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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January 23, 2017, 7:33 pm, 1712930

According to Team Trump’s website, we’re told that “blue-collar towns and cities have watched their factories close and good-paying jobs move overseas, ...

January 23, 2017, 7:03 pm, 1712912

Earlier this month I highlighted a potential tax compromise brewing in Illinois. State senate Republicans and Democrats released a proposal to increase Illinois’s individual income tax and corporate income tax, expand the state’s Earned Income Tax Credit, and create a statewide sugary beverage tax, among other things. The ...

January 23, 2017, 7:03 pm, 1712911
From Matthew Graham at Mortgage News Daily: Mortgage Rates Erase Last Week's Losses

Mortgage rates fell somewhat significantly today, fully offsetting last week's rise. Specifically, today's average rates are back in line with those seen on Friday ... 4.125% is back in play, now sharing relatively equal territory ...

January 23, 2017, 6:04 pm, 1712910
(Don Boudreaux)

Here’s a letter to a Cafe Hayek reader:

Mr. Glen W____

Mr. W____:

Thanks for your e-mail.

You are correct that under ...

January 23, 2017, 6:04 pm, 1712909

Our economic policy with regard to China has been wrong for almost 20 years. We were wrong in the late 1990s to believe that the Chinese Communist Party was committed to pro-market reform for the long term. We were wrong in the mid 2000s to discourage the U.S. government from ...

January 23, 2017, 5:03 pm, 1712877

Frequent travelers are painfully familiar with the high taxes that many localities and special tax districts levy on rental cars. Many can recall at least one instance when the tax burden rivaled or even exceeded the cost of the car itself. Even by these standards, however, Chicago is an ...

January 23, 2017, 5:03 pm, 1712876
Just noting these goals for future reference. Based on demographics, I think 2.5 million jobs per year is too high. On GDP, now that the prime working age group is increasing again (by about 0.5% per year), I'd expect some pickup in GDP growth. To average ...

January 23, 2017, 4:34 pm, 1712875

By James Kwak

Economism—the simplistic, unreflecting application of Economics 101 models to complex, real-world issues—is particularly influential in the law, including both legal academia and actual court opinions that decide important questions.

The "economism" that @jamesykwak talks about is at its worst in the legal profession:

— Noah ...

January 23, 2017, 4:04 pm, 1712872

San Francisco, population 865,000, has roughly the same number of dogs as children: 120,000. In many areas of the city, pet grooming shops seem more common than schools.

There is also this:

San Francisco’s public school system has around 53,000 students, a sharp drop from 90,000 in ...

January 23, 2017, 4:04 pm, 1712871
(Don Boudreaux)

… is from page 375 of the American economist Frank Knight‘s 1944 article “Human Nature and World Democracy,” ...

January 23, 2017, 4:04 pm, 1712870

Abstract: This paper examines, individually and jointly, an excise tax on carbon and an expansion of EITC benefits to childless workers. We estimate how an illustrative tax of $32 per ton of CO2 from fossil fuel combustion would burden households differentially across the income distribution, how it could affect worker benefits ...

January 23, 2017, 3:33 pm, 1712866

According to Wired:

AT 10 AM the Saturday before inauguration day, on the sixth floor of the Van Pelt Library at the University of Pennsylvania, roughly 60 hackers, scientists, archivists, and librarians were hunched over laptops, drawing flow charts on whiteboards, and shouting opinions on computer ...

January 23, 2017, 3:33 pm, 1712865

Speaking of data:

On February 22, 2013, the White House Office of Science and Technology Policy (OSTP) directed federal agencies that conduct research to develop plans ensuring peer-reviewed publications in scientific journals and related digital scientific research data resulting from federally-funded scientific research are accessible to the public. ...

January 23, 2017, 3:03 pm, 1712834

How will Trump handle bad news?:

Things Can Only Get Worse: ...Donald Trump ... spent his first full day in office having a temper tantrum, railing against accurate reports of small crowds at his inauguration..., how is he going to react to disappointing numbers about things that ...

