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 .


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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November 1, 2014, 12:34 am, 1362021

American revolutionaries revolted in part over high tariffs, but the new American state immediately began raising tariffs after the revolution, and tariffs have played an important role in American wars, imperialism, and crony capitalism ever since.


October 31, 2014, 11:33 pm, 1362019


October 31, 2014, 11:03 pm, 1361994
Larry Kudlow wrote an absurd piece at CNBC today.

Of course Kudlow is usually wrong and frequently absurd ... as an example, in June 2005 Kudlow wrote "The Housing Bears are Wrong Again" and called me (or people like me) "bubbleheads".

Homebuilders led the stock parade this ...


October 31, 2014, 10:44 pm, 1361993

Recent scandals involving some financial benchmarks have shaken the confidence in them. Regulators have responded with sanctions and with actions to support more robust benchmarks. This column presents new research on how a benchmark administrator would optimally weigh transaction prices to produce a fixing. Weights assigned to the observed prices ...


October 31, 2014, 10:44 pm, 1361992

House price fluctuations take centre stage in recent macroeconomic debates, but little is known about their long-run evolution. This column presents new house price indices for 14 advanced economies since 1870. Real house prices display a pronounced hockey-stick pattern over the past 140 years. They stayed constant from the 19th ...


October 31, 2014, 7:03 pm, 1361899

Next week, Nevada voters will cast their ballots and decide whether or not Nevada will institute a margin tax. The tax is a modified gross receipts tax (a type of tax only five other states have) and is modeled after the Texas margin tax. Last March, I explained ...


October 31, 2014, 7:03 pm, 1361898
This is one of my favorite GDP graphs. The graph below shows the contribution to GDP from residential investment, equipment and software, and nonresidential structures (3 quarter trailing average). This is important to follow because residential investment tends to lead the economy, equipment and software is generally coincident, and nonresidential ...


October 31, 2014, 6:44 pm, 1361897
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October 31, 2014, 6:34 pm, 1361896

SpaceShipTwo, the craft that British billionaire Richard Branson’s Virgin Galactic hoped to be the basis for passenger air travel into Earth orbit, crashed today in California’s Mojave Desert during a test flight:

SpaceShipTwo, a rocket plane ...


October 31, 2014, 6:05 pm, 1361895

In the dystopian movie Rollerball, all the world is ruled by one giant corporate state “controlling access to all transport, luxury, housing, communication, and food on a global basis.”

Thanks to popular media and the errors of neoclassical economics, we are trained to ...


October 31, 2014, 5:33 pm, 1361893
Here's the question of the day: Could Non-Citizens Determine the Outcome of the Midterm Elections?

Some elections, especially for Senate are so close, the unfortunate answer is "yes" as the following video insight from Insight from the Libre Institute explains.



October 31, 2014, 5:03 pm, 1361829
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, says rate-hike timing depends on the economy. Bloomberg News

Federal Reserve Bank of Richmond President Jeffrey Lacker ...


October 31, 2014, 5:03 pm, 1361830
October’s jobs report headlines next week’s economic data. Market observers will be watching to see if the U.S. can continue a streak of impressive job creation.


October 31, 2014, 5:03 pm, 1361827
Gas prices at an Arco gas station this week in Mill Valley, Calif. Getty Images

The average gallon of gasoline will cost less than $3 this weekend ...


October 31, 2014, 5:03 pm, 1361828
The government and the Bank of Japan hope wage growth will eventually filter through the economy and start a virtuous cycle of higher private spending ...


October 31, 2014, 5:03 pm, 1361826
Christina Romer Andrew Harrer

Carmen Reinhart and Kenneth Rogoff’s 2009 publication of “This Time Is Different: Eight Centuries of Financial Folly” was a well-timed look at recessions ...


October 31, 2014, 5:03 pm, 1361825

Tim Duy:

Another Kocherlakota Dissent, by Tim Duy: Minneapolis Federal Reserve President Narayana Kocherlakota released a statement regarding his dissenting vote at this week's FOMC meeting. He does not share his colleagues faith that inflation will return to target anytime soon:

...In my assessment, the medium-term outlook ...


