Economics Roundtable

January 2014 Payroll Employment

We are getting closer to the previous peak.

Click on the image to get a bigger version.


The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .

Click on the image to get a bigger version.

Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.

Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?

Click on the chart for a larger version.


The Economics Roundtable is sponsored by EconModel.

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

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April 20, 2014, 3:23 am, 1257911

This is a hard book to review. I have respect for the author, and most of his opinions.  But extraordinary claims require extraordinary proof.  There is evidence here, but not extraordinary proof.  I agree that we are in a bad spot, and that ...

April 20, 2014, 3:03 am, 1257895

The day may come soon when cash registers go the way of fax machines.

But cash is still king among large swaths of the population, particularly those deprived of easy access to banks. A case in point: shopping patterns at U.S. discount stores.

Two Federal Reserve Bank of Richmond economists,

April 20, 2014, 3:03 am, 1257894

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, April 18
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“Central banks in the United States and around the world must end their complacency and respond preemptively to the threat [of deflation] by monitoring inflation rates and undertaking aggressive ...

April 20, 2014, 3:03 am, 1257898

The U.S. Treasury is up in arms about China’s move to devalue the yuan, which the Treasury folks, in a semiannual report, called “unprecedented.” That may ...

April 20, 2014, 3:03 am, 1257899

An economist known for his pioneering work on bias in the news media won the John Bates Clark Medal on Thursday, one of the profession’s most prestigious honors.

Matthew Gentzkow, a professor at the University of Chicago’s Booth School of Business, was awarded the Clark medal by the American Economic Association, ...

April 20, 2014, 3:03 am, 1257893

The International Monetary Fund said South Korea’s won currency could be up to 8% undervalued and urged authorities to refrain from intervening in currency markets.

The fund, in a report released April 17 but based on an annual economic assessment last year, said South Korea’s large current-account surplus pointed to an ...

April 20, 2014, 3:03 am, 1257897

Money may not buy love, but it appears to buy years.

Economist Barry Bosworth at the Brookings Institution crunched the numbers and found that the richer you are, the longer you’ll live. And it’s a gap that is widening, particularly among women.

April 20, 2014, 3:03 am, 1257896

The Bank of Japan is hoping that a continued weak yen will put the brakes on Japan Inc.’s shifting of production overseas, a factor that has eaten into export volumes over recent years and stifled the beneficial impact of the weaker currency on export growth.

Even though the central ...

April 20, 2014, 3:03 am, 1257887

How much of a punch did the Federal Reserve’s easy-money policies pack?

Quite a wallop, two economists say in a new paper published Friday by the International Monetary Fund.

April 20, 2014, 3:03 am, 1257892

Large manufacturers are more confident about the U.S. economy’s future but less so about the global outlook, according to a survey released Thursday.

The first-quarter PwC Manufacturing Barometer, a survey of 61 U.S.-based multinational manufacturing executives done by professional services firm PwC, found 71% are optimistic about the U.S. economy’s prospects ...

April 20, 2014, 3:03 am, 1257888

Economy-watchers will have some breathing room in the coming week as the calendar thins out. Reports on the demand for housing and big-ticket items top the list of economic data scheduled for release in the week ending April 25. Here are five items to focus on:

#1: Home Sales May Still ...

April 20, 2014, 3:03 am, 1257886

President Barack Obama’s visit to Japan and other Asian countries next week is intended to provide further impetus to Pacific trade negotiations that have bogged down over disagreements with Tokyo.

April 20, 2014, 3:03 am, 1257889

The unemployment rate has fallen fast in the Carolinas. But the decline may not be the good omen it seems as the underlying reasons mirror broader trends that are causing some economists concern.

The Labor Department on Friday said South Carolina’s rate plunged 2.5 percentage points over the past year ...

April 20, 2014, 3:03 am, 1257891

A few words of caution for Matthew Gentzkow, professor at the University of Chicago’s Booth School of Business and the most recent winner of the John Bates Clark Medal: Young scholars can become less productive after winning prestigious awards.

Mr. Gentzkow on Thursday nabbed the coveted Clark medal as ...

April 20, 2014, 3:03 am, 1257890

Tough age-discrimination laws didn’t do much to help older unemployed men find work during and after the recession, according to a recent analysis from the Federal Reserve Bank of San Francisco.  It actually may have hurt them.

April 20, 2014, 12:04 am, 1257866

I am watchng the video of Paul Krugman on Bill Moyers. Mr. Krugman is seeing things about inequality that he hadn’t seen before Piketty’s book. So he is now seeing that inequality is a huge problem now and into the future. Inequality is the one major problem in the ...

April 19, 2014, 10:04 pm, 1257861
(Don Boudreaux)

In this video, Armen Alchian – one of history’s greatest economists – discusses one of the many areas in which he made several signature contributions: property rights.  (I don’t know the date on which Alchian sat down with Dan Benjamin to do this interview.  My guess is ...

April 19, 2014, 8:04 pm, 1257851
My regular column is available to subscribers on This is an excerpt. There are still nearly five months to go until the referendum on Scottish independence but the debate is definitely hotting up. The polls are getting more...

