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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November 27, 2015, 6:04 pm, 1582904
(November 27, 2015 04:21 PM, by Scott Sumner) In the past I've been critical of Paul Krugman's approach to austerity and business cycles. For instance, he argued that austerity in the UK led to slow growth in real GDP. I countered that RGDP is not the right variable... (0 COMMENTS)

November 27, 2015, 5:03 pm, 1582876
The Case-Shiller house price indexes for September were released on Tuesday. Zillow forecasts Case-Shillera month early, and I like to check the Zillow forecasts since they have been pretty close.

From Zillow: Case-Shiller Forecast Calls for Similar Annual, Monthly Gains in October

The September S&P Case-Shiller ...

November 27, 2015, 3:03 pm, 1582838
The highlights of the week's economic calendar: Fed Chairwoman Janet Yellen on Wednesday and Thursday, followed by Friday's highly anticipated November jobs report.

November 27, 2015, 3:03 pm, 1582837

The rise of the crazies is not unrelated:

What Is Holding Back the Economy?: ...for many if not most people, the standard of living that can be achieved by working has been permanently reduced — by long bouts of unemployment and underemployment, by unstable and insecure employment, by long-term ...

November 27, 2015, 3:03 pm, 1582836

On student loans:

Student Debt in America: Lend With a Smile, Collect With a Fist: ... Borrowing is risky, financial decisions are not always rational, and people often do a poor job of properly weighing the interests of their present and future selves.

The private enterprise system is built to ...

November 27, 2015, 3:03 pm, 1582835

Today we have a guest contribution written by Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at Harvard University, and former Member of the Council of Economic Advisers, 1997-99. This post is an extended version of a column that appeared in Project Syndicate.

Calls for International ...

November 27, 2015, 2:34 pm, 1582834

Late on Wednesday, the family of football legend Frank Gifford, who died in August at the age of 84, revealed that a postmortem examination of the late football star’s brain revealed he suffered ...

November 27, 2015, 2:04 pm, 1582831
(November 27, 2015 03:19 PM, by David Henderson) In my Executive MBA economics class a little over a week ago, I presented the following definition of a negative externality: A cost borne by someone who is not party to the decision that caused the cost. Then I asked... (1 COMMENTS)

November 27, 2015, 1:33 pm, 1582828
Retailers, especially big-box retailers will be blue if light shopping carries over for the rest of the season. The Wall Street Journal reports Thinner Crowds on Black Friday.

Millions of Americans left their Thanksgiving meals to hit stores across the country in an annual shopping ritual, ...

November 27, 2015, 1:03 pm, 1582787
The automakers will report November vehicle sales on Tuesday, December 1st. Sales in October were at 18.1 million on a seasonally adjusted annual rate basis (SAAR), and it possible sales in October will be over 18 million SAAR again.

Note: There were 23 selling days in November, down from ...

November 27, 2015, 12:04 pm, 1582781

November 27, 2015, 12:04 pm, 1582780

I thought this was the worst year for movies since I have been watching them.  In fact I think you could multiply this year’s good films by two and still have the worst year for movies in a long, long time.  Maybe by three.  But here are the ones I ...

November 27, 2015, 12:04 pm, 1582779

November 27, 2015, 12:04 pm, 1582778
by New Deal democrat (Bondadd blog) One long term indicator changes to Yellow One long leading indicator has turned from green (positive) to yellow (caution): mortgage rates. Since middle class wages peaked in the 1970s, the ability to refinance debt at lower interest rates has been an important coping ...

November 27, 2015, 11:33 am, 1582777
The Pacific Ocean and blue skies and 70 degree weather are good stuff.

November 27, 2015, 10:04 am, 1582723

November 27, 2015, 9:33 am, 1582721
Noah Smith takes the standard course to task. David Henderson says, not so fast.

November 27, 2015, 9:03 am, 1582700

Today is Black Friday, 2015 - the proverbial day that, if you believe U.S. retailers, enough Americans turn out to the ...

November 27, 2015, 8:04 am, 1582699
(Don Boudreaux)

… is from page 62 of my late Nobel laureate colleague Jim Buchanan’s pioneering February 1962 article in Economica, ...

