Economics Roundtable

March 2017 Fed Funds Rate

What is the effect of a 0.25% change in the Fed Funds rate?.

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March 2017 Payroll Employment

Payroll employment has not grown impressively since 2000. Some baby-boomers retired, but that does not totally account for this graph.

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May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

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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 .

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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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- Recent Entries

May 27, 2017, 7:03 pm, 1751206

Brad DeLong:

The Future of Work: Automation and Labor: Inclusive AI: Technology and Policy for a Diverse Human Future: Thank you very much.

Let me follow the example of our Lord and Master Alpha-Go as it takes the high ground first.

Let me, therefore, take the hyper-Olympian and very long run ...

May 27, 2017, 6:45 pm, 1751205
The Greek crisis is typically seen as a sovereign debt crisis. Using a new dataset, this column explores the dynamics of national wealth accumulation in Greece over the past two decades. It argues that, despite certain idiosyncrasies, the Greek crisis can be better characterised as a balance of payments crisis. ...

May 27, 2017, 6:04 pm, 1751201
(Don Boudreaux)

Re-reading Paul Moroni’s original comment (addressed here), this line struck me:

The arrogance of ...

May 27, 2017, 4:34 pm, 1751194

Yesterday’s report on the second estimate of first quarter Gross Domestic Product revealed that the economy slowed less than expected, but the numbers still weren’t great and the future is, at best, murky:

Real gross domestic product ...

May 27, 2017, 4:04 pm, 1751193
(Don Boudreaux)

If you’re going to criticize the case for free trade, please try to understand the case that you’re criticizing. ...

May 27, 2017, 3:33 pm, 1751191
My friends and students know that I like to talk. Here are my slides for an upcoming speech I'm giving about real estate in China.

May 27, 2017, 3:33 pm, 1751190

May 27, 2017, 2:04 pm, 1751183

May 27, 2017, 2:04 pm, 1751182
(May 27, 2017 01:09 PM, by Scott Sumner) There's been a lot of recent talk about increasing federal spending on infrastructure. In my view this misses the point. There are two effective ways to get more infrastructure; cost control and increased saving. Here's Matt Yglesias: Mass transit construction... (0 COMMENTS)

May 27, 2017, 1:33 pm, 1751180

May 27, 2017, 10:04 am, 1751168
(Don Boudreaux)

… is from pages 146-147 of Robert Higgs’s Winter 2001 Independent Review article, “

May 27, 2017, 9:03 am, 1751160

May 27, 2017, 9:03 am, 1751159
The key report this week is the May employment report on Friday.

Other key indicators include Personal Income and Outlays for April, the May ISM manufacturing index, May auto sales, and the April Trade Deficit.

----- Monday, May 29th -----
All US markets will be closed in observance ...

May 27, 2017, 8:35 am, 1751158

May 27, 2017, 8:04 am, 1751157 the 10 years from 1999 to 2009, India’s workforce increased by 63m. “Of these, 44 million joined the unorganized sector, 22 million became informal workers in the organized sector, and the number of formal workers in the organized sector fell by 3 million.” This is a social catastrophe. ...

May 27, 2017, 8:04 am, 1751156

May 27, 2017, 7:34 am, 1751154

Good question. But the NCAA still has the chance to get UNC right.

May 27, 2017, 5:34 am, 1751148

Black Mamba praises "The Golden Democracy".

Go Dubs.

May 27, 2017, 5:03 am, 1751144

May 27, 2017, 4:04 am, 1751142

Is this a good idea?  A whole station devoted to Beatles music and Beatles music-derived products, plus a few early musical inspirations?  I ask as a fan, not a critic.  Based on about a week of listening, here are my impressions:

1. No Beatles songs were ...

May 27, 2017, 4:04 am, 1751141

This is not my view, but I am happy to present an alternative perspective for your consideration:

Yes, IRB’s sometimes do ridiculous things. But I served a total of 21 years on the IRB’s of two different institutions, and I’m sure I can match you anecdote for anecdote ...

May 27, 2017, 2:45 am, 1751138
It is high time to forget some economic ideas that hinder progress in the field. Some examples include the assumption that GDP is the best way to measure economic progress, or the belief that economic growth will eventually improve the welfare of the population as a whole. This column discusses ...

May 27, 2017, 2:45 am, 1751137
The new resolution and bail-in regime in Europe hypothetically lets banks fail without resorting to public funding. This column examines the effects of the bail-in of the Portuguese Banco Espírito Santo. Existing borrowers from the banks exposed to the bail-in experienced a negative impact on their credit supply from these ...

