Economics Roundtable

March 2017 Fed Funds Rate

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

Click on the image to get a bigger version.

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.

Click on the image to get a bigger version.

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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- Recent Entries

March 23, 2017, 11:03 am, 1731152

Last year saw the strongest evidence yet that Americans are returning to traditional patterns in where they move—from cities to suburbs and from North to South—after a recession-driven pause of nearly a decade.

Central counties of metropolitan areas grew 0.7% last year while outlying counties grew 1%, according to new Census ...

March 23, 2017, 11:03 am, 1731151

Beginning in 2014, millions of lower income-earning Americans became eligible to have fully government-subsidized health insurance coverage through the U.S. government's Medicaid welfare program thanks to the expansion of eligibility for that program provided for by the Affordable Care Act (ACA), which is more popularly known ...

March 23, 2017, 11:03 am, 1731150
The Census Bureau reports New Home Sales in February were at a seasonally adjusted annual rate (SAAR) of 592 thousand.

The previous three months combined were revised down slightly.

"Sales of new single-family houses in February 2017 were at a seasonally adjusted annual rate of 592,000, according ...

March 23, 2017, 11:03 am, 1731149
From the Kansas City Fed: Tenth District Manufacturing Activity Strengthened Further

The Federal Reserve Bank of Kansas City released the March Manufacturing Survey today. According to Chad Wilkerson, vice president and economist at the Federal Reserve Bank of Kansas City, the survey revealed that Tenth District manufacturing activity strengthened ...

March 23, 2017, 10:04 am, 1731148
(Don Boudreaux)

… is from page 76 of F.A. Hayek’s last – his 1988 – book, The Fatal Conceit:

March 23, 2017, 10:04 am, 1731146

President Trump has promised he’ll boost economic growth. “Tremendous” growth, to be specific. In that way — and maybe no other — he’s like every other politician. Here’s what politicians don’t do: They don’t say Americans are plenty rich. They don’t say faster economic growth is unimportant. They don’t say, ...

March 23, 2017, 10:04 am, 1731147

Across the country, oil and gas production is gaining momentum, thanks to innovative technologies and practices that have led to ongoing reductions in costs, dramatic improvements in productivity — and a resurgence in U.S. manufacturing.

Yet oil and gas producers are encumbered by some long-running legal roadblocks that, by many measures, have ...

March 23, 2017, 9:03 am, 1731115
From Black Knight: Black Knight Financial Services’ First Look at February Mortgage Data: Prepayment Activity Continues to Decline, Down 40 Percent So Far in 2017

• Prepayment speeds (historically a good indicator of refinance activity) declined 15 percent in February, marking a 40 percent overall year-to-date decline and the ...

March 23, 2017, 9:03 am, 1731114
The DOL reported:

In the week ending March 18, the advance figure for seasonally adjusted initial claims was 258,000, an increase of 15,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 241,000 to 243,000. The 4-week moving average was 240,000, an ...

March 23, 2017, 8:34 am, 1731113

In theory, there’s a strong case for building portfolios based on risk factors. In practice, the jury’s out.

The transition from academic research to real-world portfolios, as usual, is a rocky affair. The results you achieve will depend on the factors you hold (and don’t hold), the funds ...

March 23, 2017, 7:33 am, 1731110

I used this to look up the possible side effects of a medication. While there a bunch of place on the Web that provide that information, this site has some information that I don't recall seeing elsewhere. In particular, it tells you the number of complains the FDA ...

March 23, 2017, 7:33 am, 1731109

"4 Reasons for the Death of America's Car Culture".

The vibrant love between car and man that inspired an entire culture of auto devotees now seems to be dwindling. The gear-head enthusiasts will always motor on, I am sure, but what happened to the average American? Simple ...

March 23, 2017, 7:33 am, 1731108

Nicely argued. Key bit:

When it comes to Jews, anti-Semitism generates the absurd. If you think capitalism is evil, you can focus on the “international banking conspiracy” led by the Rothschilds. If collectivism offends you, there is always Karl Marx to be the focus of your wrath, ...

