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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October 20, 2014, 5:23 am, 1353889
Here are some summary notes on economic growth and development prospects for the Ivory Coast.


October 20, 2014, 5:23 am, 1353888

Deflation is defined as a fall in the general price level. It is a negative rate of inflation. It means the value of money increases rather than decreases. Deflation is not necessarily bad, but often periods of deflation / low inflation can lead ...


October 20, 2014, 5:03 am, 1353829

 

Faltering growth, double-digit unemployment and a looming threat of deflation in Europe are causing American businesses to worry — again — about the eurozone’s economic woes.

According to a survey of corporate economists ...


October 20, 2014, 5:03 am, 1353828
The Federal Reserve in Washington. Agence France-Presse/Getty Images

The Cato Institute has some bones to pick with the Federal Reserve.

The Washington libertarian think tank this week ...


October 20, 2014, 5:03 am, 1353827

Since the S&P 500 is behaving so predictably, and because we just visited the topic on Thursday, 16 October 2014, we thought we'd take this opportunity to revisit how the stock prices of the S&P 500 behaved in the third quarter of 2014.

Our ...


October 20, 2014, 5:03 am, 1353826

October 20, 2014, 5:03 am, 1353825

I've been harping on the lack of concern about market power since I began blogging almost 10 years ago. Nobody much listened or cared -- so this is very welcome:

Amazon’s Monopsony Is Not O.K., by Paul Krugman, Commentary, NY Times: Amazon.com, the giant online retailer, has too much ...


October 20, 2014, 2:05 am, 1353794

This is from Larry Summers and Lant Pritchett:

…knowing the current growth rate only modestly improves the prediction of future growth rates over just guessing it will be the (future realized) world average.  The R-squared of decade-ahead predictions of decade growth varies from 0.056 (for the most recent decade) to 0.13.  ...


October 20, 2014, 1:33 am, 1353793
The ECB has been concerned about falling consumer prices. I propose that's 100% stupid, yet that's the concern.

When the euro declined vs. the US dollar, the ECB was happy that inflation would inch back up. The fear now is that falling oil prices will take away the alleged ...


October 20, 2014, 1:03 am, 1353785
Boston Fed President Eric Rosengren at the Boston Fed last year.  Boston Globe

BOSTON–The Federal Reserve will likely conclude its bond-buying program this month as planned, ...


October 20, 2014, 1:03 am, 1353784

BOSTON–The Federal Reserve is ready to end its bond-buying program at its meeting next week, Boston Fed President Eric Rosengren said in an interview Saturday. But if overseas weakness turns out to have a greater negative impact on the U.S. economy than he currently expects, Mr. Rosengren said the central ...


October 20, 2014, 1:03 am, 1353782
The Federal Reserve in Washington. Agence France-Presse/Getty Images

The Cato Institute has some bones to pick with the Federal Reserve.

The Washington libertarian think tank this week ...


October 20, 2014, 1:03 am, 1353783

 

Faltering growth, double-digit unemployment and a looming threat of deflation in Europe are causing American businesses to worry — again — about the eurozone’s economic woes.

According to a survey of corporate economists ...


October 20, 2014, 12:45 am, 1353781
Robert Litan: Online commerce accounts for about 6% of all retail sales this year, up from essentially zero in 2000.


October 19, 2014, 11:03 pm, 1353778
San Francisco Federal Reserve Bank President John Williams Reuters

The Federal Reserve should end its bond-purchase program as planned at its policy meeting this month, John Williams, ...


October 19, 2014, 11:03 pm, 1353777

President Barack Obama on Sunday hit the campaign trail for the first time this year, urging voters to the polls to support a Democratic party that “is going to fight for you.”

Mr. Obama was stumping for Maryland Lt. Gov. Anthony Brown and later for Illinois Gov. Pat Quinn at ...


October 19, 2014, 11:03 pm, 1353775

BOSTON–The Federal Reserve is ready to end its bond-buying program at its meeting next week, Boston Fed President Eric Rosengren said in an interview Saturday. But if overseas weakness turns out to have a greater negative impact on the U.S. economy than he currently expects, Mr. Rosengren said the central ...


October 19, 2014, 11:03 pm, 1353776
Boston Fed President Eric Rosengren at the Boston Fed last year.  Boston Globe

BOSTON–The Federal Reserve will likely conclude its bond-buying program this month as planned, ...


October 19, 2014, 10:34 pm, 1353774

Efficient banks have many options for lenders and credit when banking crises hit. It's the inefficient and insolvent banks that must turn to a central bank. But do we really want central banks that reward insolvency and encourage inefficiency? ...


