by Joseph Joyce Morality Tales and Capital Flows When the Federal Reserve finally raises its interest rate target, it will be one of the most widely anticipated policy moves since the Fed responded to the global financial crisis. The impact on emerging markets, which have already begun to see reversals of the inflows of capital […]
Fed Chair Janet Yellen said, among other things, For this reason, if the economy continues to improve as I expect, I think it will be appropriate at some point this year to take the initial step to raise the federal funds rate target and begin the process of normalizing monetary policy. To support taking this […]
The Effective Demand limit upon the economy is not a very visible concept in the econo-blogosphere. Yet, it represents a limit upon the utilization of labor and capital toward the end of a business cycle. When real GDP reaches its effective demand limit, normally we would see capacity utilization peak and start to fall. Capacity […]
A number of authors (Good Jobs First, David Cay Johnston, me, and me, among others) have pointed out that data centers (aka server farms) in the United States create very few jobs, yet receive state and local government subsidies that routinely exceed $1 million per job. I’m sure you already know that numbers like those […]
The graph implies that as labor share falls, labor is less inclined to supply its labor… and the natural rate of unemployment rises. (link to Fred graph) Since 1947, the unemployment rate falls to a level consistent with implied supply & demand limits set by labor share. The US now seems to be reaching the […]
The meme is ubiquitous, and widely documented: Rich people work longer hours. Obvious implication: they deserve what they get, right? Ditto the poor. Bunk. Why? All the research supporting that meme looks at workers, not families. It completely ignores students, the retired, and anyone else who isn’t working. Alert the media: workers work more than non-workers. And, news flash: rich families […]
by Joseph Joyce The Shifting Consensus on Capital Controls: Gallagher’s “Ruling Capital” Among the many consequences of the global financial crisis of 2007-09 was a shift in the IMF’s stance on capital controls. The IMF, which once urged developing economies to emulate the advanced economies in deregulating the capital account, now acknowledges the need to […]
The unemployment rate is officially at 5.5% in the US. But is that rate true? Maybe the rate should actually be higher when one considers the low labor participation rate and the long-term unemployed. Civilian Labor Force The civilian labor force has not risen much since the crisis. (link) Do we conclude therefore that there […]
Along similar lines as what Kansas has been doing with its budget for education, Louisiana has been cutting in favor of doling out large tax cuts and credits for business getting in return little if any economic impact. While A&E’s Duck Dynasty receives ~$330,000/episode from the state, Louisiana State University is preparing for additional budget […]
Washington Post’s Catherine Rampell opined an example of what could happen in 2016 if the Republicans win by featuring what is happening with education in Kansas after another $51 million in cuts. A recent letter by 17-year-old junior at Smoky Valley High School Haeli Maas to Governor Brownback cuts to the chase of it. To […]