Under normal economic conditions, the Fed funds rate would be higher. Yet, the Fed funds rate has been effectively at the zero lower bound for years. Why? Well, the answer is simple… The Fed has lost track of how to measure potential GDP and true slack. The problem is that the Fed has no awareness […]
Thomas Piketty’s (CV) Capital in the Twenty-First Century is the most important book on economics published in this century. The book has made a huge splash, and drawn the ire of conservatives, for its straightforward argument that recent increases in inequality in numerous countries are likely to rise to unprecedented heights unless governments can reach […]
Tim Duy wrote a post yesterday called, Heading into Jackson Hole. He gives a broad perspective of the economy relevant to monetary policy, which of course will be the major topic of discussion in Jackson Hole. He recognizes that wages need to rise even though firms complain of not being able to fill job openings. […]
Paul Krugman wrote a post today called, What’s the Matter with Europe? He cites that Industrial Production is stalling out there. Now this is a sign that Europe is against the effective demand limit. Something we already knew from productivity numbers. So there is no surprise. However, Mr. Krugman states that the US is not […]
by Dale Coberly FINANCING SOCIAL SECURITY A BOB BALL APPROACH Bob Ball proposed in 2007 (www.robertmball.org quoted in NASI “Fixing Social Security” Reno and Lavery, 2009, p 14) a “balancing rate increase.” This is the way his idea was described in the NASI publication: Acknowledging the uncertainty of 75 year projections, former Social Security Commissioner […]
From an article posted at ABC News, US Retail Sales Flat in July… “U.S. retail sales were essentially flat in July, providing evidence that consumers have yet to shed their doubts about the economy despite recent job gains. The Commerce Department said Wednesday that seasonally adjusted retail sales were unchanged in July compared with the […]
(lightly edited for ease of reading) Yesterday the Conference of Mayors and the Council on Metro Economies and the New American City released a report prepared by IHS Global Insight that is a repeat and thus update of a similar study performed after the 2001 – 2002 recession. Income and Wage Gaps Across the US. I […]
Labor share data going back many years was revised last week. According to these new revisions, the economy has been against the effective demand limit since the beginning of the year. With the stock markets retreating from their record highs, this should not be surprising. Keep in mind that the updated graphs below are based […]
There is a concern that many economists want the Federal Reserve to tighten monetary policy because the inflation monster is lurking out there. Maybe tighten is not the best word to use. “Normalize” monetary policy is a better term. Well anyway, the inflation monster is not lurking while labor share rises so slowly. Then, is […]
Leigh McIlvaine (@Leigh M.) of Good Jobs First alerted me to this article on what Tesla Motors wants in incentives to land its $5 billion Gigafactory: $500 million. This massive 6500 worker facility will produce the next generation of batteries in order to introduce a less expensive line of cars in 2017, the Tesla Model […]