May 27, 2017, 2:34 am, 1751136
By: Jacob A. Miller

My most memorable high school experience occurred on the first day of my senior year. I was sitting in an Advanced Placement US Government class when the teacher posed a simple question to the students. It was a ...

May 27, 2017, 2:34 am, 1751135
By: Mises Institute

The Trump administration released its 2018 budget this week. Once again we saw the media try to play up decreases in proposed spending as a form of draconian cuts, ...

May 26, 2017, 10:04 pm, 1751132

Quarterly GDP figures for Kansas indicate essentially zero q/q growth in 2016Q4, and 0.3% y/y. This is true despite the end of the drought. BEA Plains region growth outpaces Kansas, as well.

May 26, 2017, 9:23 pm, 1751131
Here are some assorted macro musings from the past week:

1. Been there, done that, and it did not end well China edition. Once again, China forgets there is a macroeconomic trilemma. From the Wall Street Journal:

China’s central bank is effectively anchoring the ...

May 26, 2017, 9:03 pm, 1751128
The automakers will report May vehicle sales on Thursday, June 1st.

Note: There were 25 selling days in May 2017, up from 24 in May 2016.

From Reuters: U.S. auto sales seen up 0.5 percent in May: JD Power and LMC

U.S. auto sales in May ...

May 26, 2017, 8:34 pm, 1751127
By: Ryan McMaken

States have always thrived on the fear of the taxpayers, and states have always justified their existence in part on the idea that without the state, we'd all be overrun by barbarians, or murdered by our neighbors. Charles Tilly, ...

May 26, 2017, 7:33 pm, 1751121

May 26, 2017, 5:33 pm, 1751102
Joshua Linn and Alan Krupnick:

Many economists and other professionals looked on in dismay when President Trump issued executive orders and supporting guidance documents that appear to target regulations for elimination based primarily on their costs rather than a balanced assessment that includes benefits.

Accordingly, we joined 93 economists and lawyers in ...

May 26, 2017, 4:44 pm, 1751074

Yesterday I purchased a travel alarm clock through Amazon. This morning, the manufacturer emailed me with instructions for its ...

May 26, 2017, 4:34 pm, 1751073
By: Patrick Newman, Jeff Deist

More than 20 years after his death, Murray Rothbard continues to publish new books! Our guest Patrick Newman is the editor of a Rothbard manuscript dating to the ...

May 26, 2017, 3:03 pm, 1751040
Freddie Mac reported that the Single-Family serious delinquency rate in April was at 0.92%, unchanged from 0.92% in March. Freddie's rate is down from 1.15% in April 2016.

Freddie's serious delinquency rate peaked in February 2010 at 4.20%.

This matches last month as the lowest serious ...

May 26, 2017, 2:34 pm, 1751039
By: C.Jay Engel

I hate to be the bearer of bad news before a three day weekend, but St. Louis Fed President James Bullard informs usthat"U.S. prices are now 4.6 percent below the price level path ...

May 26, 2017, 2:04 pm, 1751038

May 26, 2017, 2:04 pm, 1751037

May 26, 2017, 2:04 pm, 1751036
(Don Boudreaux)

… is from pages 97-98 of the 2015 Matthew Dale translation of Weiying Zhang’s superb 2010 ...

May 26, 2017, 1:33 pm, 1751032

...we're both college professors, and we both hate snakes:

Get ready to update your nightmares.

A scientist from the University of Tennessee, Knoxville has discovered that a species of snake, the Cuban boa, hunts in groups, and through teamwork improve their chances of ...

May 26, 2017, 1:33 pm, 1751031
President Obama just gave a major speech in which he argues that climate change is causing food prices to spike. Economists often write down models of induced innovation (see Acemoglu and Lin 2004 or my recent NBER paper). If entrepreneurs smell profits from developing more robust ...

May 26, 2017, 1:03 pm, 1750999
From Merrill Lynch:

[T]he data [today] pushed down 2Q GDP tracking by a tenth to 2.5% qoq saar. The main drag was from the weak durables report, while revisions to 1Q GDP caused some modest shifts in the 2Q components.

From the Altanta Fed: GDPNow

The GDPNow model ...

May 26, 2017, 12:04 pm, 1750992
This very important paper “Moving to Opportunity” is well summarized by the discussant. Baby this town rips the bones from your back It’s a death trap, it’s a suicide rap We gotta get [them] out while [they]‘re young `Cause tramps like us, baby we were born to run [regressions] As ...