March 23, 2017, 7:23 am, 1731107

Discrimination in the labour market occurs when employers make decisions on wages and employment based on prejudices, such as race, gender, religion. It can lead to variations in wages for the same job and different employment rates.

Kenneth Arrow defined discrimination as

“the valuation in the market-place of personal characteristics of the ...

March 23, 2017, 7:03 am, 1731091

The U.S. economy is stuck in a rut. New research suggests that isn’t about to change.

The last recession ended in mid-2009. Since, the expansion has been the third-longest in U.S. history but also the  slowest of the post-World War II era—perhaps longer. Economists and observers have cited the ...

March 23, 2017, 7:03 am, 1731090

The flow of foreign workers without a college education into the U.S. is likely to dwindle in the coming decades due to demographic and other forces, new research suggests, even if President Donald Trump doesn’t carry out his pledge to build a wall on the southern border.

“Because U.S. neighbors ...

March 23, 2017, 5:23 am, 1731086

Readers Question: Does the level of real income grow as the economy grows? Can we say that real income grows as the economy grows? If yes, what factors surround it? 


In a period of positive economic growth, usually, you would expect a rise in real wages and higher pay. However, it ...

March 23, 2017, 5:03 am, 1731057

March 23, 2017, 4:04 am, 1731056

[Andre] Agassi pauses when asked if he and his wife [Steffi Graf] sometimes hit a few balls in Vegas – for old time’s sake? “No. It sounds a nice idea. But as soon as you hit the first couple of balls you remember you can do this. But you’re ...

March 23, 2017, 2:04 am, 1731040

If you recall, Robert D. Putnam, in his last book, expressed surprise that Chetty and Hendren, (2014) did not find evidence of a decline in intergenerational mobility.  Putnam predicted that researchers would find such evidence soon enough.  After all, it seems the returns to ...

March 23, 2017, 12:34 am, 1731035
By: G. P. Manish, Felicia Cowley

Keynesian economics has witnessed a remarkable resurgence since the crisis of 2008. The inability of mainstream economics to predict or explain the crisis led many economists to become skeptical of its core macroeconomic tenets. Several have ...

March 23, 2017, 12:34 am, 1731034
By: Llewellyn H. Rockwell Jr.

35 years ago, I was worried. I was working at a free-market think tank at a university, and I could see that Austrian economics was becoming less and less influential.

Who would speak for untrammeled freedom and capitalism? ...

March 23, 2017, 12:04 am, 1731033
Here’s a graph showing the number of attorneys as a share of the US population: The increase seems pretty inexorable starting around 1970, doesn’t it? For grins and giggles, here’s snide graph on which I will make no comment: If you’re wondering where the lawyers live, a quick google search ...

March 23, 2017, 12:04 am, 1731032

As the Trump administration begins to advance its agenda, there is an opportunity to address the realities facing many working- and middle-class families. After the election, David and Amber Lapp conducted a focus group of working-class families in Ohio to understand their economic situations and their perspectives on issues ranging ...

March 23, 2017, 12:04 am, 1731031

The Constitution calls for the president to nominate Supreme Court justices, but requires “the advice and consent of the Senate” to appoint them. What standards ought to guide senators in giving that consent? How much deference should the Senate show to the president’s choice? Is there a meaningful distinction today ...

March 22, 2017, 10:44 pm, 1730999
Most policies that target climate change – such as carbon taxes and cap-and-trade programmes – have long-term benefits but short-term economic costs. This column argues that population policies may not be subject to this trade-off. In particular, policies that reduce population growth can have a direct positive effect on income ...

March 22, 2017, 10:44 pm, 1730998
Recent global trade growth is even more disappointing than global GDP growth. This column argues that this unexpected weakness of trade relative to GDP is related to the high volatility and pro-cyclicality of real trade flows, and that cyclical forces are the main drivers. It also shows that the accuracy ...

