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.


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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August 30, 2015, 7:33 pm, 1536412

Wisconsin Governor and potential presidential candidate Scott Walker apparently thinks it is not an unreasonable idea to consider building a wall between Canada and the United States in order to secure his country’s borders from security threats.  Now, to be fair, he did not say that a wall ...

August 30, 2015, 6:04 pm, 1536409

August 30, 2015, 5:33 pm, 1536408

August 30, 2015, 4:34 pm, 1536403

The prophet Elijah’s most famous forecast (I Kings 18:44) – the sudden storm, deduced from inconspicuous change, that ended a three-year drought – became a cliché in business journalism in the 1970s, as one industry after another was overtaken by rapid change that it hadn’t anticipated. There were no ...

August 30, 2015, 4:04 pm, 1536400
(August 30, 2015 04:50 PM, by David Henderson) In a response to, I think, me, although he doesn't make it clear whether he's responding to me, Robert P. Murphy writes: I realized from Levi's comment that people are genuinely misunderstanding what I was trying to say in that... (0 COMMENTS)

August 30, 2015, 3:33 pm, 1536396
In spite of the recent plunge on the Shanghai index, as recently as August 24, CALL options on the index were more expensive than PUT options.

This Bloomberg headline "If the Options Market Is Right, China's Stock Rescue Is Doomed" reads like something one would find in ...

August 30, 2015, 3:33 pm, 1536395
Paul Romer has posted an important blog post on the urbanization process.  In the case of the nation of Colombia, he seeks to help the leaders of this urbanizing nation to create the necessary conditions to have productive and "livable" future cities.  Rather than embracing a "Soviet Style" deterministic ...

August 30, 2015, 3:03 pm, 1536390

U.S. oil production has begun to drop in response to low oil prices, but not as dramatically as many had anticipated.

Oil companies have cut back spending significantly in response to the fall in the price of oil. The number of rigs that are active in the main U.S. ...

August 30, 2015, 2:04 pm, 1536389

A mistake by representatives of the Business Loop 70 Community Improvement District means a sales tax increase the district needs to thrive will require approval by a single University of Missouri student.

On Feb. 28, Jen Henderson, 23, became the sole registered voter living within the community improvement district, or CID, ...

August 30, 2015, 1:03 pm, 1536371


'Is China's Devaluation a Game Changer'

If you can't get enough on China, here's more from Cecchetti & Schoenholtz:

Is China's devaluation a game changer?: Since 1978, China has engaged in an unprecedented and wildly successful experiment, moving gradually from a command economy to one based on markets; in small ...

August 30, 2015, 1:03 pm, 1536370
The automakers will report August vehicle sales on Tuesday, Sept 1. Sales in July were at 17.5 million on a seasonally adjusted annual rate basis (SAAR), and it appears sales in August will be over 17 million SAAR again.

Note:  There were 26 selling days in August, down from ...

August 30, 2015, 12:04 pm, 1536368

One of my web searches turned up a study from Trinity College’s American Religious Identification Survey (ARIS) on the demographics of Mormons. According to the ARIS study, there are now 150 Mormon women for every 100 Mormon men in the state of Utah—a 50 percent oversupply of women.

The ...

August 30, 2015, 11:33 am, 1536366

Since 1978, China has engaged in an unprecedented and wildly successful experiment, moving gradually from a command economy to one based on markets; in small steps transforming a system where administrators controlled the goods that were produced to one where prices allocate resources. There were surely miscalculations along the way. ...

August 30, 2015, 8:04 am, 1536336
(August 30, 2015 07:18 AM, by Alberto Mingardi) Tim Sablik has an interesting literature review on secession on the Richmond Fed's "EconFocus." Sablik presents research relevant to the issue, including Alesina and Spolaore and Buchanan and Faith. He also deals with contemporary secessionist communities - like Catalonia and... (0 COMMENTS)

August 30, 2015, 8:04 am, 1536335
(Don Boudreaux)

… is from page 144 of William Marina’s 1972 essay “Egalitarianism and Empire,” which is reprinted as Essay Four in ...