May 26, 2017, 12:04 pm, 1750991
Some Saudi-US History Given Donald Trump’s new commitment to support military adventurism by Saudi Arabia in Yemen and more generally against Iran, it might be worth reconsidering how this alliance developed. The beginning for Saudi Arabia was in 1744 when a wandering radical cleric, Mohammed bin Abdel-Wahhab met up with ...

May 26, 2017, 11:33 am, 1750990
This one I am particularly proud of, though I cannot claim to fully understand it.

May 26, 2017, 11:33 am, 1750989
Brad Plumer is a thoughtful young columnist for the New York Times. In this piece, he argues that a byproduct of President Trump's gutting of the Department of Energy's green subsidies is that world climate change mitigation will suffer a great blow. Is he correct? In his piece, he ...

May 26, 2017, 11:03 am, 1750965
From the BEA: Gross Domestic Product: First Quarter 2017 (Second Estimate)

Real gross domestic product (GDP) increased at an annual rate of 1.2 percent in the first quarter of 2017, according to the "second" estimate released by the Bureau of Economic Analysis. In the fourth quarter, real GDP increased ...

May 26, 2017, 10:34 am, 1750964

By IMFBlog

May 26, 2017

Just as technology is changing the way we live and work, it also affects the way we use and move our money. In this podcast, lawyer and bitcoin expert Patrick Murck of Harvard University tells us that financial ...

May 26, 2017, 10:04 am, 1750959
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

Commerce secretary Wilbur Ross writes that “because American auto ...

May 26, 2017, 9:03 am, 1750927

"The mother of all sucker punches":

It’s All About Trump’s Contempt, by Paul Krugman, NY Times: For journalists covering domestic policy, this past week poses some hard choices. Should we focus on the Trump budget’s fraudulence — not only does it invoke $2 trillion in phony savings, it counts ...

May 26, 2017, 8:35 am, 1750926

Smart beta: 2017 global survey findings from asset owners
FTSE Russell
May 22, 2017
How much higher can smart beta adoption climb? Now in its fourth year, FTSE Russell’s latest annual survey of global institutional asset owners indicates that smart beta adoption is at an all time high and ...

May 26, 2017, 8:35 am, 1750925

I don’t think commentators have drawn the right inferences from the mess May made over social care policy.

The problem is not that she made a U-turn: if you’re heading in the wrong direction, a U-turn is a good idea. Instead, the episode reveals a ...

May 26, 2017, 8:04 am, 1750924

White defendants in Winnebago County, Wisconsin were nearly twice as likely as non-whites to enter diversion programs instead of going to jail. A straightforward example of judicial racism? Surprisingly, no. The study, which was looking at people with no previous records who had committed non-violent misdemeanors, found that

… judges ...

May 26, 2017, 8:04 am, 1750923
(Don Boudreaux)

… is from page 312 of the late University of Washington economist Paul Heyne‘s ...

May 26, 2017, 7:34 am, 1750920

"Suspicious minds: why Elvis's posthumous popularity is plummeting".

May 26, 2017, 7:34 am, 1750919

Short video. I learned something.

Related ...

May 26, 2017, 7:03 am, 1750909

May 26, 2017, 5:33 am, 1750906

It will be time soon for our family to "cut the cord," so this was useful.

May 26, 2017, 5:33 am, 1750905

(p. D4) Most people, when they think of steam power, they think of rusty farm tractors from 150 years ago. But there's such a thing as modern steam power. Steam is the most direct way to get power out of heat. You can't build an internal combustion ...

May 26, 2017, 5:03 am, 1750898

Memorial Day weekend is upon us once again, and like many Americans, we'll take advantage of the long weekend to catch a movie at the local cineplex. The leading contender for the box office dollars of the Inventions in Everything staff this weekend is

May 26, 2017, 4:04 am, 1750896

May 26, 2017, 2:45 am, 1750877
Classical models suggest that shifts in the balance of power can lead to conflict, where the established power has the incentive to trigger war to deter the threat to its dominance. This column argues that this changes if international trade is taken into account. Industrialisation requires the import of natural resources, ...

May 26, 2017, 2:04 am, 1750876

1. Harold James, The German Slump: Politics and Economics 1924-1936.  Not economic history in the post-cliometrics sense, but a history of economic issues, very high quality, full of good information on just about every page.

2. William Rosen, Miracle Cure: The Creation ...

May 26, 2017, 2:04 am, 1750875

May 26, 2017, 12:34 am, 1750863
By: Jonathan Lee

Big Eye is watching you. For more than a decade, lobbyists from Johnson & Johnson (J&J), which controls over 40 percent of the contact lens market as a result of their cozy relationship with optometrists, and the American ...