January 23, 2017, 2:44 pm, 1712833
One of Donald Trump's signature campaign promises is a 4 percent growth rate for real GDP. During his confirmation hearings, Treasury secretary designate Steven Mnuchin scaled ...

January 23, 2017, 2:04 pm, 1712832

January 23, 2017, 2:04 pm, 1712831

January 23, 2017, 2:04 pm, 1712830
(January 23, 2017 01:13 PM, by Bryan Caplan) At this year's 10th Anniversary Students for Liberty conference, I'm debating Will Wilkinson on, "Should libertarians support a Universal Basic Income?" My answer is an emphatic no. Not only libertarians but liberals, conservatives, and reality-based socialists should oppose this populist... (1 COMMENTS)

January 23, 2017, 2:04 pm, 1712829

January 23, 2017, 2:04 pm, 1712828

Sixteen years after 9/11, much of the world seems to be teetering on the brink of disorder. Much of it, that is, except the Indo-Pacific region. Amid apocalyptic devastation in Syria, ongoing Russian aggression in Ukraine, and the specter of a nuclear-capable Iran, a global observer may be forgiven for ...

January 23, 2017, 2:04 pm, 1712827

Inauguration Day has finally come and gone, and now the hard work of governing begins. How should Donald Trump and his administration meet the challenges ahead? We have gathered a small selection of AEI scholars’ work in alpha order on a variety of issues, foreign and domestic, addressing some ...

January 23, 2017, 1:34 pm, 1712823

Paul Samuelson said (PITA gated) that David Hume's price-specie flow mechanism (ungated) was wrong. And I am saying, nervously biting my fingernails, that Samuelson was wrong.

Assume that durable sailing ships are costly to build, but have low (or zero for simplicity) operating ...

January 23, 2017, 1:33 pm, 1712822
From the WSJ moneybeat blog:

China’s central bank extended support on Friday to a group of unnamed but large banks... the People’s Bank of China extended a longer-term but temporary liquidity facility... Details on the facility were typically vague. In recent weeks it has also injected record ...

January 23, 2017, 1:23 pm, 1712821

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As measured by the Atlanta Fed's Wage Growth Tracker, the typical wage increase of a U.S. worker ...

January 23, 2017, 1:03 pm, 1712790
From the National Multifamily Housing Council (NMHC): Apartment Markets Soften in the January NMHC Quarterly Survey

— Apartment markets continued to retreat in the January National Multifamily Housing Council (NMHC) Quarterly Survey of Apartment Market Conditions. All four indexes of Market Tightness (25), Sales Volume (25), Equity Financing (33) ...

January 23, 2017, 12:34 pm, 1712789
A A Tags Home | Feed | Blog.rssFree MarketsFree Trade versus "Free Trade"Interventionism

January 23, 2017, 12:34 pm, 1712788

The last two decades have been a rare period of rapid convergence for the world's developing economies. Everyone is familiar with China and India's experience, but growth went beyond these two large economies. Many countries in Sub-Saharan Africa and Latin America had their best performance in decades, if ...

January 23, 2017, 12:04 pm, 1712785
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

You report that “President Donald Trump said Monday that the U.S. will impose a ‘very ...

January 23, 2017, 12:04 pm, 1712782

The final IES report on the School Improvement Grant program is devastating to Arne Duncan’s and the Obama administration’s education legacy. A major evaluation commissioned by the U.S. Department of Education and conducted by two highly respected research institutions delivered a crushing verdict: The program failed and failed ...

January 23, 2017, 12:04 pm, 1712783

While the OPEC deal gave a year-end rally to oil prices after a turbulent year, depressed prices are likely to continue to be the new normal for 2017. This New Year will be a better one than 2016, but only by a small degree.

With midterms on the horizon, President Donald Trump ...

January 23, 2017, 12:04 pm, 1712784

This morning, as I watch Donald Trump standing on the steps of the Capitol taking the oath of office as the next president of the United States, one thought will be going through my mind:

There, but for the grace of God, goes Hillary Rodham Clinton.

Yes, there are many reasons to ...

