growth blog is more prominent that a first paragraph here, but Brad has never been a ...


June 28, 2015, 9:03 am, 1498189
Thomas Jordan, chairman of the SNB’s governing board. Bloomberg News

ZURICH–The head of the Swiss National Bank reiterated the franc remains “significantly overvalued,” even as he cautioned ...


June 28, 2015, 9:03 am, 1498188
PATRICK LIN/Agence France-Presse/Getty Images

Taiwan’s central bank on Thursday left its benchmark interest rates unchanged, as expected, as low fuel prices kept inflation well below the official target.

Still, the ...


June 28, 2015, 9:03 am, 1498185

The European Central Bank’s governing council’s continued approval of emergency loans to Greek banks is justified because the banks are solvent with adequate collateral, Belgium’s Central Bank Governor Jan Smets said Thursday.
The ECB kept its lending to Greek banks unchanged Thursday under the emergency lending program known as ELA, ...


June 28, 2015, 9:03 am, 1498187

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, June 25, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Fireworks Watch in Early July for the Federal Reserve Fed’s Yellen Headed Back ...


June 28, 2015, 9:03 am, 1498184
Federal Reserve governor Jerome Powell. Andrew Harrer/Bloomberg News

More can and should be done to improve the security of the U.S. payment system, including the adoption of ...


June 28, 2015, 9:03 am, 1498186

U.S. prices jumped in May, but subdued inflation continues to present a potential complication for the Federal Reserve as it inches toward raising short-term interest rates.

The personal consumption expenditures price index, ...


June 28, 2015, 9:03 am, 1498183
Federal Reserve governor Daniel Tarullo. Pete Marovich/Bloomberg News

NEW YORK–Federal Reserve governor Daniel Tarullo said Thursday changing bond-market liquidity conditions remain unaccounted for, with uncertain implications ...


June 28, 2015, 9:03 am, 1498180

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, June 26, 2015:

Sign up for the newsletter: http://on.wsj.com/grandcentralsignup


Highlights

Hilsenrath’s Take: Mixed Inflation Readings Complicate Fed’s Confidence Hurdle Tarullo: Something’s Changed in the Bond ...


June 28, 2015, 9:03 am, 1498181
A woman holds a plackard reading ‘Yes to Europe–no to austerity, no to drachma’ during a pro-European demonstration in front of the Greek parliament in Athens this week.


June 28, 2015, 9:03 am, 1498182
Crews pour a driveway in front of a newly constructed M/I Homes house in a Dallas suburb in June. Kris Hudson/The Wall Street Journal

Two real-estate economists ...


June 28, 2015, 9:03 am, 1498178
Kansas City Fed President Esther George, shown in April, touted in a speech Thursday what she hoped would be a collaborative process to further modernize the way money is ...


June 28, 2015, 9:03 am, 1498177
An M/I Homes house under construction in a Dallas suburb in June. Kris Hudson/The Wall Street Journal

The national supply of homes for sale is getting squeezed ...


June 28, 2015, 9:03 am, 1498179
A key labor market indicator–the labor-force participation rate–has been on the decline in the U.S., unlike in other countries. A Walmart employee in Miami stocks the shelves.


June 28, 2015, 9:03 am, 1498176
U.S. Federal Reserve Chairwoman Janet Yellen met with two Senators in April Yin Bogu/Xinhua//Zuma Press

After a flurry of Capitol Hill meetings in March, Federal Reserve ...


June 28, 2015, 9:03 am, 1498175
U.S. investors face a short workweek because the financial markets will close Friday to observe the July 4th holiday. But before outdoor grills are fired up and fireworks explode, economy-watchers will get the employment report on Thursday. Those figures, along with new data on wages, home prices, manufacturing and car ...


June 28, 2015, 8:35 am, 1498174

Are trends in UK inequality more of a problem for the right than left?

I'm prompted to ask by the fact that recent years have seen two different trends. On the one hand, there's been increased equality between the moderately well-off and the moderately badly off: the ...


June 28, 2015, 8:05 am, 1498173

In our textbook, Tyler and myself write:

Farmers use the subsidized water to transform desert into prime agricultural land. But turning a California desert into cropland makes about as much sense as building greenhouses in Alaska! America already has plenty of land on which cotton can be grown cheaply.  Spending billions ...


June 28, 2015, 8:04 am, 1498172
(Don Boudreaux)

… is from page 43 of my late colleague Jim Buchanan’s 1977 collection, Freedom in Constitutional Contract; specifically, ...


June 28, 2015, 7:33 am, 1498170

Amazing. Or maybe not.


June 28, 2015, 7:33 am, 1498171

Interesting. Especially this bit:

One of the big choices was what they spent money on. A common thread was frugality about cars. Not only did they buy modestly priced vehicles, they kept them for a long time.


June 28, 2015, 5:24 am, 1498155

Photo Credit: David Warrington

Investing ideas come in many forms:

Factors like Valuation, Sentiment, Momentum, Size, Neglect…New technologiesNew financing methods and security typesChanges in government policies will have effects, cultural change, or other top-down macro ideasNew countries to ...


June 28, 2015, 5:03 am, 1498104

June 28, 2015, 4:04 am, 1498103
My regular column is available to subscribers on www.thesundaytimes.co.uk This is an excerpt. There is more than a touch of déjà vu about George Osborne’s summer budget on July 8. In June 2010, when Osborne presented his first “emergency”...


June 28, 2015, 2:44 am, 1498060

The black-white wage gap persists. Year after year, data tells us that black workers in the US earn less than their white counterparts. This column presents new evidence focussed on the notion of race-specific social networks and ‘knowledge spillovers’. Data suggest that a black worker may be less able than ...


June 28, 2015, 2:05 am, 1498059

The consumers, most of all.  But how about amongst the workers?  I think you have to slot French taxi drivers under “don’t benefit.”  And otherwise?  That is the topic of my latest New York Times column for The Upshot:

On the positive side, the ...


June 28, 2015, 12:05 am, 1498051
A