I don’t understand what Mohammad El-Erian is saying here. I do entirely sympathise with this a professor …advised me that, in order to maximize the probability of success, I should … Make sure to cover issues where I know more than those who will be evaluating my work; and, in putting everything together, make sure […]

by Mike Kimel American Enterprise Institute Economists Redux The other day I wrote a post about economists at the American Enterprise Institute (AEI), a prominent conservative think-tank. The post began with this paragraph from a story in the NY Times Politicians sometimes say that lower tax rates lead to higher economic growth, which in turn […]

Guest post by Kenneth Thomas of Middle Class Political Economist U.S. has 18th best unemployment benefits in OECD; also trails 13 non-OECD countries Tim Vlandas at EU Welfare States flags some important recent International Monetary Fund data on the generosity of a number of countries’ unemployment benefits. The metric used is the gross replacement rate […]

Correlations and Slopes Over Time In Part 1, we looked at the ratio of consumption spending to net worth, and how it changed over time.  This time we’ll look at the correlation between net worth and consumption. Here is the big picture: personal consumption expenditures (FRED Series PCE) plotted against Net Worth (FRED series TNWBSHNO) […]

The monthly trade data was reported this morning and you will see press reports about the nominal trade deficit. But I like to look at the real trade data as it gives a better feel for the economic impact of trade. The real trade deficit is improving and the balance in February was $44,148 million […]

Lifted from the rjs newsletter: Young vs. old – Three of the top five symptoms searched for on Yahoo Mobile in January were early pregnancy, herpes and H.I.V. None of these symptoms showed up among the top searches on desktop computers, which are more likely to be used by older people. The most popular symptom […]

Via the Finance Addict comes a survey by American Banker regarding ideas of too big to fail Now here’s a snapshot of the survey results (as of 2:00am EST):So here’s my question: if banks, themselves, do not believe that Too Big to Fail is over then why should we?

Bill Moyers points us back to banks and fiduciary responsibilities: “You shouldn’t run a financial system on the expectation of government support. We’re supposed to be a free enterprise system,” Volcker tells Moyers. “The problem of course is once they get rescued, does that lead to the conclusion they’ll get rescued in the future?” From […]

I do’t want to be rude to anyone in particular, so I will just note that I have the impression that two people who should know better are willing to suggest that logically consistent models populated by rational optimizing agents have policy invariant implications, that is are not vulnerable to the Lucas critique. This is […]