August 30, 2015, 7:33 am, 1536333

I can't vouch for all of it, but taken at face value, there's a bunch of stuff here I certainly didn't know.

August 30, 2015, 6:44 am, 1536301

Economists have been exploring the relationship between prosperity and trust since the 1950s. This column explores the possible relationships, arguing that enhanced economic prosperity acts as a signal that fellow citizens are trustworthy. The more optimistic assessment then breeds trust among individual citizens. This theory suggests the possibility of a ...

August 30, 2015, 5:33 am, 1536300

August 30, 2015, 5:03 am, 1536281

August 30, 2015, 5:03 am, 1536280

Daniel Little:

The case for realism in the social realm, Understanding Society: The case for scientific realism in the case of physics, microbiology, and chemistry is a strong one. The theories of physics, biology, and chemistry postulate unobservable entities, forces, and properties. These hypotheses are specified in a fair ...

August 30, 2015, 4:04 am, 1536279
My regular column is available to subscribers on This is an excerpt. It has been a nasty scare, and it is not yet over. Though I think they are overstated, the doubts about China will persist. Though the...

August 30, 2015, 3:23 am, 1536277

Photo Credit: Luz Bratcher

Imagine that you are in the position of a high cost crude oil producer that has a lot of debt to service.  The price that you can sell your oil for is high ...

August 30, 2015, 2:44 am, 1536254

Early school leaving and criminal behaviour are important social problems. This column argues that delinquency and arrests both lead to early school leaving. The findings show that the overall reduction in education due to delinquency is at least as large as the reduction due to arrest. Crime prevention efforts thus ...

August 30, 2015, 2:04 am, 1536252

1. I do not know what the Fed should do, and I do not know what the Fed will do.  I don’t even like that phrase “should the Fed tighten?,” but the superior “what kind of multi-dimensional expectational monetary path should the Fed indicate?” is awkward.

2. Starting in 2008, I ...

August 30, 2015, 1:33 am, 1536251
Simon Wren-Lewis has a nice post discussing Paul Romer’s critique of macro.

In Simon's words:

"It is hard to get academic macroeconomists ...

August 29, 2015, 10:44 pm, 1536240
The Democratic National Committee is offering all sorts of perks at next year's presidential nominating convention in Philadelphia in return for whopping contributions.

August 29, 2015, 6:04 pm, 1536229
(Don Boudreaux)

Pardon me for here largely repeating what has been said elsewhere about asking those people to put their own money where their ...

August 29, 2015, 5:33 pm, 1536227
The Risky Business Project is not a Tom Cruise vehicle.  Instead, it is a group of talented people who are deeply worried about the consequences that climate change will pose. This group has now released a new book.  Here is its Amazon webpage.    The authors provide a ...

August 29, 2015, 5:33 pm, 1536226

While at the Minnesota State Fair yesterday, I visited the display of “drop homes” that are manufactured in Minneapolis by “Next Door Housing” (see photo above), and available for short or long term rental ($900-$1,200 per month), or for purchase (starting at about ...

August 29, 2015, 5:03 pm, 1536217
This is an unofficial list of Problem Banks compiled only from public sources.

Here is the unofficial problem bank list for August 2015.

Changes and comments from surferdude808:

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

August 29, 2015, 4:44 pm, 1536216

August 29, 2015, 4:04 pm, 1536215

Claire Messud on Elena Ferrante in the FT:

…the novelist remains true to her broadest undertaking: to write, with as much honesty as possible, the unadorned emotional truths of Elena Greco’s life, from timid peasant schoolgirl to respected literary icon, riven always between her origins and her ambitions, between ...

August 29, 2015, 3:33 pm, 1536212
Still "Too Early"

After all the hemming and hawing by nearly every Fed governor, and despite the fact the Fed has to do something in just over two weeks, the Fed still does not know what to do.

Speaking in Jackson Hole Fed governor Stanley ...