January 23, 2017, 12:04 pm, 1712781

This is the first in a series of blog posts on paid family leave jointly sponsored by AEI and Brookings.   Aparna Mathur at AEI ...

January 23, 2017, 12:04 pm, 1712778

In a thoughtful essay published today by The Federalist, Senator Mike Lee, Republican of Utah, outlines a vision for tax reform:

Tax reform should not be about accepting the broken status quo, and just skimming off the top of the global economy for political redistribution. President Obama tried that. ...

January 23, 2017, 12:04 pm, 1712779


This paper presents early evidence on the employment effects of state minimum wage increases enacted between January 2013 and January 2015, and offers an interpretative framework to understand why it is of interest to study recent changes in isolation. Given the ongoing transitions of many states’ minimum wage rates, we ...

January 23, 2017, 12:04 pm, 1712780
This AEI/Brookings joint blog series will help us better inform policymakers of the practical day-to-day realities of living in a country where millions lack access to paid leave at the birth of a child or to meet other caregiving needs.

January 23, 2017, 11:33 am, 1712777

There is theory to suggest that constraints on economic activity (e.g., regulations) will reduce economic activity. But, in a very large and dynamic macroeconomy, the negative impacts are likely to be small. From Jaffe et al. (1995) in the Journal of Economic Literature:

More than two decades ago, the first Earth ...

January 23, 2017, 11:03 am, 1712746
From Black Knight: Black Knight Financial Services’ First Look at December 2016 Mortgage Data

• The inventory of loans in active foreclosure nationwide declined by more than 200,000 in 2016

• Delinquencies were down 0.91 percent from November 2016 and 7.5 percent from December 2015


January 23, 2017, 10:44 am, 1712745
This e-book is the first in a series of three examining the shadow that history casts over various aspects of the economy and the polity. In particular this volume summarises some influential works from this vibrant new research agenda and discusses the impact they have on our understanding of the long-run influence ...

January 23, 2017, 10:44 am, 1712744
Over the past decades, economists working on growth have ‘rediscovered’ the importance of history, leading to the emergence of a vibrant, far-reaching inter-disciplinary stream of work.  This column introduces a new eBook in three volumes which examines key themes in this emergent literature and discusses the impact they have on ...

January 23, 2017, 10:44 am, 1712743

Not a moment too soon, Princeton University Press has just released Fraud: An American History from Barnum ...

January 23, 2017, 10:34 am, 1712742

January 23, 2017, 10:04 am, 1712738
(January 23, 2017 09:25 AM, by Scott Sumner) Commenter Bill directed me to an interesting Ben Bernanke post: As a general matter, Fed policymakers view economic or policy developments through the prism of their economic forecast. Developments that push the forecasted path of the economy away from the... (1 COMMENTS)

January 23, 2017, 10:04 am, 1712736
(Don Boudreaux)

Several people have written to me over the past 24 hours to accuse me of credulity for writing the following words in ...

January 23, 2017, 10:04 am, 1712737
(Don Boudreaux)

… is from page 2 of Robert C. Allen’s 2011 book, Global Economic History:

January 23, 2017, 10:04 am, 1712734

Recently North Korean leader Kim Jong-un claimed that his forces are preparing an intercontinental ballistic missile (ICBM) test – a capability that, ...

January 23, 2017, 10:04 am, 1712735

Gender scholars like bell hooks argue that American is an imperialist, white-supremacist, capitalist patriarchy. Is she right? The Factual Feminist responds.

January 23, 2017, 10:04 am, 1712732

In case you were busy with the inauguration, the world dodged a bullet Friday. There was a dark cloud of mystery over whether China would achieve its target of at least 6.5% GDP growth for 2016.

If growth had been announced at 6.4% or, heaven forbid, 6.3%, the consequences for global ...

January 23, 2017, 10:04 am, 1712731

Donald Trump’s inauguration unquestionably heralds a rejuvenated US-UK Special Relationship. His view of America’s international role requires it, featuring, for example, reversing Barack Obama’s disdainful relegation of Britain to “the back of the queue” for trade negotiations after leaving the EU. Symbolically, mere hours after taking the constitutional oath, President ...