April 19, 2014, 6:04 pm, 1257849
(April 19, 2014 04:42 PM, by Scott Sumner) The New York Review of Books has a very interesting interview of George Soros. At one point he is asked about the recent revolution in the Ukraine. Here is part of his response, and then a follow-up question: [Soros] Contrary... (0 COMMENTS)

April 19, 2014, 5:33 pm, 1257848

The thousands of Milton and Rose Friedman fans out there will be happy to know about the Hoover Institution’s “Collected Works of Milton Friedman” project showcasing the lifetime work of Milton and Rose Friedman. Maybe “happy” would an ...

April 19, 2014, 4:04 pm, 1257840

Not a surprise to me but yikes nonetheless:

In the first comprehensive study of the DNA on dollar bills, researchers at New York University’s Dirty Money Project found that currency is a medium of exchange for hundreds of different kinds of bacteria as bank notes pass from hand to ...

April 19, 2014, 3:33 pm, 1257839

April 19, 2014, 3:33 pm, 1257838
Illinois is broke. Its public pension plans are the most troubled in the nation.

Illinois passed massive "temporary" tax hikes to fix the pension problem, but it did not make a dent in it. Now, Illinois politicians want still more tax hikes.

$100 Million for Barack Obama Library ...

April 19, 2014, 3:33 pm, 1257837

The Earth Day Network, the group that officially sponsors Earth Day annually, is a member of the Endangered Species Coalition, which promotes Endangered Species Day every year on May 18. That day is dedicated “to learn not only about the importance of biodiversity and how to protect ...

April 19, 2014, 3:03 pm, 1257830
This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for April 18, 2014.

Changes and comments from surferdude808:

An expected update from the OCC on its recent enforcement action activity contributed to a noticeable ...

April 19, 2014, 2:44 pm, 1257829

April 19, 2014, 2:44 pm, 1257828
The latest data from the Bureau of Labor Statistics shows an uptick in consumer price inflation for the month of March. Separately, estimates by the Cleveland ...

April 19, 2014, 2:34 pm, 1257827

Nate Silver nearly missed his flight on Friday so, as any self-respecting data nerd would do, he crunched the numbers to try to determine when the best time to fly might be:

The best time to ...

April 19, 2014, 2:04 pm, 1257825

April 19, 2014, 2:04 pm, 1257824

The latest numbers on 2014 taxes as share of income are out, and they’re saying pretty the same thing as last year:

Above about $80K a year in income, the American tax system is not really progressive. Like, at all:

The ...

April 19, 2014, 2:04 pm, 1257823

I haven’t beaten the drum lately for Lane Kenworthy — perhaps the best researcher out there on the economic effects of income and wealth distribution. His years of careful, diligent (and voluminous) statistical and analytic work, tapping the best data sets available, and his cogent, coherent explanations of his findings, ...

April 19, 2014, 1:33 pm, 1257821

It’s Easter weekend and time to do an annual update on the falling inflation-adjusted price of eggs over the last 120 years or so. The top chart above shows the real, inflation-adjusted ...

April 19, 2014, 1:23 pm, 1257820
Here are some notes taken from the recent RES panel event on the African economy

April 19, 2014, 1:03 pm, 1257819

Dan Little:

The near future: There is a lot going on in America and the world today: climate change, increasing separation between the rich and the non-rich, entrenched poverty in cities, continuing effects of racism in American life, and a rising level of political extremism in this country and ...

April 19, 2014, 12:34 pm, 1257818

With newspaper circulation, and more importantly advertising revenue, continuing to plummet due largely to the rise of online and other alternative sources of information, newspaper companies have responded by adding paywalls requiring people to subscribe in order to read ...

April 19, 2014, 12:04 pm, 1257814
(April 19, 2014 12:55 PM, by David Henderson) When I figured out my basic political beliefs at ages 17 and 18, I didn't know the term for them. Katherine George, a left-wing sociology professor at the University of Winnipeg with whom I was arguing, called me a libertarian.... (2 COMMENTS)

April 19, 2014, 11:33 am, 1257812

The thousands of Milton and Rose Friedman fans out there will be happy to know about the Hoover Institution’s “Collected Works of Milton Friedman” project showcasing the lifetime work of Milton and Rose Friedman. Maybe “happy” would an ...

April 19, 2014, 10:44 am, 1257801

April 19, 2014, 10:44 am, 1257800

April 19, 2014, 10:36 am, 1257799

Whilst I was gardening this morning, I wondered whether Labour is right to spend big money hiring David Axelrod as a campaign advisor.

The question arises because in gardening, context matters. The point isn't simply to find good plants, but to put ...

April 19, 2014, 10:04 am, 1257794

Paul Krugman has a post talking about how tighter monetary policy caused Sweden to go into deflation. Here is the chart showing their deflation.

OK… we can see the deflation there far to the right. Paul Krugman talked about ...

April 19, 2014, 9:33 am, 1257792

Well the price of gasoline just spiked upwards across Canada and the usual media analysis has begun. Five key reasons were summarized as follows by Shawn McCarthy in the Globe and Mail: 1) Approach of the summer driving season leading to a switch to summer ...