November 27, 2015, 7:23 am, 1582697
‘Coming up with something new is for suckers; smart people sit back and rip off the idea later’

November 27, 2015, 7:03 am, 1582688

November 27, 2015, 7:03 am, 1582687

A less than perfect union:

Europe the Unready, by Paul Krugman, Commentary, NY Times: Thanksgiving as we know it dates not to colonial days but to the middle of the Civil War, when Abraham Lincoln made it a federal holiday. It is, in other words, a celebration of national ...

November 27, 2015, 4:04 am, 1582669

Is it clever or stupid of us to be avoiding the problem of “overeducation” in our Army officer corps?

As shown previously, the higher an officer’s cognitive ability, the lower that officer’s chance at early promotion and battalion command selection. As a curious anecdote, the promotion rate to colonel for officers ...

November 27, 2015, 3:33 am, 1582666
In the wake of conflicting flight path information with Russian and Turkey differing on the flight path of the Russian aircraft that Turkey downed over Syria, comes the incredulous claim that Turkey did not recognize the aircraft as Russian when it shot the aircraft down.

This unbelievable statement comes ...

November 27, 2015, 2:04 am, 1582630

Following up on my earlier post on Syria, Alexander Burns sends me this very interesting email:

Dear Professor Cowen,

Thanks for your reply tweet regarding your Marginal Revolution post on modelling Syria / Islamic State. I enjoy your books and blog.

I’m writing a thesis at Australia’s Monash University that synthesises ...

November 27, 2015, 12:44 am, 1582620
Economists often disagree on China’s prospects. This column provides the results from a survey from the Centre for Macroeconomics. It turns out that three quarters of the experts believe that China’s annual growth rate will be less than 6% over the next ten years or so. But the panel is ...

November 27, 2015, 12:44 am, 1582619
Douglass North, economic historian and co-recipient of the 1993 Nobel Memorial Prize in Economic Sciences, passed away this week. This column pays tribute to one of the great social scientific pioneers of the modern era – focusing on one particular example of how North drew on historical, empirical and theoretical ...

November 27, 2015, 12:44 am, 1582618
Douglass C. North was among the most important and influential economic historians and economists of the late 20th century. This column highlights four of his major contributions: his pioneering work in quantitative economic history, or ‘cliometrics’; his similarly fundamental work using neoclassical economics to understand institutions; his critique of theory ...

November 26, 2015, 9:33 pm, 1582617

1. Chart of the Day I (above). Earlier this year, the city of Los Angeles passed the “Los Angeles Hotel Minimum Wage Ordinance,” which raised the city’s minimum wage for hotel workers to $15.37 an hour on July 1. According to BLS industry ...

November 26, 2015, 8:04 pm, 1582616
(November 26, 2015 07:21 PM, by Scott Sumner) A commenter named Ram left a brilliant comment over at TheMoneyIllusion. Here it is (emphasis added): I'd contend that the main problem in America is that the public, including its highly educated members, is social-scientifically ignorant. Most people I talk... (0 COMMENTS)

November 26, 2015, 4:04 pm, 1582589
(November 26, 2015 05:21 PM, by David Henderson) Economist Noah Smith has a recent article titled "Most of What You Learned in Econ 101 Is Wrong." He doesn't actually make the case that would support that title. But he also probably didn't choose the title. However, he did... (0 COMMENTS)

November 26, 2015, 1:34 pm, 1582576

The traditional student presentation format - ten minutes of powerpoint, two minutes of questions - rarely works well. After three or four presentations, a good chunk of the audience zones out. Getting a good discussion going is hard - and there isn't time for an extended conversation anyways. Then there ...

November 26, 2015, 12:44 pm, 1582548
Europe is experiencing an unprecedented inflow of immigrants. Casual observation suggests that far-right parties could benefit from voters’ worries about this inflow. This update to a column from September 2012 provides empirical evidence showing that the geographic proximity of immigrants is one important causal driver behind support for the far ...

November 26, 2015, 12:04 pm, 1582543

November 26, 2015, 12:04 pm, 1582542

So far this season, [Stephen] Curry has made 74 threes — the most in the NBA. Damian Lillard ranks second, with 45. To say that Curry is an outlier would be an insult to the word outlier. So far this season, 84 percent of NBA threes have come off assists. ...

November 26, 2015, 11:33 am, 1582540
Attitudes towards the EU have hardened in the wake of the ISIS attack on Paris. A new poll reveals Majority of UK Public Now Wants 'Brexit'.