October 31, 2014, 4:44 pm, 1361824
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October 31, 2014, 4:05 pm, 1361821

Jeff Deist and Patrick Barron continue their discussion on monetary imperialism. They delve deeper into US dollar supremacy, and how it might end with a whimper instead of a bang; how the Bundesbank is a potential savior for the world monetary order, ...


October 31, 2014, 4:05 pm, 1361820

Just when the current “discussion” on economics by public intellectuals like Paul Krugman hits bottom, Business Week decides to dig the hole even deeper by lionizing John Maynard Keynes. Keynes, according to BW, had the theories that can “fix” the currently moribund world economy.

There is a doctor in the ...


October 31, 2014, 4:05 pm, 1361819

The Bank of Japan announced an unexpected major increase in its Quantitative Easing policy increasing its purchases from 50 to 80 trillion Yen sending US stock markets to all time highs and Japanese markets to multi-year highs. Some people made a bundle because of the move, others lost a bundle.


October 31, 2014, 4:05 pm, 1361818

Once in a while, the gold standard makes a comeback in the public eye. Most recently it’s happened in connection to Steve Forbes’ book, Switzerland’s referendum, and the approaching mid-term elections in the US. Each time it’s a pleasant surprise, and a definite change of pace from ...


October 31, 2014, 3:33 pm, 1361813
"Whatever it Takes" Japanese Style

It's a world truly gone mad.

In a surprise move today, the Bank of Japan announced further quantitative easing, dominated by long-term Japanese government bonds. The BoJ also announced it and would triple annual purchases of exchange traded funds and property investment ...


October 31, 2014, 3:33 pm, 1361812


October 31, 2014, 3:33 pm, 1361811


October 31, 2014, 3:03 pm, 1361749

A new paper by French economists Emmanual Saez and Gabriel Zucman discusses a new technique for using tax returns to estimate top wealth shares. They find that wealth inequality has been increasing such that the top 1 percent now control about 40 percent of all household wealth, as ...


October 31, 2014, 3:03 pm, 1361748

The National Association of Enrolled Agents recently released a warning that the Affordable Care Act Marketplace may complicate tax returns. The NAEA is an organization of tax professionals that are specially licensed through the Department of Treasury and can represent individuals directly to the IRS. According to ...


October 31, 2014, 3:03 pm, 1361747

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, October 31, 2014:

Sign up for the newsletter.

Highlights

Schlesinger’s Take: Behind BOJ’s Halloween Treat, A Scary Slip Back Toward Deflation Bank of Japan ...


October 31, 2014, 3:03 pm, 1361745

Price gains remained subdued across the U.S. economy in September, keeping a key gauge of inflation below the Federal Reserve’s 2% target for a 29th consecutive month.

The price index for


October 31, 2014, 3:03 pm, 1361746

If you waited until Halloween to buy goodies for your neighborhood’s trick-or-treaters, you’re in luck. Pricing data suggest you’re less likely to pay a premium today than if you stocked ...


October 31, 2014, 3:03 pm, 1361742
Bank of Japan Gov. Haruhiko Kuroda speaks at the bank’s headquarters in Tokyo on Oct. 31. Agence France-Presse/Getty Images

“Three” could be the new magic number for ...


October 31, 2014, 3:03 pm, 1361743
Deputy Prime Minister and Finance Minister Taro Aso puts his hand on his ear at a news conference after attending the Asia-Pacific Economic Cooperation finance ministers meeting in Beijing ...


October 31, 2014, 3:03 pm, 1361744

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Friday he believes the U.S. central bank is failing to defend its inflation goal and that it should be providing more stimulus to the economy, in a statement defending his dissenting vote at this week’s monetary policy ...


October 31, 2014, 3:03 pm, 1361741
Inflation tends to be a little higher in the first six months of the year and a little lower in July through December. Agence France-Presse/Getty Images

Consumer ...


October 31, 2014, 3:03 pm, 1361737
Jeffrey Lacker, president of the Federal Reserve Bank of Richmond, says rate-hike timing depends on the economy. Bloomberg News

Federal Reserve Bank of Richmond President Jeffrey Lacker ...