March 22, 2017, 8:34 pm, 1730972
By: Ryan McMaken

The supply of US dollars has slowed during early 2017 with February's year-over-year percentage increase hitting a 17-month low of 7.7 percent. Monthly year-over-year growth rates in the money supply have been falling each month since October.

Over the ...

March 22, 2017, 8:04 pm, 1730966

A new study in press at the Journal of Hand Therapy (yes, a real thing) finds that millennial men may have significantly weaker hands and arms than men the same age did 30 years ago.

Researchers measured the grip strength (how strongly you can squeeze something) ...

March 22, 2017, 7:33 pm, 1730965

March 22, 2017, 7:03 pm, 1730945
The warmer weather probably didn't impact February existing home sales, because existing home sales are counted when the contract closes. However the warm February may have boosted New Home sales since new home sales are counted when contracts are signed - and there were probably more people out looking ...

March 22, 2017, 6:34 pm, 1730941

March 22, 2017, 6:34 pm, 1730942

March 22, 2017, 6:34 pm, 1730944

March 22, 2017, 6:34 pm, 1730940

March 22, 2017, 6:34 pm, 1730943

March 22, 2017, 6:34 pm, 1730936

March 22, 2017, 6:34 pm, 1730935

March 22, 2017, 6:34 pm, 1730937

March 22, 2017, 6:34 pm, 1730938

March 22, 2017, 6:34 pm, 1730939

March 22, 2017, 6:04 pm, 1730932
(March 22, 2017 06:31 PM, by David Henderson) My review of Tyler Cowen's latest book, The Complacent Class, is now out in the pages of Regulation. It's titled "Tyler Cowen: Semi-Persuasive Futurist." This excerpt gives a flavor of what I liked and disliked: Cowen nails the causes and... (1 COMMENTS)

March 22, 2017, 6:04 pm, 1730931
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

The headline is promising: “Peter Navarro Responds ...

March 22, 2017, 6:04 pm, 1730930

Nowadays, American and European policymakers seem to have very different views on many economic policy issues. However, it would seem that they do share one thing in common. They both have learned very little from Greece’s sovereign debt crisis of the past eight years. This is all too likely to ...

March 22, 2017, 5:33 pm, 1730925

See for yourself: And here is the information on the survey and panel:

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions ...

March 22, 2017, 4:34 pm, 1730894
By: C.Jay Engel

In a recent interview on CNBC's SquawkBox, Neel Kashkari explained his dissenting position on the March rate hike. His position was that there is not yet enough inflation. In fact, he thinks that the Fed's 2% inflationtarget shouldn't ...

March 22, 2017, 4:04 pm, 1730891
(March 22, 2017 02:20 PM, by Bryan Caplan) Here's my debate with Christopher Wellman. Since the audience was admonished to vote on the literal resolution prior to voting, I'm now slightly less confident in my "metaphorical voting" theory of my Intelligence Squared debate outcome. Either way, enjoy.... (0 COMMENTS)

March 22, 2017, 4:04 pm, 1730890
(Don Boudreaux)

Here’s a letter to Intissar Guettou, who is with ReportLinker

Thanks for e-mailing your press release announcing the results ...

March 22, 2017, 3:33 pm, 1730887

Carlo Carraro (REEP editor):

This issue of REEP also features four regular articles (we have indeed increased the number of articles per issue) on topics that I believe will be of great interest to our readers. ... The fourth article, “What Do Environmental and Resource Economists Think? Results from a Survey ...

March 22, 2017, 3:03 pm, 1730855

From an interview of F. M. Scherer (Professor Emeritus in the John F. Kennedy School of Government at Harvard, and former chief economist at the Federal Trade Commission) at ProMarket:

“Our Efforts to Deal With Tech Firms’ Market Dominance in the U.S. Have Been an Abject Failure”: ...Q: The five ...

