Robbins: Sleepwalking into Depression: The Economic Response to COVID-19—Noted

Things have not gone as badly in the past two months as Jacob Robbins feared back in mid-July. But we still stand on the knife’s edge of an even deeper depression then we are currently in, with governments about to apply a large deflationary demand shock this fall: Jacob Robbins: Sleepwalking into Depression: The Economic Response to COVID-19 in the United States...

Recent podcasts related to economic history

Historically Thinking Al Zambone talks to Sharon an Murphy about her book Other People’s Money: How Banking Worked in the Early American Republic   The Economic History Podcast is relatively new but has several episodes up now including one with Lisa Cook talking about racial violence, innovations. The Planet Money episode with Dr. Cook is also very good.   Coffee with Cornelius, podcast with Cornelius Christian, has several episodes with...

Unions and Inequality: Looking at the Obvious

At the same time that a particular labor union (teachers) has successfully pushed to keep school buildings closed, we are reminded that unions are part of the "solution to inequality."  As an update to an old literature on unions and inequality, let's first look at distributional effects of closing school buildings.The chart shows that closing school buildings reduces learning for all groups, but especially low-income and minority...

Economics’ race (and other) problems

There’s been much discussion in recent days about Economics’ race problem. Some of what has come out is quite disturbing. I have not said much, but I have listened and thought. Here are a few reflections I want to add. It doesn’t surprise me that the field, as a whole, reflects the ingrained attitudes and practices of the society of which it is part. But there are some features of the discipline that magnify and aggravate the problem. First,...

Estimating Oil Industry Revenue

The importance of the oil industry to the North Dakota economy is well known. We looked at production and prices in the past. I thought a look at estimated revenue was in order. This is simply the product of average monthly price and the monthly production. Clearly it is an approximation, but it is likely a good overall approximation for industry revenue in North Dakota right now. If a picture is worth a thousand words, let’s start talking:...

Nonfarm Payroll Employment vs. Trend, Pre-Covid-19

Figure 1: Nonfarm payroll employment (blue), deterministic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations. Figure 2: Nonfarm payroll employment (blue), stochastic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations. The above graphs are useful if you thought everything was hunky-dory employment-wise, even before the pandemic hit.

Cochrane on debt II

Yesterday, I posted a reply to John Cochrane's Sept 4 post on the national debt. John alerted me to his Sept 6 update, which I somehow missed. Given this update (together with some personal correspondence), let me offer my own update. John begins with an equation describing the flow of government revenue and expenditure. With a debt/GDP ratio of one, the sustainable (primary) deficit/GDP ratio is given by g - r, where g = growth rate of NGDP...

More Thoughts on a Better Income Support System for the Next Crisis

This post was written by Mike Veall of the Department of Economics at McMaster University. I appreciated the comments on my earlier post, where I suggested that a small monthly Basic Income system would have the advantage of being able to be scaled-up in a crisis. Incenting participation in the tax/transfer system is responsive to the work of Anna Cameron, Lindsay Tedds, Jennifer Robson and Saul Schwartz pointed out by Frances even though...

Statistics, lies and the virus: five lessons from a pandemic

My new book, “How To Make The World Add Up“, is published today in the UK and around the world (except US/Canada). Will this year be 1954 all over again? Forgive me, I have become obsessed with 1954, not because it offers another example of a pandemic (that was 1957) or an economic disaster (there was a mild US downturn in 1953), but for more parochial reasons. Nineteen fifty-four saw the appearance of two contrasting visions for the world...

An Overview of Emergency COVID-19 Lending from the Fed

The Federal Reserve, like central banks everywhere, view providing financial liquidity during a crisis (being the "lender of last resort") as one of their core functions. What has the Fed done so far in the COVID-19 recession?. Tim Sablik offers a crisp overview in "The Fed's Emergency Lending Evolves" (Econ Focus: Federal Reserve Bank of Richmond, Second/Third Quarter 2020, pp. 14-17).  Here's a list of the nine main...

Cochrane on the US as a banana republic

Lots of people view my posts on the US becoming a banana republic as being slightly hysterical. Those readers might want to check out John Cochrane’s new post. While I don’t recall him using the term “banana republic”, his depiction of American political dysfunction is even more nightmarish than anything I’ve written. PS. Bloomberg has a new piece out describing the unintentional side effects of trying to ban TikTok or WeChat:...

Unintended Consequences of Criminalizing Sex Work

We examine the impact of criminalizing sex work, exploiting an event in which local officials unexpectedly criminalized sex work in one district in East Java, Indonesia, but not in neighboring districts. We collect data from female sex workers and their clients before and after the change. We find that criminalization increases sexually transmitted infections among female sex workers by 58 percent, measured by biological tests. This is driven...

Whether its COVID or Brexit, this government is continuing to fail terribly at everything it does. Will Conservative MPs do anything about it?

