Brad DeLong shares his lecture notes on the equity premium: There is, somewhere, a marginal investor: somebody just about indifferent between stocks and bonds. If the expected return to stocks were a little higher, he or she would move more money to stocks. If the extra risk associated with holding stocks were a little lower, […]

As I was reading another gem from Brad Setser on the Dark Matter controversy (Brad links to a very nice paper by Carol Corrado, Charles Hutten, and Daniel Sichel that shows the investment/GDP ratio has declined even if one included investment in intangible capital), one of his readers points out an AP story where Dick […]

As I was reading the Economic Report of the President, I figured it was time to revisit the issue of gasoline prices and the role played by refinery margins. Our graph shows the retail price per gallon relative to the consumer price index (January 2006 = 1.00) from January 2000 – when the real gasoline […]

The House Price Index was just released this morning with the data on house prices in the US for all of 2005. The press release discusses its results for the US as a whole, reporting that: Average U.S. home prices increased 12.95 percent from the fourth quarter of 2004 through the fourth quarter of 2005. […]

There’s a new data release out this morning on personal income and spending. The highlights: Personal income increased $75.2 billion, or 0.7 percent, and disposable personal income (DPI) increased $50.2 billion, or 0.5 percent, in January, according to the Bureau of Economic Analysis. Personal consumption expenditures (PCE) increased $76.7 billion, or 0.9 percent. In December, […]

Warning: This post is probably more for my own benefit than for anyone else’s edification. If you’re tired of arguing about trade, then skip this post. And if you’re not interested in reading about some rather technical economic research, then skip this post. On the other hand, if you’ve always wanted to see examples of […]

This morning the BEA released its second estimate of fourth quarter GDP. The estimate for GDP growth was revised up substantially, but the level was still very low, and the upward revision was no more than most observers had hoped for. Comparing to the BEA’s first estimate: The preliminary estimate of the fourth-quarter increase in […]

The Census Bureau report released this morning showed January New Home Sale were still strong. In fact, on a Not Seasonally Adjusted basis, January 2006 was the strongest January on record. Following is a graph of NSA January New Home Sales showing 2006 is a new record. Click on graph for larger image. The strong […]

There is wee bit in Michael Darda’s latest that I might agree with – but given the following, I have two questions for him and the rest of NRO Financial: If Congress doesn’t act to extend the 2003 tax cuts, tax rates on capital will rise, which would depress after-tax rates of return to capital […]

Yesterday’s CPI release showed that inflation continues to gallop ahead at a rather high rate, though once again, most of the rise was attributable to higher energy prices. Marketwatch offers this assessment: WASHINGTON (MarketWatch) — U.S. consumer prices increased a larger-than-expected 0.7% in January, led by higher energy, food and housing costs, the Labor Department […]