October 19, 2014, 10:04 pm, 1353772
(October 20, 2014 12:01 AM, by Bryan Caplan) Mainstream scientists assure us that Ebola poses very little threat to Americans; unless you're a health worker who cares for the infected, Ebola is almost impossible to catch in a rich, modern society. Yet many populists and borderline conspiracy theorists... (7 COMMENTS)


October 19, 2014, 10:04 pm, 1353771
(October 20, 2014 01:27 AM, by Bryan Caplan) Economics makes many things funnier. But econ's comedic value-added for the final scene of The Warriors (1979) is truly rich. The first 15 seconds have the big unintended joke, but don't stop there.... (0 COMMENTS)


October 19, 2014, 9:03 pm, 1353770

President Barack Obama on Sunday hit the campaign trail for the first time this year, urging voters to the polls to support a Democratic party that “is going to fight for you.”

Mr. Obama was stumping for Maryland Lt. Gov. Anthony Brown and later for Illinois Gov. Pat Quinn at ...


October 19, 2014, 9:03 pm, 1353769
From Merrill Lynch on Oil:

The plunge in oil prices, if it proves persistent, could end up being the big economic story. Energy prices have fallen very sharply in the past three months. Brent oil prices have declined from around $110/bbl in July to $86/bbl as this goes to ...


October 19, 2014, 8:44 pm, 1353768

Yale University has generated annual returns of 13.9% over the last 20 years on its endowment – well in excess of the 9.2% average return on US university endowments. Keynes’ writings were a considerable influence on the investment philosophy of David Swensen, Yale’s CIO. This column traces how Keynes’ experiences ...


October 19, 2014, 8:44 pm, 1353767
A


October 19, 2014, 7:23 pm, 1353765
In this TED talk, Dilip Ratha, ofthe Migration and Remittances Unit at the World Bank, sets out simply boththe size of remittancesand theeconomic impact on the countries that receive them.


October 19, 2014, 7:03 pm, 1353764
San Francisco Federal Reserve Bank President John Williams Reuters

The Federal Reserve should end its bond-purchase program as planned at its policy meeting this month, John Williams, ...


October 19, 2014, 6:44 pm, 1353763

I was pleased to see today’s New York Times editorial entitled “A Rate Cap for All Consumer Loans.”  It created a very public description of an industry indiscretion involving loaning money to the military at over 36%. Those loans are illegal because a federal law makes ...


October 19, 2014, 5:23 pm, 1353761
This article from the Sunday Observerhttp://www.theguardian.com/business/2014/
oct/18/ec... is really useful for understanding some of the longer term dynamics in the labour market that are affecting the pattern of demand for jobs of different skills.


October 19, 2014, 4:34 pm, 1353746

The Nobel award  last week to Jean Tirole, of Toulouse School of Economics, capped a twentieth-century drama whose story has barely begun to be told. I can describe it here only in the broadest way; thanks to the Swedes, the details will now gradually emerge, as did those ...


October 19, 2014, 4:05 pm, 1353743

A shocking example is the decrepit state of German military hardware. Of the Luftwaffe’s 254 fighter planes, 150 cannot fly.

That is from Wolfgang Münchau at the FT.


October 19, 2014, 3:33 pm, 1353741


October 19, 2014, 3:23 pm, 1353740
Behavioural economics figures more prominently in the new specifications for A level economics from September 2015 onwards.This brief essay from Cass Sunstein, the co-author (with Richard Thaler)of "Nudge"offers a general introduction to the idea of nudging, along with a list of ten of the most important “nudges.” It also provides ...


October 19, 2014, 2:05 pm, 1353714

October 19, 2014, 1:33 pm, 1353713

Ultimately all economics is local. Ontario municipalities are in the final throes of a municipal election race and in my own community the question of municipal economic development via public sector construction spending has come up. The concern is that much of the economic activity in my community over the ...


October 19, 2014, 1:33 pm, 1353712

Recent posts by Adrian Hope Baille and Sina Motamedi have got me thinking again about the idea of the Federal Reserve (or any other central bank for ...


October 19, 2014, 1:33 pm, 1353711
Huky Guru posted a couple of interesting charts on his blog today about shrinking credit but rising percentage of nonperforming Spanish bank loans: NPLs of banks rebounded to 16.59%. Seven points higher than in the 1994 crisis.

Spanish Bank Shrinking Credit


October 19, 2014, 1:23 pm, 1353710
If you have studied the economic importance of capital investment as part of your macroeconomics, then this short article on the German economy (Europe's biggest but experiencing weaker economic growth) will be of interest.The German Finance Minister wants the ratio of investment to GDP to start climbing again with infrastructure ...


October 19, 2014, 1:03 pm, 1353681

Jim Hamilton:

How will Saudi Arabia respond to lower oil prices?: Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. ...