Testing failureSo for many visits to grandparents are off. No one should dispute that the government needed to do something after a sharp increase in the number of positive tests. However there is also no doubt that one of the factors pushing them to act was the partial collapse of the test and trace infrastructure. Stories of people being told their nearest test was tens or even hundreds of miles away, or that no tests were available, abound,...

Capitalists in the Twenty-First Century

Summary In the 21st century, top incomes have risen due to business income and other non-wage income like interest and rent (Piketty 2014; Piketty, Saez, and Zucman 2018). Hence, recent trends raise the possibility that the financial-capital rich—those who derive most of their income from nonhuman capital—may possibly now dominate the ranks of America’s highest earners instead of the...

Monetary Finance in the Age of Corona Virus: MMT and the Green New Deal

The world is going through a remarkable transformation in the aftermath of an unprecedented shut down of economies all over the globe. Before the crisis there was already significant debate about how to pay for the costs associated with the transition to a low carbon environment. That debate has intensified as treasuries and central banks ...

Celebrating 75 Years of the United Nations

The UN embodies the best of humanity – the belief that all people deserve basic dignity, and that working together is the only way to deliver it. Seventy-five years after its birth, the world – beginning with the United States – must revive that belief, and recommit to the multilateralism that it demands. NEW YORK – As the United Nations marks its 75th anniversary, the world is in turmoil. The...

Voting G.O.P. Means Voting Against Health Care

If you or someone you care about are among the more than 50 million Americans suffering from pre-existing medical conditions, you should be aware that the stakes in this year’s election go beyond abstract things like, say, the survival of American democracy. They’re also personal. If Donald Trump is re-elected, you will lose the protection you’ve had since the Affordable Care Act went into effect almost seven years ago.The death of Ruth Bader...

Rabbit = Good Friend (or, how to take care of rabbits)

Rabbits make great friends. Unfortunately, rabbits are not as popular of a pet as they ought to be, thanks to two big misconceptions. Let's start out by busting these myths. Myth #1: Rabbits can't be litter trained. In fact, most rabbits are really easy to litter-train. Just put the litter box next to the hay feeder, and they will train themselves. Here's my setup: There are a few exceptions, just like with cats, but in general this...

If you’re going to have an ETS, you might as well use it

My column in Newsroom this week wonders what the point of National's policies promoting electric cars might be.The current incarnation of the ETS is much stronger. The cap-and-trade scheme now has an actual cap on total credits and net emissions available in the system: 32 million units are available in the system in 2021, reducing to 30 million in 2025.Previously, the Government capped prices by simply creating new credits at an ETS price of...

Capitalists in the Twenty-First Century

Summary In the 21st century, top incomes have risen due to business income and other non-wage income like interest and rent (Piketty 2014; Piketty, Saez, and Zucman 2018). Hence, recent trends raise the possibility that the financial-capital rich—those who derive most of their income from nonhuman capital—may possibly now dominate the ranks of America’s highest earners instead of the...

Hypotheses about Salt and Blood Pressure

There is a lot we don’t know about salt and blood pressure. There seems to be a positive correlation between salt consumption and high blood pressure, but a lot of that evidence could be explained by the importance of processed food as a source of salt. Processed food tends to have a lot of sugar as well as a lot of salt; if sugar raises blood pressure, that could get falsely blamed on salt. Because some of the relevant environments of...

Social Policy, Now: Next steps for income support and income insurance in Canada

Three next steps for social policy involve: 1. Maximizing auto-enrollment and just-in-time program delivery; 2. Offering full income support with engagement; and 3. Offering broad income and earnings insurance with agency. In this post I introduce the detailed discussion of these proposals that you can also download. On March 24th, 2020 the Government of Canada Tabled Bill C-13, “An Act respecting certain measures in response to COVID-19,” in...

32+ Years…

Satire of economists’ belief in markets

From the Atlantic, "The Market as God," by a Divinity professor: A few years ago a friend advised me that if I wanted to know what was going on in the real world, I should read the business pages. Although my lifelong interest has been in the study of religion, I am always willing to expand my horizons; so I took the advice, vaguely fearful that I would have to cope with a new and baffling vocabulary. Instead I was surprised to...

The Fed’s New Framework

I have a new article presenting my take on the Fed's new average inflation target (AIT). It includes an explanation of how it works compared to the Fed's previous inflation target and what it could mean for the recovery. I note that although AIT it is not quite a NGDP level target, it is a step in that direction. Moreover, it could lead other central banks to follow suit. Check it out.Also, here is an earlier piece I wrote on make-up policy...

Bridge Both the In-Person and the On-Line Educational Divides

In a new Policy Brief just released by the Stanford Institute for Economic Policy Research,  Jack Mallery and I show that In-person and online learning go together Yes, America must prioritize in-person K-12 elementary and secondary schools as soon as it is safely possible. Quality in-person learning is essential. But America must also increase on-line access whether or not in-person schools open now or later  Data available since the start of...