October 31, 2014, 3:03 pm, 1361740
The European Central Bank’s worry is that if prices fall, consumers might be inclined to wait on purchases, removing even more momentum from the economy. Bloomberg ...


October 31, 2014, 3:03 pm, 1361738
October’s jobs report headlines next week’s economic data. Market observers will be watching to see if the U.S. can continue a streak of impressive job creation.


October 31, 2014, 3:03 pm, 1361739
Sen. Tim Johnson (D., S.D.) Bloomberg News

A U.S. Senate panel will hold a hearing on Nov. 21 over whether financial regulators are too close to or ...


October 31, 2014, 3:03 pm, 1361736
The BEA has released the underlying details for the Q3 advance GDP report today.

Investment in single family structures is now back to being the top category for residential investment (see first graph). Home improvement was the top category for twenty one consecutive quarters following the housing bust ... ...


October 31, 2014, 2:44 pm, 1361735
President Barack Obama tried to shift attention back to the economy in a speech in Rhode Island.


October 31, 2014, 2:44 pm, 1361734
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October 31, 2014, 2:44 pm, 1361733
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October 31, 2014, 2:34 pm, 1361732

Jeff Deist and Patrick Barron delve deeper into US dollar supremacy, and how it might end with a whimper instead of a bang.


October 31, 2014, 2:34 pm, 1361731
Teaser:

From ...


October 31, 2014, 2:34 pm, 1361730
Teaser:

The ...


October 31, 2014, 2:05 pm, 1361727

 The 2022 Olympics (i.e., the Winter Games) is now down to only two applicant nations: China and Kazakhstan. This follows the withdrawal of Norway after the taxpayers of Norway balked on ponying up the cash necessary to make the Olympics ...


October 31, 2014, 2:05 pm, 1361726

I don’t myself care about the event, I just liked the headline.

A related study is here, and I thank CK for the pointer.


October 31, 2014, 2:04 pm, 1361725
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

You report that Hillary Clinton tried to explain (away) her recent ‘businesses don’t create jobs’ remark by saying that what she really meant is that jobs are not created by businesses that “outsource jobs or stash their profits overseas” (“Hillary Rodham Warren,” ...


October 31, 2014, 2:04 pm, 1361724
Given the exceedingly favorable atmosphere for Republicans this fall, McConnell’s direction on Obamacare has been closely watched as he both battles for reelection against Democrat Alison Lundergan Grimes and as the GOP prepares for Senate control for the first time since 2006. McConnell’s office said there are multiple avenues that ...


October 31, 2014, 1:23 pm, 1361718
Financial price data are converted into music, the music is played to a rat, then the rat guesses whether the price will fall or rise


October 31, 2014, 1:03 pm, 1361656
Sen. Tim Johnson (D., S.D.) Bloomberg News

A U.S. Senate panel will hold a hearing on Nov. 21 over whether financial regulators are too close to or ...


October 31, 2014, 1:03 pm, 1361655
The NAHB released their 2015 housing forecast today. Towards the end of each year I collect some housing forecasts for the following year, and it looks like most analysts are optimistic for 2015.

Here is a summary of forecasts for 2014. In 2014, new home sales ...


October 31, 2014, 12:44 pm, 1361654
A


October 31, 2014, 12:44 pm, 1361653
A


October 31, 2014, 12:44 pm, 1361652

This week's Dealb%k is about foreign debtors that file under the US Code, which also just happens to be the subject of a recent paper that my co-author and I have posted online.


October 31, 2014, 12:34 pm, 1361651

By Simon Johnson

It is hard to move around in Washington these days without bumping into a conference on the future of finance. But most of these are either closed to the public, or run on behalf of large banks as part of their lobbying efforts.

Next week, there will be


October 31, 2014, 12:34 pm, 1361650

Later today, children all over the country and, accompanied for the most part by one or both parents go door-to-door gathering candy from neighbors. It’s a tradition that we’ve all participated in either as the recipient and the giver so ...