March 22, 2017, 3:03 pm, 1730854

Caterina Lepore, Caspar Siegert, and Quynh-Anh Vo at Bank Underground:

What can Nobel-winning contract theory teach us about regulatingbanks?: The 2016 Nobel Prize in economics has been awarded to Professors Oliver Hart and Bengt Holmström for their contributions to contract theory. The theory offers a wide range ...

March 22, 2017, 3:03 pm, 1730853

Tim Duy:

Is Bank Lending A Concern?, by Tim Duy: I have seen some angst recently over declining growth in commercial bank lending. See, for example, the Wall Street Journal:

Bank loans across all categories are increasing 4.6% annually, the slowest pace since 2014, according to weekly Fed ...

March 22, 2017, 3:03 pm, 1730852
Earlier: NAR: "Existing-Home Sales Stumble in February"

A few key points:

1) As usual, housing economist Tom Lawler's forecast was closer to the NAR report than the consensus. See: Existing Home Sales: Take the Under

2) The warmer weather probably had no impact on ...

March 22, 2017, 2:34 pm, 1730851
By: Alice Salles

Government’s meddling in the healthcare business has been disastrous from the get-go.

Since 1910, when Republican William Taft gave in to the American Medical Association’s lobbying efforts, most administrations have passed new healthcare regulations. With each ...

March 22, 2017, 2:04 pm, 1730843

March 22, 2017, 2:04 pm, 1730842

Here is part of the book summary:

This book examines SEZs from a political economy perspective, both to dissect the incentives of governments, zone developers, and exporters, and to uncover both the hidden costs and untapped potential of zone policies. Costs include misallocated resources, the encouragement of rent-seeking, and ...

March 22, 2017, 2:04 pm, 1730840
(Don Boudreaux)

Below is a letter to WTOP Radio in Washington.  When I heard this college-age kid express his ‘surprise’ I burst out ...

March 22, 2017, 2:04 pm, 1730841
(Don Boudreaux)

Levi Russell nicely busts a common myth about economics.  (Note: to the extent that any actual economists are guilty of ...

March 22, 2017, 2:04 pm, 1730839

I was delighted to hear this month that former AEI president Chris DeMuth will receive a 2017 Bradley Prize. It is one of the highest honors conferred on individuals anywhere in the world of policy and culture.

We at AEI offer our deepest congratulations to Chris, who led the Institute ...

March 22, 2017, 1:34 pm, 1730836

I've been wanting to write this paper since the EPA/DOE workshop on the SCC:

The Impact of Climate Change on Marine Recreational Fishing with Implications for the Social Cost of Carbon

John Whitehead, Appalachian State University
Daniel Willard, Environmental Defense Fund


We estimate the effects of temperature ...

March 22, 2017, 1:34 pm, 1730835

Christina Weigand and Scott Crosson (to be presented at the NAAFE Forum 2017 at 5:30 La Paz time):


NAAFE conference poster preview. I'm sure yall can read this on your phones easily.

— Scott Crosson (@FishEcon) March 17, 2017

Here is the abstract:

We provide ...

March 22, 2017, 1:23 pm, 1730834

Human Capital is a measure of the skills, education, capacity and attributes of labour which influence their productive capacity and earning potential.

According to the OECD, human capital is defined as:

“the knowledge, skills, competencies and other attributes embodied in individuals or groups of individuals acquired during their life and used to ...

March 22, 2017, 1:03 pm, 1730803
Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment.

From the AIA: Architecture Billings Index rebounds into positive territory

The Architecture Billings Index (ABI) returned to growth mode in February, after a weak showing in January. As a leading economic indicator ...

March 22, 2017, 12:44 pm, 1730802

Third Circuit is reversed. Opinion is here.

March 22, 2017, 12:34 pm, 1730801
By: Ryan McMaken

As the immigration debate goes on, many commentators continue to sloppily ignore thedifferencebetween the concept of naturalization and the phenomenon of immigration.