January 23, 2017, 10:04 am, 1712733

My many health sector friends often ask me why I occasionally write about tobacco. Critically discussing policy and highlighting the economic issues raised by tobacco control is enough to set off their nervous ticks. The main reason I write about it is that health policy is often based on intentions rather than ...

January 23, 2017, 9:33 am, 1712729

Mankiw's title is quaint, given that we are now aware of "alternative facts.":

Readers of this blog will surely want to know about a new website:, non-partisan publication designed to bring key facts and incisive analysis to the national debate on economic and social policies. It is written by ...

January 23, 2017, 9:33 am, 1712728

“Bitcoin is the currency of the Internet: a distributed, worldwide, decentralized digital currency. Unlike traditional currencies such as dollars, bitcoins are issued and managed without any central authority whatsoever: there is no government, company, or bank in charge of Bitcoin. As such, it is more resistant to wild inflation and ...

January 23, 2017, 8:34 am, 1712696

Global markets traded in a tight range last week, based on a set of exchange-traded products representing the major asset classes. The subdued trading ended the week through Jan. 20 with a new US President and prices that were little changed from the previous week’s close.

Foreign ...

January 23, 2017, 8:04 am, 1712695

As someone who has written about FDA reform for many years it’s gratifying that all of the people whose names have been floated for FDA Commissioner would be excellent, including Balaji Srinivasan, Jim O’Neill, Joseph Gulfo, and Scott Gottlieb. Each of these candidates understands two important ...

January 23, 2017, 8:04 am, 1712694
When Barack Obama became President, Republicans in Congress pledged to oppose him tooth and nail. That was a bad idea. It implied that they were hoping the President would fail. This implies one of two things: either they wished ill for the country, or they were completely convinced that Obama ...

January 23, 2017, 7:33 am, 1712691

The huge--mostly Liberal--bureaucracy aka "The Deep State".

But for some hope, see Richard Epstein, "A Revolution In Administrative Law".

Related: "Donald Trump's 100 Day Executive Action Agenda".

January 23, 2017, 7:33 am, 1712689

January 23, 2017, 7:33 am, 1712690

Worth remembering in discussions about gun control: ". . .the general consensus is that somewhere between three and eight percent of gun crimes are committed with legally purchased and owned firearms."

January 23, 2017, 7:33 am, 1712688

Kevin D. Williamson reviews the claim that the Obama years were free of scandal.

The personal can be conceded: There is no serious allegation that President Obama suffered from the liberated appetites of a Bill Clinton, and the White House interns have by all accounts gone unmolested.

That ...

January 23, 2017, 7:33 am, 1712687

Megan McArdle:

. . . there is in this whole world no sight less rhetorically compelling than that of successful people with fun and rewarding jobs, and a decent income, complaining that they're victims of the unglamorous folks who labor at all the strenuously boring work required ...

January 23, 2017, 7:33 am, 1712686
John J. Conlon and Basit Zafar

While consumer confidence as measured by various surveys has increased sharply since the national election, the New York Fed's

January 23, 2017, 6:44 am, 1712655

How did heroin spread beyond big cities in America? What's the connection between heroin and America's opioid problem? Sam Quinones, author of Dreamland, talks with EconTalk host Russ Roberts about the explosion in heroin use and how one small ...

January 23, 2017, 5:33 am, 1712653

I wasn't worried about it, but in case you were . . .

Related: "Oxfam's upside down inequality study".

Fake news or not? You decide.

January 23, 2017, 5:03 am, 1712648

As far as the markets were concerned, Trump Inauguration Week, a.k.a. Week 3 of January 2017, was a really lackluster experience where the S&P 500 mainly drifted sideways.

January 23, 2017, 5:03 am, 1712647

January 23, 2017, 5:03 am, 1712646

Yuliya Baranova, Carsten Jung, and Joseph Noss at Bank Underground:

The tip of the iceberg: the implications of climate change on financialmarkets: There has been a recent increase in awareness of investors that limiting emissions to prevent climate change might leave a substantial proportion of the world’s ...