Jacobin pandemic

Casey Mulligan tweeted an interesting report on the coronavirus from Jacobin online magazine as "makes the most sense." Given that the Jacobins were "the most radical and ruthless of the political groups formed in the wake of the French Revolution, and in association with Robespierre they instituted the Terror of 1793–4."(google dictionary) the link attracted my ...

Paying for the right to be infected

Paying for the right to be infected August 14, 2020 in covid-19, economics, infection, Mechanism design Serious infectious diseases are a prime example of a public bad (non-exclusive and non-congestible). We limit them by restricting behavior and or getting individuals to internalize the externalities they generate. For example, one could mandate masks in public places. To be effective this requires monitoring and punishment....

What’s wrong with US Treasury claim of Vietnamese undervaluation

TweetAugust 27, 2020 — The US Treasury’s tendentious interpretation of the IMF’s External Balance Approach this week found a 4.7 % undervaluation of Vietnam’s currency.  It may pave the way for the US Commerce Department to impose countervailing duties (in a case involving the tire market), for the first time in a currency case. See Mark Sobel’s useful update of August 27. The Treasury claimed to find undervaluation despite small Vietnamese...

Stall Speed Economy

Posted on 20 September 2020 by John Mauldin, Thoughts from the Frontline When Cornwallis surrendered to George Washington at Yorktown in 1781, tradition has it that the British band played an old English children's folk tune, "The World Turned Upside Down." Please share this article - Go to very top of page, right hand side, for social media buttons. If buttercups buzz'd after the bee, If boats were on land, churches on...

Chants, rants and wurst: the return of fans to the Bundesliga

© REUTERS It’s midway through the first half and the man next to me, a red-headed chain smoker who has had a few too many, becomes so enraged with a poor refereeing decision that he accidentally kicks the chair in front of him so hard that it goes flying three rows forward. We are at ...

Jim Cramer: Oracle Has Been ‘Very Secretive’ About TikTok Talks

[unable to retrieve full-text content]

The Worst Jobs Day Ever

Driven by the COVID-19 shutdown, April marked the greatest job loss in American history. The unemployment rate skyrocketed to 14.7 percent, and employers cut 20.5 million jobs. Those figures are heart-wrenching. But as awful as they are, they do not fully capture workers’ hardships. To be counted as unemployed, people must be available for work and actively seeking it. With schools closed, job opportunities withering, and social distancing the...

Ventilators and the law of increasing opportunity cost

See As Coronavirus Hospitalizations Surge, Ventilator Manufacturing Ramps Up—but Not Quickly Enough: Hospitals need the breathing machines for critically ill virus patients but can’t get their hands on the numbers they require by Peter Loftus and Melanie Evans of The WSJ.It reminds me of  The Law of Increasing Opportunity Cost. That is the idea that as you try to produce more of one good (A), you have to keep giving up more and more of...

Call me 3380

Here is a website that uses some sort of computer algorithm to measure academic influence. Here is a ranking of most influential academics of all time. Aristotle, Darwin, Plato, Einstein, Marx, and Newton top the list. (I am number 3380.) Here is an article about recently influential economists.

The new tools of monetary policy

By Haowen Chen Since the 1980s, interest rates around the world have trended downward, reflecting lower inflation, demographic and technological forces that have increased desired global saving relative to desired investment, and other factors. Although low inflation and interest rates have many benefits, the new environment poses challenges for central banks, who have traditionally relied on cuts to short-term interest rates to stimulate...

Central Banking Stories to Watch in 2019

Happy New Year, everybody! 2018 has been a quiet year for my blog, but productive on other fronts, as I've kept busy with research and my family. But here are a few central bank-related stories I'm interested in following in the new year. 1. New Governor at Reserve Bank of IndiaFollowing the early exit of Governor Urjit Patel in December, Prime Minister Modi appointed the third central bank governor in just three years: Shaktikanta Das....

The request could not be satisfied

ERROR: The request could not be satisfied The request could not be satisfied. The Lambda function associated with the CloudFront distribution is invalid or doesn't have the required permissions. We can't connect to the server for this app or website at this time. There might be too much traffic or a configuration error. Try again later, or contact the app or website owner. If you provide content to customers through CloudFront, you can find...

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

In Memory of Bob Rossana

Robert “Bob” Rossana died back in February of this year. I was inadvertently left off of the university announcement email and did not hear about it until much later. Bob was my dissertation advisor. He meant a lot to me and so I want to share some thoughts. In graduate school, there were four macroeconomics courses. Two core classes and two field classes. Bob was instrumental in getting this four-course system started, as well as a “macro...

Who were the top taxpayers in 1923?

From page 71 of Daniel Marcin’s “The Revenue Act of 1924: Publicity, Tax Cuts, Response” div{float:left;margin-right:10px;} div.wpmrec2x div.u > div:nth-child(3n){margin-right:0px;} ]]> Advertisements

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...