While the two are certainly related, they are also certainly not the same thing. Recognizing this distinction can ...

March 22, 2017, 12:04 pm, 1730800

Here is one of Noah’s bits:

Smith: OK. I wanted to press you on a couple more things. First, you discuss how productivity growth has slowed down, but you also mention that people might be slacking off a lot more at work. Don’t those two contradict each other? If people ...

March 22, 2017, 12:04 pm, 1730799
(Don Boudreaux)

Here’s a letter to the Wall Street Journal:

Yukon Huang correctly argues that, ...

March 22, 2017, 12:04 pm, 1730798

I can’t claim that I have listened to every exchange in the full day of hearings on Judge Neil Gorsuch’s nomination to the Supreme Court, but the proceedings seem to be following a pattern common for at least the last dozen years, going back to the hearings on Chief Justice ...

March 22, 2017, 12:04 pm, 1730797
Resident Fellow Marc Thiessen discusses why liberals are opposing Neil Gorsuch in his Supreme Court nomination hearing.

March 22, 2017, 11:03 am, 1730765
From the NAR: Existing-Home Sales Stumble in February

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, retreated 3.7 percent to a seasonally adjusted annual rate of 5.48 million in February from 5.69 million in January. Despite last month's decline, February's sales pace ...

March 22, 2017, 10:44 am, 1730764
Failed financial firms should not be bailed out by the taxpayers. Europe, unfortunately, has a weak track record of following this principle of good governance and sound economic policy. The banking union, with its new approach to supervision and resolution, is meant to improve this matter. This column introduces a ...

March 22, 2017, 10:44 am, 1730763
The 4th Special Report in the Geneva Reports on the World Economy series reviews the current status of bail-ins and bank resolution in Europe. It provides a critical comparison of the US and EU bank resolution rules, examines European banking failures, and makes a number of policy recommendations concerning governance, stress testing, cross-border issues and resolution of financial ...

March 22, 2017, 10:34 am, 1730762

James O’Brien tweeted yesterday:

McGuinness was both a murderous terrorist & a powerful force for peace. He changed. Our furiously binary zeitgeist can't compute such change.

I want to expand on this, because it tells us something about the nature of politics generally.

I ...

March 22, 2017, 10:04 am, 1730761
(Don Boudreaux)

… is from page 43 of my Mercatus Center colleague Dan Griswold’s compelling 2009 book, Mad About Trade:

March 22, 2017, 10:04 am, 1730760

Monday’s House Intelligence Committee hearing, billed as the first public inquiry into Russia’s election meddling, was a spectacle with an obvious lesson: Offense is easier than defense.

House Republicans had a good time investigating the Obama administration. How successful those investigations were is a debate for historians. But the fact ...

March 22, 2017, 10:04 am, 1730758

We are quickly approaching the annual one-hour event in energy self-flagellation and green nitwitery known as Earth Hour, which takes place this Saturday, March 25, ...

March 22, 2017, 10:04 am, 1730759

Key Points

Assigning public schools based on residence has been a factor in the middle-class movement out of urban areas. Urban schools have declined in quality, they are often dysfunctional, and the surrounding area have become blighted. In contrast to the Housing and Urban Development’s policy to begin moving poor urban families ...

March 22, 2017, 9:03 am, 1730726
From the MBA: Mortgage Applications Decrease in Latest MBA Weekly Survey

Mortgage applications decreased 2.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 17, 2017.

... The Refinance Index decreased 3 percent from ...

March 22, 2017, 8:34 am, 1730725

Why are investors rushing back into safe-haven Treasuries? Maybe the crowd’s recognizing that political risk for the US is higher than previously assumed. Or perhaps the softer estimates for first-quarter GDP growth are weighing on sentiment. A highly valued stock market doesn’t help. Whatever the reason, Treasuries are everyone’s new ...