January 23, 2017, 4:44 am, 1712645
The British government and the EU face a difficult negotiation over the terms of Brexit. This column uses new data on the content of trade agreements to assess the trade impact of Brexit, identifying a tradeoff between the depth of the post-Brexit agreement and the intensity of future UK-EU trade. A ...

January 23, 2017, 2:34 am, 1712636
A A Tags Home | Feed | Blog.rssLegal SystemU.S. HistoryThe DEA: A Good Place to Cut the Federal BudgetPolitical Theory ...

January 23, 2017, 2:34 am, 1712635
A A Home | Feed | Blog.rssThe Bank of England and the ECB Have a Credibility Problem

January 23, 2017, 2:04 am, 1712634

J., a loyal MR reader, asked me for a post on “proliferation and separately nuclear exchange (war).”

Let’s try the latter.  Every now and then I ask myself what is the most likely use of nuclear weapons, putting aside dirty bombs from terrorists and the like.

My first pick is a ...

January 23, 2017, 12:44 am, 1712629

January 23, 2017, 12:04 am, 1712626

The debate over the effects of greenhouse emissions and policies to address them is intense, and the Trump administration clearly intends to moderate and reverse many of the regulatory initiatives the Obama administration implemented. One policy discussed broadly is a “carbon” tax on greenhouse gas emissions, as a substitute for ...

January 22, 2017, 10:44 pm, 1712617
Risk sharing across the Eurozone is well below the levels observed in other federations, including the US. This column argues that the US achieves more intensive risk sharing largely because of a more integrated financial market, and also that the contribution of public institutions to risk sharing is much higher ...

January 22, 2017, 10:04 pm, 1712616

Expect prolific and extensive citation of “alternative facts” going forward:

Source: Search term: “alternative facts”, Google Trends accessed 8:17 PM CST 1/22/2017.

Merriam-Webster has some thoughts on ...

January 22, 2017, 9:03 pm, 1712602
Menzie Chinn at Econbrowser recommends a new site: EconoFact

EconoFact is a non-partisan publication, online starting today, designed to bring key facts and incisive analysis to the national debate on economic and social policies. It is written by leading academic economists from across the country who belong to ...

January 22, 2017, 8:34 pm, 1712601

Presidencies are the most accessible narrative that Americans possess.  We habitually tell the story of the United States by connecting up administrations from George Washington to Barack Obama and beyond. But other frames can serve as well.

I’ve argued that Donald Trump’s victory was largely accidental, a combination of little-recognized trade ...

January 22, 2017, 8:04 pm, 1712599
Sarah Anderson and Scott Klinger of the Institute of Policy Studies released “Tale of Two Retirements”, a study discussing how well CEOs will retire in comparison to the low and middle income citizens who only have 401ks and Social Security to retire on in the US and what President-Elect Trump’s ...

January 22, 2017, 7:33 pm, 1712598
Here are the highlights of the discussion from a recent Brookings Panel on infrastructure investment. Harvard's Larry Summers and Ed Glaeser each made some important points but I side with Glaeser. Dr. Summers appears to view infrastructure as a Keynesian stimulus that is palatable to Republicans. I'm not ...

January 22, 2017, 7:23 pm, 1712597
President Trump is worried about the strong dollar:

In his interview with the Journal on Friday, Mr. Trump said the U.S. dollar was already “too strong” in part because China holds down its currency, the yuan. “Our companies can’t compete with them now because our currency ...

January 22, 2017, 5:03 pm, 1712588

Dani Rodrik:

Is Global Equality the Enemy of National Equality?: The question in the title is perhaps the most important question we confront, and will continue to confront in the years ahead. I discuss my take in this paper.

Many economists tend to be global-egalitarians and believe borders ...

January 22, 2017, 4:44 pm, 1712587
Reform of the corporate income tax is shaping up to be one of the big issues facing Congress in 2017. Republicans are pushing for big cuts in the corporate tax rate. Most observers seem to assume that conservatives and progressives will be at swords points over those ...

January 22, 2017, 4:04 pm, 1712581
(Don Boudreaux)

President Donald Trump

Mr. Trump:

I write to advise you to rethink your plan to have a wall along ...