More than half of the public now want to leave the European Union, according to an opinion poll for The Independent – ...

November 26, 2015, 11:03 am, 1582515

How did the turkey become the centerpiece for the United States' national dinner? Andrew F. Smith ...

November 26, 2015, 11:03 am, 1582514
A&E has a new reality show "illustrating the every day lives of individuals with Down Syndrome" that starts on December 9th. The show is called Born This Way!

One of the cast members is Steven Clark, the son of my college roommate.

I'm biased but I think Steven ...

November 26, 2015, 10:44 am, 1582513

Forgiving student loan debt for low-income Americans could reduce the racial wealth gap among those households by as much as 50%, according to a new report from Demos and the Institute on Assets and Social Policy. Abbye Jo Atkinson has just posted an interesting ...

November 26, 2015, 10:34 am, 1582512

In the 2009 Pre-Budget Report the Labour government proposed a rise in employers' National Insurance Contributions. David Cameron said the measure was a "jobs killer" andGeorge Osborne attacked it as a "tax rise on jobs" that "will stamp out the green shoots and kill ...

November 26, 2015, 10:04 am, 1582510
(November 26, 2015 11:13 AM, by David Henderson) Here's a Thanksgiving message from my 2001 book, The Joy of Freedom: An Economist's Odyssey, from a chapter titled "The Joy of Capitalism." I pointed out in Chapter 1 that British author Thomas Carlyle called economics "the dismal science" because... (0 COMMENTS)

November 26, 2015, 10:04 am, 1582509
by Joseph Joyce Dilemmas, Trilemmas and Difficult Choices In 2013 Hélène Rey of the London Business School presented a paper at the Federal Reserve Bank of Kansas City’s annual policy symposium. Her address dealt with the policy choices available to a central bank in an open economy, which she ...

November 26, 2015, 10:04 am, 1582508

November 26, 2015, 8:34 am, 1582473
The rumors are true–a long holiday weekend has been declared at the world headquarters of The Capital Spectator. After several days of feast and fête, the standard fare resumes on Monday, Nov. 30. Happy Thanksgiving!

November 26, 2015, 8:04 am, 1582472
(Don Boudreaux)

… is from John Stossel’s November 25, 2014, column, “This Thanksgiving, Be Grateful for Property Rights. The Pilgrims Nearly ...

November 26, 2015, 5:34 am, 1582420

. . . and they'll be no new posts until Monday.

(If you're disappointed about that, please note that this blog currently has over 17,000 posts and over 16,000 comments. Have you read them all?)

November 26, 2015, 5:03 am, 1582363

November 26, 2015, 4:04 am, 1582362

It costs $300 to move a 40-foot container from Rotterdam to Shanghai…Here’s some more context. Let’s say that you want to travel for a year; it’s cheaper to put your personal belongings in a shipping container as it sails around the world than to keep it at a local mini-storage ...

November 26, 2015, 2:44 am, 1582317
Some scholars view capital inflows as contractionary, but many policymakers view them as expansionary. Evidence supports the policymakers. This column introduces an analytic framework that knits together the two views. For a given policy rate, bond inflows lead to currency appreciation and are contractionary, while non-bond inflows lead to an ...

November 26, 2015, 2:44 am, 1582316
Not much is known about the drivers of gender diversity in monetary policy committees. This column presents new research suggesting that gender preferences may be endogenous with respect to the overall structural and institutional settings. Higher female representation is associated with higher levels of central bank independence and lower involvement ...

November 26, 2015, 2:44 am, 1582315
Seven years after its crisis, Iceland has staged an economic recovery. This column suggests that despite its overall success, the current economic situation in Iceland is not devoid of problems. Insufficient competition in certain areas keeps real wages lower in Iceland compared to other Nordic countries. The current government in ...

November 26, 2015, 2:44 am, 1582314
Interest rates have been extremely low since the Global Crisis. This column surveys the recent debate over whether they will remain low, or return to normal. While an unequivocal answer is not possible, the evidence suggests a significant decline in average real rates – perhaps to as low as 1%.

November 26, 2015, 2:04 am, 1582313

1.Shahab Ahmed, What is Islam?: The Importance of Being Islamic.  Too much hermeneutics for my taste, but intelligent and interesting throughout.  The authors downplays the prescriptive side of Islam and plays up the experiential and polyvalent aspects of the religion.  If you are reading books in this area, ...