October 31, 2014, 12:05 pm, 1361646

1. Scott Sumner on demand- and supply-side stagnation.  I also would stress the risk premium as a transmission mechanism linking the two curves.

2. Austin Frakt reviews Google’s Inbox.

3. What the world eats.

4. When DNA is the matchmaker (dubious, in my view).

5.


October 31, 2014, 12:04 pm, 1361645
(October 31, 2014 01:35 PM, by David Henderson) I've posted before (here and here) about the John Cook study that purports to find that 97% of climate scientists believe that humans are the main cause of global warming. Now Richard Tol, a professor of the economics of climate... (0 COMMENTS)


October 31, 2014, 11:33 am, 1361642

This will be a confusing post, because I'm writing it to try to get my head clear on something. And it's still not clear. There are no answers here: only questions, and strange thoughts.

1. Lots of people believe the Inflation Fallacy: "Inflation makes us worse off because a 1% rise ...


October 31, 2014, 11:33 am, 1361641

From the inbox:

Beginning in 2015, Cambridge University Press will be publishing the Journal of Benefit-Cost Analysis on behalf of the Society for Benefit-Cost Analysis.

In an announcement, Cambridge University Press noted that “[t]his new partnership marks a rebranding of the journal in terms of both appearance and ...


October 31, 2014, 11:33 am, 1361640

…. is from Walter E. Williams, writing in his latest syndicated column “Africa: A Tragic Continent“:

Africa’s poverty is, for the most part, self-inflicted. Some people might disagree because their college professors taught them that the legacy of colonialism explains Third World poverty. That’s nonsense. Canada was a colony. So ...


October 31, 2014, 11:23 am, 1361639
A


October 31, 2014, 11:23 am, 1361638

The rest of the world is holding its breath as the eurozone continues wobbling along the brink of deflation. In fact, numerous member states are already experiencing what it means to let “it” happen again. With the region stuck in depression since 2008, Euroland authorities are writing fresh world records ...


October 31, 2014, 11:03 am, 1361575

Price gains remained subdued across the U.S. economy in September, keeping a key gauge of inflation below the Federal Reserve’s 2% target for a 29th consecutive month.

The price index for


October 31, 2014, 11:03 am, 1361574

Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said Friday he believes the U.S. central bank is failing to defend its inflation goal and that it should be providing more stimulus to the economy, in a statement defending his dissenting vote at this week’s monetary policy ...


October 31, 2014, 11:03 am, 1361572

“Three” could be the new magic number for the Bank of Japan 's monetary policy after it shocked the financial markets by taking  additional easing measures that boosted stock prices and weakened the yen.

At the news conference where BOJ Gov. Haruhiko Kuroda explained the details of how ...


October 31, 2014, 11:03 am, 1361573
Deputy Prime Minister and Finance Minister Taro Aso puts his hand on his ear at a news conference after attending the Asia-Pacific Economic Cooperation finance ministers meeting in Beijing ...


October 31, 2014, 11:03 am, 1361571
Inflation tends to be a little higher in the first six months of the year and a little lower in July through December. Agence France-Presse/Getty Images

Consumer ...


October 31, 2014, 11:03 am, 1361570
The European Central Bank’s worry is that if prices fall, consumers might be inclined to wait on purchases, removing even more momentum from the economy. Bloomberg ...


October 31, 2014, 11:03 am, 1361569

Click on graph for larger image.

The final Reuters / University of Michigan consumer sentiment index for October was at 86.9, up from the preliminary reading of ...


October 31, 2014, 10:44 am, 1361568
Hilary Rosen: It is now possible to be married in several states where if you came to work the next day and announced you were married, you could be fired for being gay.


October 31, 2014, 10:34 am, 1361567
Today’s US personal spending and income report for September fell short of projections. Economists overall were looking for a 0.3% rise in the headline income number, but the actual data showed a lesser 0.2% increase last month. Consumption fared worse, retreating by 0.2% vs. the 0.1% gain that the crowd ...