October 19, 2014, 1:03 pm, 1353680

Robert Shiller's narrative:

When a Stock Market Theory Is Contagious: Since Sept. 18, the stock market has fallen more than 6 percent. An abrupt decline last week — after five years of gains — prompted fears that the market may have reached a major turning point. Has a bear ...


October 19, 2014, 1:03 pm, 1353679
Some interesting thoughts from Professor Hamilton: How will Saudi Arabia respond to lower oil prices?

Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold ...


October 19, 2014, 12:04 pm, 1353676
(Don Boudreaux)

Here’s a letter to a college student in New Jersey:

Dear Mr. Sloan

Thanks for writing.

You ask if my support of free trade is “too simplistic.”  Aren’t there “conditional situations and details” that I overlook when I oppose protectionist arguments?  Fair questions.  My answer, though, is that while I agree ...


October 19, 2014, 11:03 am, 1353663

Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath.


October 19, 2014, 10:04 am, 1353660
(Don Boudreaux)

… is from pages 191-192 of Leonard Read‘s 1956 essay “Unearned Riches,” which is chapter XIV in the 1956 collection, edited by Mary Sennholz, On Freedom and Free Enterprise: Essays in Honor of Ludwig von Mises (available for free here) (original emphasis):

Our wage earner may think of ...


October 19, 2014, 9:33 am, 1353658
A great and balanced essay. Thanks to Alex Tabarrok for the pointer.


October 19, 2014, 8:05 am, 1353636

Charles Murray has a good piece on Ayn Rand, critical in parts but especially insightful about why Rand’s books continue to be so inspirational and influential:

Rand expressed the glory of human achievement. She tapped into the delight a human being ...


October 19, 2014, 7:33 am, 1353635

In the New York Times, no less.

Three cheers for Obamacare!


October 19, 2014, 7:33 am, 1353634

The Washington Post, 10/16: "Want to feel better about Ebola? This (massive) chart should do the trick."

We wanted to come up with a way to represent the true scale of Ebola in the United States. So we made the graphic below, which depicts over 310 million ...


October 19, 2014, 7:23 am, 1353633
Here is a positive analysis of the economic effects of the rise in net inward migration into the UK economy from Jonathan Portes, Director of the National Institute of Economic and Social Research:http://www.theguardian.com/uk-news/2014/
oct/19/imm...


October 19, 2014, 6:44 am, 1353610
A


October 19, 2014, 6:44 am, 1353609
A


October 19, 2014, 5:33 am, 1353607

With very appetizing pictures of the pizzas.


October 19, 2014, 5:23 am, 1353606
I find it reassuring that we have an intellectual heavyweight as Chief Economist of the Bank of England. Andy Haldane gave a talk last month to the Keynes Society that was easily one of the best I have heard in the last ten years. Haldane understands that Economic forecasting and ...


October 19, 2014, 5:23 am, 1353605
The slump in global oil prices is one of the BIG economic stories at the moment. There is plenty of comment and analysis around - this article from the Observer is really good focusing on the gainers and losers from an international perspective.Read:Low oil price means high anxiety for Opec ...


October 19, 2014, 5:23 am, 1353603
I am sure many economics teaching colleagues will be fascinated to read this blog from John Tomsett at Huntingdon School in York on how he has approached his microeconomics teaching in the first six weeks of the new term. For me, John's blog is an essential read and he is ...


October 19, 2014, 5:23 am, 1353604
Newnight's Economics Editor Duncan Weldon looks at prospects for the UK economy. How well the economy is doing depends on where you look. Unemployment is falling but real wages for people in work are stagnant or falling. And the productivity gap between the UK and the rest of the world ...


October 19, 2014, 5:03 am, 1353600

October 19, 2014, 4:44 am, 1353599
Robert Litan: Online commerce accounts for about 6% of all retail sales this year, up from essentially zero in 2000.


October 19, 2014, 4:04 am, 1353598
My regular column is available to subscribers on www.thesundaytimes.co.uk This is an excerpt. Even before the stock market had an attack of the vapours, other factors — a sharp fall in Britain’s inflation rate, renewed weakness in the eurozone,...


October 19, 2014, 2:05 am, 1353583

Underpaid or overpaid?:

They’re looking for the few, the proud — and the really desperate.

For a measly $19 an hour, a government contractor is offering applicants the opportunity to get up close and personal with potential Ebola patients at JFK Airport — including taking their temperatures.

Angel Staffing Inc. is hiring brave ...


October 19, 2014, 12:04 am, 1353571
(October 19, 2014 12:09 AM, by Bryan Caplan) Given existing border controls, mild measures to prevent serious contagious disease seem morally acceptable. Yet the best choice, in my view, remains fully open borders - tear down the walls and make travel between countries as free as travel within... (0 COMMENTS)