by Joseph Joyce The Search for an Effective Macro Policy Economic growth in the advanced economies seems stalled. This summer the IMF projected increases in GDP in these economies of 1.8% for both 2016 and 2017. This included growth of 2.2% this year in the U.S. and 2.5% in 2017, 1.6% and 1.4% in the […]
I have posted this graph before. Here is updated data. The graph plots labor share (left) against the unemployment rate (bottom) since 1948 to 2ndQ 2016. (data at FRED) The data points suggest a labor supply limit shown by the down-sloping red line. As labor share drops, unemployment tends to bottom out at higher levels. […]
by Mike Kimel Spotting BS as a Mechanism for Reaching a Wide Range of Conclusions – A Case Study I was reading up on alternative ways to deal with terrorism and stumbled on something called the Aarhus model. It seems like much of Europe, the Danish city of Aarhus (population of about 320K) had a […]
by Mike Kimel Labor, Immigration, and Democrats of Today v. Democrats of 1989 Lifted from comments I made to this post: In 1989 plus or minus a year, I went to see Cesar Chavez speak. Its been a long time, but I have two memories of the event. The first is that every time the […]
‘I don’t have to show you any stinking badges.’ Perusing Palgrave’s Dictionary of Political Economy from 1894 alerted me to the odd interaction of a pair of distinctions. The first distinction was between the study of “what is” and “what ought to be.” The second distinction was between “economic science” (or “economics”) and “political economy.” Economic science presumably […]
by Linda Beale Chamber of Commerce Sues Treasury on Inversion Regs Back in April, the Chamber of commerce suggested that it might sue the Treasury Department for violating the Administrative Procedures Act (APA) over the new inversion regs that were issued in April (T.D. 9761, REG-135734-14). See Fortune article (Apr. 6, 2016). Well, now they […]
by Mike Kimel Top Marginal Tax Rates and Real Economic Growth, Part 2 A few weeks I wrote a post looking at the correlation between the top marginal tax rate in a given year and the growth in real GDP per capita over subsequent years. This post is the first of several follow-ups. It will […]
On the blogosphere, there is an interesting debate about whether, when the next recession arrives, interests rates will be high enough that the normal approach of cutting the target federal funds rate will be sufficient. In chronological order David Reifschneider, Jared Bernstein, Paul Krugman and Dean Baker contribute their thoughts (and in the case of […]
Which of these models would you trust to evaluate inflation? (quarterly data since 1957) Phillip’s curve… core inflation plotted against unemployment. (link) My model plotting core inflation against corporate profit rates minus a mix of short & long-term nominal rates… (link) Who in their right mind would still talk about the Phillip’s curve after seeing […]
The Phillip’s curve is obsolete. Inflation does not reliably depend on employment. So what other model could we depend on? This one showing core inflation plotted against an aggregate corporate profit rate minus a mix of nominal rates. (FRED data link) Mixed nominal rate = 0.56*Fed rate + 0.44*10-year treasury Here we have quarterly data […]