It took me many years to understand the phrase “moral hazard.” It’s a fundamental tenet of economics, usually used to explain that, since consumers are untrustworthy, businesses need to charge them more.* It was finally cleared up for me in the midst of a presentation last year about how it’s a “moral hazard” issue that […]

By Spencer (2009)   The issue of a jobless recovery is getting a lot of attention recently. I’ve found the best way to look at the issue is to compare the change in real growth and productivity over the long run. There have been three periods of different productivity trends in modern US economic history. […]

Robert Waldmann I’m not sure whether (more likely wherE) this has been noted in the literature, but wage differentials not due to differences in workers’ skill are enough to generate a business cycle. A verbal “model” after the jump. update: additional model with fixed capital added. The key reference from which this is not quite […]

Rebecca The BLS establishment survey (nonfarm payroll) reports that the accumulated job loss since December 2007 is 5.02% (almost 7 million jobs), blowing the total job loss of the previous “biggie” recessions, the 73-75 and 81-82 recessions, out of the water by 2.5% and 2%, respectively. There’s no question that it has been bad, with […]

Rebecca Let’s investigate these pre-BLS reports. There are many job reports out there, but here are some of the biggies that come out right before the official government BLS employment situation (not a coincidence). Monster Employment Index (not seasonally adjusted) – an index geared toward online recruiting trends. Challenger job cuts (not seasonally adjusted) – […]

Rebecca Wilder With the developed and developing economies printing money like it’s going out of style, the exit strategy – i.e., taking back the hundred percent increase in the monetary base (at least in the US) – is rumored to be the topic du jour at the G-20 summit later this month. According to Reuters, […]

To often, we talk about models as if they are reality, instead of reflecting a reality that was approximated. At least forty economists, including at least three ‘Nobel’ Prize winners, know that: A rising tide lifts all boats only when labor and management bargain on relatively equal terms.

Posted for discussion. First, relating to the discussion in comments to rdan’s TBI post, Annual Change in U.S. output per hour: And, for future discussion, the Relationship between Oil Prices and the Consumer Price Index for the past sixty-plus years.

by Divorced one like Bush I just have to get this out because I fear we will not learn from this experience if we do not face up to what really is being put on the line in this crisis: Our labor. I am angry. And I am making this personal. It is personal. I’m […]

One of the hardest things in the world is to value that which is not otherwise measured. The old observation that a man who marries his housekeeper reduces GDP is both sexist and accurate. Still (via Erin), the salary.com estimate that being an at-home parent is worth $117,000 p.a. seems a bit high. And we […]