April 19, 2014, 9:03 am, 1257767
The key reports this week are March Existing Home Sales on Tuesday and March New Home sales on Wednesday.

For manufacturing, the April Richmond and Kansas City Fed surveys will be released.

----- Monday, April 21st -----
8:30 AM ET: Chicago Fed National Activity Index for March. ...

April 19, 2014, 8:36 am, 1257766
● Risk Savvy: How to Make Good Decisions By Gerd Gigerenzer Summary via publisher, Viking In the age of Big Data we often believe that our predictions about the future are better than ever before. But as risk expert Gerd … Continue reading →

April 19, 2014, 8:04 am, 1257765

After he won the Nobel, Tom Sargent was “interviewed” in an ad for Ally bank in which his response was simply (and correctly), “no.” The joke is even better than I realized because Sargent has a history of giving very short speeches. In 2007 he gave a graduation ...

April 19, 2014, 8:04 am, 1257764
(Don Boudreaux)

An excellent test of whether or not someone does or does not grasp the core Hayekian wisdom is supplied by his or her response to this passage found in yesterday’s New York Times:

“We understand that we doctors should be and are stewards of the larger society as ...

April 19, 2014, 8:04 am, 1257763
(Don Boudreaux)

… is from page 168 of 2006 Nobel laureate Edmund Phelps’s 2013 book, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change; in this passage Phelps discusses “corporatist” economic and political notions that dominated continental Europe for much of the 20th century (and that continues to this ...

April 19, 2014, 7:33 am, 1257762

April 19, 2014, 5:33 am, 1257758

I really don't want to know. But in case you do.

April 19, 2014, 5:23 am, 1257757
Government failure and the harm it can wreak on local communities is evident in this short piece from the New York Times

April 19, 2014, 5:23 am, 1257756
Private capital flows are now much bigger than traditional aid and there has been a geographical shift in where the world's poorest people live. This OECD video provides some useful background on these important changes as we head towards changes to post-2015 development goals.

April 19, 2014, 5:03 am, 1257747

April 19, 2014, 3:23 am, 1257745
A revision presentation used at the workshop in Dubai on aspects of supply-side competitiveness in the UK economy

April 19, 2014, 3:23 am, 1257744
Here is an example of a product which has important market failure implications. BBC Newsnight investigates the open sale of legal highs - not approved for human consumption - but which are a growing presence even on mainstream high streets.

April 19, 2014, 3:23 am, 1257743
Tanzanian cola producers are taking on Coca Cola and making headway in the battle for market share. Despite economic growth, there is a fragile middle class vulnerable to changes in world commodity prices and unstable employment and wages. This opens up an opportunity for indigenous food and drinks manufacturers who ...

April 19, 2014, 3:23 am, 1257742
Nominal weekly wage growth is now running at approximately the same pace as consumer prices inflation hinting that a long period of declining real wages might be coming to an end. The precise measurement of whether real wages are no longer falling is open to doubt, what matters more is ...

April 19, 2014, 2:04 am, 1257731

Foreign individuals and businesses long ago cut back on their purchases of U.S. bonds. Their place was taken by foreign central banks. The central banks simply created money in their own currency and used it to buy our bonds.

The Federal Reserve always knew that we couldn’t rely on foreign central ...

April 19, 2014, 2:04 am, 1257730

Here is BP, on New Zealand:

New Zealand has a chronic shortage of equity capital, exacerbated by a generous pay-as-you-go state pension and a tax system that favours passive landholding as a wealth accumulation vehicle. The country consequently imports a large amount of capital to meet the savings-investment ...

April 19, 2014, 2:04 am, 1257729

I just watched the debate between Mark Thoma and Steve Williamson. (youtube video) As I see it, the main issue was the direction of causality in the Fisher equation. In the end, I agree with Mr. Williamson.

The basic Fisher equation is…

Real ...

April 19, 2014, 1:23 am, 1257728

Stocks & Industries

Invest In Stubs, Spin-Offs And Liquidations For Alternative Returns Cites a Gabelli article $$ Apr 19, 2014Real Estate Management Better Than Owning Real Estate? Sometimes yes, sometimes no. Definitely adds more leverage $$ Apr 19, 2014Wells Fargo Securities Lending Lawsuit Ends in Settlement Low margin business that can go badly wrong in ...

April 19, 2014, 12:34 am, 1257721

The economic success of the West and of free economies everywhere stems from the acceptance within many societies (to varying degrees) that individuals are all equal in the right to own property and exercise freedom from the collective. States, on the other hand, ...

April 19, 2014, 12:04 am, 1257720
(April 19, 2014 12:00 AM, by Bryan Caplan) This Tuesday, Reason is hosting a DC debate on "Should America Open Its Borders?" Cato's Alex Nowrasteh and I say yes; the Center for Immigration Studies' Mark Krikorian says no.The Center for Immigration Studies' masthead reads, "Low-Immigration, Pro-Immigrant." I've dissected... (1 COMMENTS)