I read an article by Gavyn Davies, Another False Alarm on US Inflation?. He states that projections of rising inflation are not warranted due to lack of wage-growth pressures. I agree with him, but I want to go one step further and say that the uptick in inflation is understandable. I have written before about […]

Via Economist’s View ‘California’s Job Growth Defies Predictions after Tax Increases’: This article, by David Cay Johnston, is getting a surprising number of retweets: State’s job growth defies predictions after tax increases, by David Cay Johnston, The Bee: Dire predictions about jobs being destroyed spread across California in 2012 as voters debated whether to enact […]

Guest post by Bruce Carman. He first comments on an article from Jeremy Grantham who says that a coming bubble is likely. “. . . There are massive reserves of labor in the official unemployment plus room for perhaps a 2% increase in labor participation rates as discouraged workers potentially get drawn into the workforce […]

Simon Wren-Lewis writes about the difference between how the neofiscalists and market monetarists view the solution to the world’s economic woes. Basically, neofiscalists are ready to use whatever is necessary. Market monetarists limit themselves to creative monetary policy. He uses a car analogy. “To understand why I do get annoyed with MM, let me use […]

Corporate “inversions” are back in the news again, as multinational corporations try every “creative” way they can to get out of paying their fair share of taxes for being located in the United States. With inversions, the idea is to pretend to be a foreign company even though it is physically located and the majority […]

This will be a vague confused post related to the question of why the great recession didn’t lead to deflation in the USA. From 2003 through 2007 there was low CPI inflation about 2% to 3%. A huge recession, sluggish recovery and gigantic persistent output gap caused inflation to drop into the range from 1% […]

More on the labor-market model using labor share. I want to look at productivity to make the case that the labor supply curve is actually the effective demand limit in the model. (link to previous article) Start with the equation… labor share = real wage/productivity We have all seen that over the years, real wages […]

Yves Smith writes: SEC Commissioner Calls FSOC “Vast Left Wing Conspiracy” We witnessed a new outburst of Banking Industry Persecution Complex yesterday from SEC Commissioner Michael Piwowar, who was speaking before an assembly of fellow inmates at the American Enterprise Institute. Piwowar has made it clear in previous speeches that he is opposed to provisions […]

I have had a series of posts (one, two)  in response to Simon Wren-Lewis‘ post on an aggregate demand constraint. My posts give another version of his model which puts real wages on the y-axis and Qty labor employed on the x-axis. I put labor share on the y-axis and employment rate on the x-axis. […]

This post is a message to the Federal Reserve if they are serious about maximizing employment. Yesterday I posted a model for labor share plotted against labor (Qty.) in response to a post by Simon Wren-Lewis. The model suggests that there is an ideal level of labor share that will employ the most amount of […]