Relevant and even prescient commentary on news, politics and the economy.

Is 6.2% the NAIRU?

News was released today that unemployment was 6.2% in July. How close are we to the natural rate of unemployment, or as some might say the NAIRU. In my research into effective demand, I track the natural rate of unemployment. How do I determine the natural rate of unemployment? … By comparing unemployment to the […]

How We Reduce Poverty, and How “The Market” Doesn’t

Matt Bruenig gives us a great breakdown of what poverty would look like if we relied on the market to solve it (as we did almost exclusively for thousands of years before the emergence of enlightened modern welfare states over the last two centuries). The poverty rate among the elderly would be > 45%. (Old […]

The USA is a Left of Center Nation

The USA is a left of center nation given the center defined by elites. This is my off topic thought (and comment) on a brilliant post on money and politics at The Monkey Cage. Ray LaRaja and Brian Schaffner note that parties give to centrist incumbents (likely to be in seriously contested seats) and argue […]

Shortage of labor by rejecting wage offers

This posts refers to an article written by Gary Burtless, Unemployment and the “Skills Mismatch” Story: Overblown and Unpersuasive. Mr. Burtless says that businesses are complaining about a skills shortage in an environment of lots of job openings. What kind of model might describe this situation? I have one… (link to model) Labor share represents […]

Forgotten, a beautiful dog waits for a home [in the Houston area] after nearly two years in boarding

Okay, yeah, I’m at it again.  Sorry about the off-topic intrusion, but …. Anyone in the Houston area who might be interested?

Yes, there is trouble in Japan

Just yesterday I posted about how weak real wages in Japan spells trouble for Abenomics. (link) Today we see by way of Stanley White and Leika Kihara at Reuters that output in Japan might be showing recession. “Output is clearly weakening, enough to make you even wonder if the economy is OK,” said Yoshiki Shinke, […]

Output Gap not so large… just for the record

Janet Yellen said today that there is still considerable slack in the economy in terms of labor and capital. So there is less pressure to tighten monetary policy earlier. Just for the record, from my own research there is little spare capacity left… Here is my graph… Warning! The potential GDP used in the graph […]