by Robert Waldmann Answering Brad DeLong’s questions Brad asks: There are a large number of serious and, so far, unanswered questions about the financial panic of 2007-2009 and our current macroeconomic predicament. Among them are: 1)Why is housing investment still so far depressed below any definition of normal? 2)Why has labor-force participation collapsed so severely? […]
Update from John Aziz below… I see a Brad DeLong post where he includes a post from John Aziz, which John wrote back in April 2013. The DeLong post is about a savings glut, and the Aziz post points to the rise in savings as a percentage of GDP. But John Aziz wrote… “The actual […]
by Dale Coberly OH NOES! SOCIAL SECURITY IS BROKE AGAIN AND WE’RE ALL GOING TO DIE! BECAUSE… BECAUSE… BECAUSE WE’RE ALL GOING TO LIVE FOREVER A couple of public spirited citizens have taken some of their Own Time to warn us that Social Security is (taken from last January) “worse than you think.” They take […]
Paul Krugman, Dean Baker, Mark Thoma, (update: Jared Bernstein) and many others call for fiscal policy to boost employment and production. Their idea is to increase employment and labor’s power to bargain for better wages. The increased purchasing power of labor will resolve some problems with debt overhang too. There would be a snowball effect […]
Tim Duy wrote in a post titled, Inflation, Wages and Policy… “The fact that wages are rising while unemployment remains high is probably something of a puzzle to them (the Fed), and lends credence to the stories that the labor market is currently affected by severe structural issues…” The explanation of wage growth uses structural […]
Paul Krugman is developing the ideas to understand one of the root causes of the economic problems. His present line of logic leads to understanding the effective demand constraint upon output. He writes… “Profits took a hit during the financial crisis, but have soared since then, and are now 60 percent above pre-crisis levels; meanwhile […]
by Dale Coberly SETTING THE RECORD STRAIGHT ON SOCIAL SECURITY HOW THE “COMMITTEE FOR A RESPONSIBLE FEDERAL BUDGET” LIES TO YOU A group that calls itself “Committee For A Responsible Federal Budget” wrote what it claims to be “Setting the Record Straight on Social Security.” The article needs to be responded to at some length, […]
Enjoy this Christmas because next year Christmas may not be as Merry… As real GDP nears the effective demand limit, we should see some signs of the economy turning the corner toward a contraction. So, do we see any signs? … Well, yes. This graph plots the aggregate profit rate against the savings rate of […]
Today Jared Bernstein published a graph with a red line representing a new normal for potential GDP. I was surprised because the line looks very similar to the line I have been publishing for months for effective demand. Mr. Bernstein does not give an equation for his line, but only a definition… “The other two […]
Via Econospeak Barkley Rosser ponders taxes and distribution: Taxes And Income Distribution: The Way It Was And The Way It Is Got invited on to the local TV station today to discuss income distribution thanks to the recent statements about the matter by President Obama and Pope Francis, only to upset the local anchorman by telling […]