Oh, dear. I won’t summarize this for you; you really have to read it in full.  (Or maybe just read Glenn Kessler’s article about it posted today.) And to think I had thought Julie Boonstra’s only comprehension problem was with basic math.  Turns out she also has a problem with reading comprehension and with understanding […]

by Joseph Joyce Riding the Waves   The volatility in emerging markets has abated a bit, but may resume in the fallout of the Russian takeover of the Crimea. The capital outflows and currency depreciations experienced in some emerging market nations have been attributed to their choice of policies. But their economic situations reflect the domestic […]

I’m surprised that nobody highlights what for me is the key takeaway from that report. They predict, with a $10.10/indexed increase: Low-end incomes increase $19 billion. High-end incomes decline $17 billion. For a net GDI increase of $2 billion. Table 1, page 2: Pie gets bigger, all that rot. The increase is presumably explained by […]

The normal Taylor rule takes into account the difference between inflation and a target inflation, and output and a targeted potential output. I will take a modified version of the Taylor rule and apply it to both capital output and labor output. First, capital output… Simulated nominal interest rate of capital = N + p […]

A simple rule of economic arithmetic that economists seem to studiously ignore: Inflation transfers real buying power from creditors to debtors, with nary an account transfer visible anywhere on anyone’s account books. Inflation means that debtors pay off their loans over time with less-valuable dollars — dollars that can’t buy as much bread, butter, and […]

Thomas Piketty’s important new book, Capital in the Twenty-First Century, predicts a bleak future of increasing concentrations of financial assets in few hands, stagnant wages and labor share of income, and declining returns to capital — secular stagnation. He enunciates and demonstrates the part of Marx that Marx got exactly right. But Dean Baker points out where […]

Inflation forecasts in the Livingston survey of experts are systematically different from inflation and thus do not correspond to the hypothesis of rational expectations and a quadratic loss function. One striking feature of the forecast errors is that the averages over decades of the median over participants forecast error are dramatically different from zero and […]

Just read Bryce Covert’s excellent post criticizing welfare reform. It is too good to excerpt.

I would like to ask a question of the readers for their comments. Has aggressive monetary policy made labor less valuable? The idea is that cheap money for so long to investors has made profits easier to obtain, and that labor was not valued and rewarded as a means to produce profits. Therefore, wages held […]