Relevant and even prescient commentary on news, politics and the economy.

Jared Bernstein Gives Us The Best Graph on the Employment Effects of Minimum Wage Increases

They say sample size matters. A handful of sample points in a study doesn’t tell you much, because they could just be showing random variation. This is also true not when you’re looking at many studies. You need to look at lots of research that uses different methodologies and data sets to get a confident feel […]

The Conservative Case for a Minimum Wage Hike

Most conservatives disparage minimum-wage laws with straightforward economic reasoning, based on Econ 101 textbook theory: demand curves slope down. If you institute a price floor, raising the price of labor, you’ll get less labor demanded — less jobs. This hurts poor people, especially entry-level folks like teenagers. At first blush, the argument’s got legs. And […]

The Global Labor Glut

Ryan Avent’s excellent post at The Economist finally provides me the impetus to respond to Josh Mason’s comments on my recent post. I suggested:  What we have instead of a Global Savings Glut is: 1. A Global Labor Glut: more human effort and ability available than is needed to provide goods that provide high aggregate […]

John Cochrane: I Would Never Dream of Suggesting that this Correlation Implies Causation!

Let’s say you come across this on the interwebs: Then the person who posted it says this: I purposely did not make any argument, draw any conclusions or anything else. And the person who posted it is a prominent, high-profile right-wing economist. What conclusions do you draw about that economist? About the economic effect of […]

Letter: Smart Capitalists and Patriotic Millionaires Say Hike the Minimum Wage

The Agenda Project (which is behind Patriotic Millionaires, Top Wonks, and other progressive initiatives) is preparing an open letter supporting an increase in the minimum wage. They’re looking for more signatories. SMART CAPITALISTS FOR AMERICAN PROSPERITY Dear Mr. President and Honorable Members of the U.S. Senate and House of Representatives, We are writing to ask you […]

Does Upward Redistribution Cause Secular Stagnation?

A while back I built a  model to look at the long-term economic effects of upward and downward redistribution. Posts here and here. Commenter JGF pointed out an error in the model. I’ve revised and corrected it. The spreadsheet’s here. The model is based on marginal propensities to spend out of wealth and income. Poor people […]

No: Saving Does Not Increase Savings

The misconceptions embodied in this post’s headline sow more confusion in economic discussions than any others. “Saving” and “Savings” seem like simple concepts, but they’re not. They have many different meanings, and their different usages (often implicit or unconscious) make coherent understanding and discussion impossible — even, often, in writings by those who have otherwise […]

The Economy Is a Ponzi Scheme

I don’t think there’s anything eye-popping or revolutionary this post, but it’s thinking that I’ve been finding useful. Long before Larry Summers bruited his recent ideas about secular stagnation and the need for bubbles, I came up against this great line from Nick Rowe (April 2011): The economy wants a Ponzi scheme. I’ve been pondering […]