August 29, 2015, 3:03 pm, 1536183

[A speech by Stanley Fischer at Jackson Hole turned into a pretend interview]

Hello, and thank you for talking with us.

 Let me start by asking if you feel like it gives the Fed a bad image to have a conference in an elite place like Jackson Hole. Why not ...

August 29, 2015, 2:04 pm, 1536181

August 29, 2015, 2:04 pm, 1536180
(Don Boudreaux)

Ten years ago today, residents of my home town, New Orleans, and its suburbs suffered death and devastation caused by ...

August 29, 2015, 12:04 pm, 1536167
(August 29, 2015 10:12 AM, by Scott Sumner) I hope the title of this post has caught your attention---if not please reread it. In the previous few recessions, the consensus of economists did not even forecast a recession until it was already underway. That is, not only can... (2 COMMENTS)

August 29, 2015, 11:33 am, 1536166
Social learning is an important and interesting research and policy subject.  Suppose a big city mayor implements road pricing to mitigate the traffic congestion externality. Once this policy succeeds, do other mayors notice?  Does this success story nudge the other mayors to imitate the first mayor and introduce this pareto ...

August 29, 2015, 10:04 am, 1536130

Khadija Ismayilova, an Azerbaijani journalist working for the congressionally funded Radio Free Europe/Radio Liberty, has been sitting behind bars in Baku since December and faces up to 19 years in prison.

With the number of journalists jailed around the world surging, a case like hers hardly seems like news these ...

August 29, 2015, 9:33 am, 1536127

I normally stay out of politics on this blog. But with the upcoming election, the political conversation on fiscal policy is starting to get stupid. In particular, for Paul Martin to accuse Stephen Harper of being the "King of deficits" was really stupid.

Is there anything Stephen Harper could have done ...

August 29, 2015, 9:33 am, 1536128

Well it is just over two weeks since I began tracking the number of Twitter followers that each federal party leader has during the course of the current election capmpaign in order to see what the impact of this type of social media presence might be.  All of the party ...

August 29, 2015, 9:03 am, 1536102
The key report this week is the August employment report on Friday.

Other key indicators include the August ISM manufacturing index and August vehicle sales, both on Tuesday, and the July Trade Deficit on Thursday.

----- Monday, August 31st -----
9:45 AM: Chicago Purchasing Managers Index for August. ...

August 29, 2015, 8:34 am, 1536101
â—Ź Making Sense of Markets: An Investor’s Guide to Profiting Amidst the Gloom By Kevin Gardiner Summary via publisher (Palgrave Macmillan) Making Sense of Markets argues that received wisdom is still far too pessimistic, and that investment opportunities have been missed as a result. It suggests that the great panic ...

August 29, 2015, 8:04 am, 1536097
(Don Boudreaux)

… is from page 154 of Deirdre McCloskey’s brilliant 1990 book, If You’re So Smart: The Narrative of Economic Expertise:

Clergymen ...

August 29, 2015, 7:33 am, 1536096

I kinda think that unless he's a criminal, if he wants to get in that badly, let him in.

August 29, 2015, 5:33 am, 1536081

Short version: that's what you have a liver and kidneys for.

August 29, 2015, 3:23 am, 1536067

Photo Credit: Dr. Wendy Longo || This horizon is distant…

I ran across two interesting articles today:

Volatility Doesn’t Equal Loss—Unless You Sell from Oppenheimer Funds, andBuying the Dips Doesn’t Work ...

August 29, 2015, 3:03 am, 1536054

August 29, 2015, 2:04 am, 1536052

Here is the academic paper, by William Easterly, and Laura Freschi, and Steven Pennings:

Economic development is usually analyzed at the national level, but the literature on creative destruction and misallocation suggests the importance of understanding what is happening at much smaller units. This paper does a development case ...

August 29, 2015, 2:04 am, 1536051

There is a new opinion of sorts:

The Democratic Party platform now calls for a $15 per hour national minimum wage for all hourly workers after delegates voted in an amendment proposed by progressive activists during the Democratic National Committee Meeting here on Friday.

The pointer is from