October 31, 2014, 10:34 am, 1361566

While most national attention is focused on which party will control the Senate and who will win the 36 gubernatorial races, many states also have fiscal initiatives on their ballots. And a few may provide some clues to how the public feels about the trade-off between taxes and government ...


October 31, 2014, 10:34 am, 1361565

What is the case against evidence-based policy? This is one question prompted by David Cameron's refusal to legalize drugs in the face of evidence that criminalization of them doesn't reduce their use.

The question, of course, generalizes. Many of us would argue that ...


October 31, 2014, 10:04 am, 1361563
(Don Boudreaux)

… is from page 197 of Michael Huemer’s impressive 2013 book, The Problem of Political Authority (emphases original):

A related form of utopianism consists of suspending general assumptions about human nature when considering agents of the state.  Defenders of government are often keen to point out the harms that might ...


October 31, 2014, 10:04 am, 1361562
Republicans remain almost united in their utter rejection of the communist doctrines of one Simon Peter fisherman and trouble maker. Elizabeth Stoker Bruenig explains in Salon I comment I don’t want to exaggerate. It is certainly not true that Kasich’s proposed policy is from “each according to his ability” and ...


October 31, 2014, 9:33 am, 1361557

Three PhDs? What about the opportunity cost of time spent in school? Or did he get all three simultaneously?

Right off the bat, you can count out Robert B. Banner, otherwise known as the Hulk. While Mr. Banner has three Ph.D.’s from the California Institute of Technology, at some point ...


October 31, 2014, 9:33 am, 1361558

With that title we're trying to boost our traffic and maybe even get Typepad to crash:

In 2011 Steven Schlozman, an assistant professor of psychiatry at Harvard Medical School, went on a late-night radio show and said he had recently discovered a paper about a mysterious disease, called Ataxic Neurodegenerative Satiety ...


October 31, 2014, 9:03 am, 1361496
Bloomberg

Even before Japan’s central bank Friday ramped up its big monetary stimulus program, it was testing the boundaries of monetary policy. Under the easing plan launched a year ...


October 31, 2014, 9:03 am, 1361495

 

Asians are the most optimistic about the future, according to a study by Pew Research Center. Here, a Chinese woman laughs during a social dance with a man at ...


October 31, 2014, 9:03 am, 1361493

If you waited until Halloween to buy goodies for your neighborhood’s trick-or-treaters, you’re in luck. Pricing data suggest you’re less likely to pay a premium today than if you stocked ...


October 31, 2014, 9:03 am, 1361494

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, October 31, 2014:

Sign up for the newsletter.

Highlights

Schlesinger’s Take: Behind BOJ’s Halloween Treat, A Scary Slip Back Toward Deflation Bank of Japan ...


October 31, 2014, 9:03 am, 1361492
The BEA released the Personal Income and Outlays report for September:

Personal income increased $22.7 billion, or 0.2 percent ... in September, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) decreased $19.0 billion, or 0.2 percent.
...
Real PCE -- PCE adjusted to remove ...


October 31, 2014, 8:05 am, 1361490

That has been the received wisdom, but it is now challenged by a new paper (pdf) by Christina and David Romer:

This paper revisits the aftermath of financial crises in advanced countries in the decades before the Great Recession. We construct a new series on financial distress in 24 ...


October 31, 2014, 8:04 am, 1361489

October 31, 2014, 8:04 am, 1361488


October 31, 2014, 8:04 am, 1361487
The opponents of Obama-care just will not give up. Just because all of their claims of disaster over the last few years have been proven wrong they continue to repeat every claims that they think does not make them look foolish. The latest example is John R. Graham of the ...


October 31, 2014, 7:33 am, 1361483

Backup singers are one of the keys to rock 'n' roll, and according to this, now almosteverybody can have some.


October 31, 2014, 7:33 am, 1361481

Short answer:

. . .Navy had the most distance between talent and success. Despitemilitary-academy restrictionsthat make recruiting top players difficult,Navy made bowl games in four of the last five seasonsas they outperformed their recruiting expectations by 57.4 spots on average.