March 22, 2017, 8:05 am, 1730724

Written for the 40th (!) anniversary of the Cato Institute, here is the clinching summary paragraph:

So we’re going to see a kind of intellectual war, and possibly war in other, more violent forms too. That war, using that word in the broadest sense possible, will be between today’s amazing ...

March 22, 2017, 7:34 am, 1730720

Chester Finn is concerned about the rapid increase in "dual enrollment" classes. ("These are courses offered for college credit to students who are still enrolled in high school, typically in eleventh or twelfth grade.")

March 22, 2017, 7:34 am, 1730718

Edward Archer, a "Computational Physiologist currently serving as Chief Science Officer for EnduringFX," energetically argues "No." I agree. And I'd add that this is one of several reasons economics tends to outperform other social sciences: we don't pay much--or even any--attention to what people say about why they ...

March 22, 2017, 7:34 am, 1730719

Like many people I don't sleep as well as I used to. I're read a little about melatonin--some people swear by it--and what I've read has inducedme to avoid it for now. This piece increases my wariness.

March 22, 2017, 7:34 am, 1730717
Thomas Klitgaard and Harry Wheeler

March 22, 2017, 7:23 am, 1730716

The Rotten Kid Theorem states that in a family with a wealthy altruistic parent  – even selfish kids – can have a financial incentive to be harmonious and kind to their siblings.

This theory of family behaviour was first proposed by Gary Becker in an article (1974). “A Theory of Social ...

March 22, 2017, 5:33 am, 1730683

Even after all these years, the creativity and adaptability of American businesses still startles me.

March 22, 2017, 5:33 am, 1730682

Little that I haven't read elsewhere, but if you haven't followed the recent research, this is a nice short summary.

March 22, 2017, 5:03 am, 1730672

Since we first uncovered the importance of dividend futures for anticipating future stock prices, we've been keeping track of that data on a regular basis.

Doing that has been a valuable exercise, not just because of our primary use for the data, ...

March 22, 2017, 5:03 am, 1730671

March 22, 2017, 2:04 am, 1730666

Probably so, so says my latest Bloomberg column.  One problem is that interstate mobility as a competitive check has declined, but there are other problems too.  Here is one excerpt:

One unfortunate side effect of today’s political polarization is that voters are more likely select state and local candidates ...

March 22, 2017, 2:04 am, 1730665

Their conclusion was that there are 25m tonnes of spiders around the world and that, collectively, these arachnids consume between 400m and 800m tonnes of animal prey every year. This puts spiders in the same predatory league as humans as a species, and whales as a group. Each of ...

March 22, 2017, 12:34 am, 1730654
By: Frank Shostak

According to conventional analysis, a key factor in exchange rate determination is the state of the balance of payments. It is held that as long as the US continues to run a large trade account deficit, which stood at ...

March 22, 2017, 12:34 am, 1730653
By: Christopher P. Casey

On February 28th, while addressing a joint session of Congress, President Trump quoted Abraham Lincoln and praised his economic philosophy:

The first Republican President, Abraham Lincoln, warned that the "abandonment of the protective policy by the American Government ...

March 22, 2017, 12:04 am, 1730649
(Don Boudreaux)

April 19th will be the 200th anniversary of the publication of David Ricardo’s On the Principles of Political Economy ...

March 22, 2017, 12:04 am, 1730648

Pyongyang is the world’s worst human rights violator, and yet, the Kim regime’s behavior at home cannot be dismissed as an isolated threat far from America’s shores, as ...

March 22, 2017, 12:04 am, 1730647

In his new book, “One Nation Undecided: Thinking Clearly About Five Hard Issues That Divide Us” (Princeton University Press, 2017), Peter H. Schuck, the Simeon E. Baldwin Professor of Law Emeritus at Yale University, analyzes five of the hardest public policy issues: poverty, immigration, campaign finance, affirmative action, and religious ...