January 22, 2017, 2:04 pm, 1712575

1. The culture that is Dutch first all-avocado restaurant to open in Amsterdam.

2. New blog, Political Arithmetick, high quality on economic stats and their meaning, by Brent Moulton.

3. “One of the Obama administration’s signature efforts in education, which pumped billions of federal dollars into overhauling ...

January 22, 2017, 2:04 pm, 1712574
(January 22, 2017 02:16 PM, by Scott Sumner) Last night I saw the sci-fi film "Arrival". (Spoiler alert.) At the beginning of the film, 12 alien spacecraft visit Earth, and there are attempts to communicate with the aliens. The film mostly takes place in Montana, where one of... (0 COMMENTS)

January 22, 2017, 1:03 pm, 1712568
From US hoteliers keep eye on dip in bookings from Europe

U.S. hoteliers have reported seeing a decline in bookings from European travelers heading into 2017 and are looking to explain what has caused the drop.

Possible factors include economic uncertainty in the continent, coupled with a ...

January 22, 2017, 12:04 pm, 1712565

January 22, 2017, 10:34 am, 1712555

The question in the title is perhaps the most important question we confront, and will continue to confront in the years ahead. I discuss my take in this paper.

Many economists tend to be global-egalitarians and believe borders have little significance in evaluations of justice and ...

January 22, 2017, 10:04 am, 1712551
(Don Boudreaux)

… is from page 9 of my great teacher Leland Yeager’s, and David Tuerck’s, superb 1966 book, Trade ...

January 22, 2017, 8:44 am, 1712539

(This is a joint post by Mark Weidemaier and Mitu Gulati)

We jointly teach a class on international debt, focusing on what happens when sovereign governments and the entities they control go bust. We love this class, because we work with our students to design a restructuring ...

January 22, 2017, 8:34 am, 1712538

Simon Kuper makes a good point: we need, he says, to “bore ourselves with important stuff.” This point generalizes beyond the context he discusses.

It’s true in investing. “Split your money between cash and tracker funds and then forget it” gets you at least four-fifths of ...

January 22, 2017, 7:34 am, 1712537

"Of course, the safest way to survive is to stay off unsafe ice!"

January 22, 2017, 7:33 am, 1712536
Readers of this blog will surely want to know about a new website:,a "non-partisan publication designed to bring key facts and incisive analysis to the national debate on economic and social policies. ...

January 22, 2017, 5:33 am, 1712525

A whole lot of pork. And where da chicken at?

January 22, 2017, 5:03 am, 1712522

January 22, 2017, 4:04 am, 1712521

That was my prediction in my forthcoming book The Complacent Class: The Self-Defeating Quest for the American Dream, but I didn’t realize it would come true on such a scale so soon.  Yesterday we saw the largest protests in American history.  Here is one excerpt passage from ...

January 22, 2017, 4:04 am, 1712520
My regular column is available to subscribers on This is an excerpt. Certainty and uncertainty. The certainty from Theresa May that Britain will be leaving the European Union’s single market is enabling some businesses to prepare now for...

January 22, 2017, 2:04 am, 1712509

Written by John Ferejohn and Frances McCall Rosenbluth, with the subtitle War, Peace, and the Democratic Bargain, this is a very important book.  Here is the main thesis:

If the modern democratic republic is a product of wars that required both manpower and money for success, it is time to ...

January 22, 2017, 12:44 am, 1712502
Thomas Schelling, game theorist and co-recipient of the 2005 Nobel Memorial Prize in Economic Sciences, passed away in December 2016 at the age of 95. This column explores how his lack of concern with professional methodological norms allowed him to generate new knowledge with great freedom, and to make innovations ...

January 22, 2017, 12:44 am, 1712501
The late Thomas Schelling’s 1960 classic, The Strategy of Conflict, opened up new vistas in the then emergent field of game theory. This personal tribute by a longstanding friend and colleague describes how Schelling’s creative and playful mind, his incredible breadth of interests, and his unparalleled mastery of strategic analysis ...