October 31, 2014, 7:33 am, 1361482

October 31, 2014, 7:03 am, 1361420

 

Asians are the most optimistic about the future, according to a study by Pew Research Center. Here, a Chinese woman laughs during a social dance with a man at ...


October 31, 2014, 6:44 am, 1361419
A


October 31, 2014, 6:44 am, 1361418
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October 31, 2014, 6:44 am, 1361416
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October 31, 2014, 6:44 am, 1361417
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October 31, 2014, 6:34 am, 1361415
● German retail sales see biggest fall in more than seven years | Reuters German retail sales posted their biggest monthly decline in more than seven years in September, data showed on Friday, a sign that consumers cannot be relied on to prop up Europe’s largest economy. ● BOJ shocks ...


October 31, 2014, 5:03 am, 1361364
Bank of Japan Gov. Haruhiko Kuroda answers questions during a news conference in Tokyo on Oct. 7, 2014. Agence France-Presse/Getty Images

Faced with fresh evidence that his ...


October 31, 2014, 5:03 am, 1361363
Bloomberg

Even before Japan’s central bank Friday ramped up its big monetary stimulus program, it was testing the boundaries of monetary policy. Under the easing plan launched a year ...


October 31, 2014, 5:03 am, 1361362

How would you react if you were enjoying a nice day at the park, when suddenly, you realized that the Grim Reaper was flying behind you, following your every move?


And for those who insist ...


October 31, 2014, 5:03 am, 1361361

October 31, 2014, 5:03 am, 1361360

What are the lessons we should learn from Japan?:

Apologizing to Japan, by Paul Krugman, Commentary, NY Times: For almost two decades, Japan has been held up as ... an object lesson on how not to run an advanced economy. After all, the island nation is the rising superpower ...


October 31, 2014, 4:05 am, 1361359

For the last decade (or more), Canadians have been ebullient about their home-grown housing boom. Home prices in Toronto have grown by leaps and bounds over the past decade. New homeowners have rushed in to take advantage of what seems like a surefire path to riches.

Unfortunately while your home might ...


October 31, 2014, 4:05 am, 1361358

I remember this question being debated extensively circa 2009-2011, and those who said there was a (limited) role for mismatch unemployment were mocked pretty mercilessly.  Well, Sahin, Song, Topa, and Violante have a piece in the new American Economic Review entitled “Mismatch Unemployment.”  (You can find various versions


October 31, 2014, 3:03 am, 1361295
Bank of Japan Gov. Haruhiko Kuroda answers questions during a news conference in Tokyo on Oct. 7, 2014. Agence France-Presse/Getty Images

Faced with fresh evidence that his ...


October 31, 2014, 2:05 am, 1361294

There is a new paper (pdf) by Nicola Gennaioli and Hans-Joachim Voth, forthcoming in The Review of Economic Studies:

Powerful, centralized states controlling a large share of national income only begin to appear in Europe after 1500. We build a model that explains their emergence in response to the ...


October 31, 2014, 1:03 am, 1361235
European Pressphoto Agency

Economic growth was more robust than expected in the third quarter, with the economy growing at a 3.5% pace due partly to stronger defense spending ...


October 31, 2014, 1:03 am, 1361234
Bloomberg

Market participants say the Federal Reserve’s latest changes to a program aimed at controlling short-term interest rates show the central bank is edging ever closer to the day ...


October 31, 2014, 1:03 am, 1361233
A man walks past a propaganda billboard that reads,’China, forward!’ in Beijing. Growth in China dropped to 7.3% year-on-year in the third quarter, the lowest in five years. 


October 31, 2014, 12:34 am, 1361232

After 1910, Germany increasingly relied on fiat money to pay the bills. It wasn't just the Treaty of Versailles that eventually led to hyperinflation, but an all-too-common policy of turning to inflationary monetary policy.


October 31, 2014, 12:04 am, 1361231
(October 31, 2014 12:03 AM, by Bryan Caplan) When I scoff at group identity, critics often call me naive. Won't anyone who heeds my advice to eschew identity politics end up being victimized by all the folks who do take their group identities with utmost seriousness? Then rational... (0 COMMENTS)