This is the first of five posts I promised to write in this post. NAWRU stands for the Non Accelerating Wage inflation Rate of unemployment. It is a concept used by the European Commission when deciding how much to allow Treasuries adhering to the Stability and Growth Pact to spend. The commission considers cyclical adjustments […]

European Commission fiscal dictates are based on outdated economic theory, strange econometrics and arbitrary ad hoc restrictions on parameter estimates. It is not easy to discuss the technique behind that which presents itself as technocracy with a straight face. The ‘cracy part is genuinely powerful, so this matters. This will be the first of a […]

CBO’s 2015 Long-Term Projections for Social Security: Additional Information The Social Security Policy Options, 2015 was not the only report released by CBO yesterday. You have this one filling out the details in the Long-Term Budget Outlook Haven’t read this one either. So you all get first shot at framing the debate! Go get ’em […]

by Joseph Joyce The Enduring Relevance of “Manias, Panics, and Crashes” The seventh edition of Manias, Panics, and Crashes has recently been published by Palgrave Macmillan. Charles Kindleberger of MIT wrote the first edition, which appeared in 1978, and followed it with three more editions. Robert Aliber of the Booth School of Business at the […]

Capacity utilization dropped in November. The drop makes me reflect upon when I first began formulating the equations for effective demand in 2012-13. I made predictions to test the equations. Each prediction guided me to understand effective demand. One early prediction was that the natural rate of unemployment was around 7%. This graph comes from […]

Social Security Policy Options, 2015 Update of 2010’s Social Security Policy Options 36 Options for Social Security. Scored by CBO. Numbers! Graphs! Open Thread! (Because I haven’t read it yet)

As I watch the Dow slip below my attractor level of 17,300, the Fed rate is expected to lift off this week, oil is near $36/barrel and Christmas is close. Usually the markets try to hold their value through the holidays, so this slipping in the stock markets is something to watch. When the Dow […]

I direct you to an article by Adam Posen and Olivier Blanchard called, Japan’s solution is to raise wages by 10%. (Link) The only way that Japan is going to get its needed inflation is to firmly raise the wages of labor. Many of us knew Abenomics was not going to work unless wages rose. And […]

The new update to 3Q labor share came out today. The last two quarters were revised firmly upward. Investors may be concerned about profits after these revisions. I have my own estimation of an effective demand limit upon a business cycle which is based on labor share, capacity utilization and unemployment. Labor share represents effective […]

Facebook founder and his wife have decided to give away 99% of their fortune.   That is $ 45 billion. Now, I know many will heap praise upon them for their generosity.  Same deal when the Gates and Buffet did their give away announcement.  But, I’m not so keen on this.  I know, how heartless of me.  […]