Navigating the debt legacy of the pandemic

By M. Ayhan Kose, Franziska Ohnsorge, Naotaka SugawaraCOVID-19 has left a legacy of record-high debt and shifted the trade-offs between benefits and costs of accumulating government debt. How do these trade-offs manifest themselves? And how does the current debt boom compare with previous episodes? We argue that the debt legacy of the pandemic is exceptional by historical standards in a way that warrants prompt policy action.  The pandemic’s...

Weekend reading: Why stable schedules matter edition

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context. Equitable Growth round-up Long before the...

The Financial History of Slavery in the United States

This post was prompted by Sharon Ann Murphy’s recent publication of "The Financialization of Slavery by the First and Second Banks of the United States," in the Journal of Southern History (Murphy 2021). The paper has been getting a lot of attention on twitter. As it should. But it got me thinking more broadly about the progress that has been made in the last decade or so on the financial history of slavery in the United States....

Childcare in “Build Back Better”

Section 23001 of the "Build Back Better" bill would use the Obamacare mold to create a federal childcare program. Low-cost (a.k.a., "low quality") childcare would prohibited unless the provider were to forgo all federal dollars, which would involve something like having zero children from a family at or below $200K annual income.Childcare workers would have to be paid as much as elementary-school teachers.According to the...

IEA World Congress 2021

A few words on the International Economics’ Association online World Congress, July 2-6, on the theme “Equity, Sustainability and Prosperity in a Fractured World.” Here is the home of the World Congress where you will find details on all the info below, registration links, and more https://ieawc2021.org/ The IEA World Congress is co-sponsored by the Indonesian government and was originally scheduled to take place in Bali, Indonesia in July...

Labor Force Participation in ND and US

The radio audience is often interested in labor market matters such as wages and employment. The September “Employment Situation” from the Bureau of Labor Statistics (available here) makes it clear COVID adjustments still impact the data. We need to confront not just sharp breaks in the data series, but actual changes in preferences for work and other structural adjustments. This situation is not likely to fully resolve itself anytime soon....

Treasury Ten Year Yield Forecasts

Little changed from July, at least from the Wall Street Journal’s survey of economists: Figure 1: Interest rate on 10 year Treasury bond actual (black), mean forecast from November 2020 WSJ survey (salmon inverted triangle), from July 2021 (green triangle), from October 2021 (pink square), and August 2021 Survey of Professional Forecasters. Source: Federal Reserve Board via FRED, WSJ (various surveys), and Philadelphia Fed. Unlike the...

EEA-ESEM Panel: Macroeconomic Consequences of the Pandemic

I was recently asked whether I'd like to share my thoughts on monetary policy in a post-pandemic world. Sure, why not? Thanks to Jan Eckhout for thinking of me. The panel was hosted by the European Economic Association last month and moderated by Diane Coyle. I was honored to speak alongside Ricardo Reis and Beata Javorcik, both of whom provided riveting presentations. For what it's worth, I thought I'd provide a transcript of my remarks...

13 facts every Canadian economics student needs to know

1. Canada is a big country ...but not as big as one might think. Some maps show Canada as an enormous country, about twice the size of China or the US, similar in size to the entire continent of Africa: However maps like the one shown above distort the size of northern countries, making them appear much larger than they actually are. (This video explains why all world maps are wrong.) The "Peters projection" world map distorts the...

Cogs and Monsters and Dungeons and Dragons, oh my!

Lots of intriguing books on deck this week! Jon Peterson’s “Game Wizards” is an in-depth history – and I really do mean in-depth – of the creation of Dungeons and Dragons and in particular the ugly struggle for control of TSR. It’s vivid and incredibly well-researched, although this particular niche is… well, it’s very niche. Robin Wigglesworth’s excellent “Trillions” is at the other end of the scale: Robin describes the invention of the...

Interview with Rucker Johnson: Supporting Children

Douglas Clement interviews Rucker Johnson about his research in the Fall 2021 issue of For All, published by the Opportunity & Growth Institute at the Minneapolis Fed (“Rucker Johnson interview: Powering potential,” subtitled “Rucker Johnson on school finance reform, quality pre-K, and integration”). One of the themes of the interview is the potential for gains to both equity and efficiency from supporting socioeconomically disadvantaged...

A bad economy doesn’t mean monetary policy is off course

The economy is currently beset by all sorts of problems, mostly related to supply-side problems. And yet, I see no evidence that monetary policy is significantly off course.There are some reasons to worry that monetary policy is too expansionary. Inflation is above target and wage inflation (a far more important indicator than price inflation) is at 4.6% over the past 12 months. And yet NGDP growth over the past 18 months is running at an...

Some of them are frauds

The panel also seemed intrigued by preliminary data suggesting that Johnson & Johnson recipients may be better off with a booster shot from Moderna or Pfizer. Although no vote was taken, Dr. Peter Marks, who oversees the F.D.A.’s vaccine division, said regulatory action to allow boosters with a different vaccine was “possible.” While some experts emphasized that the data was based on small groups of volunteers and short-term findings,...

How many people is Johnson allowing to die as a result of abolishing all COVID restrictions in July?

 Of course it is impossible to know for sure. However the following graph is suggestive.Since Johnson abolished all English COVID restrictions, including mask wearing on 19th July, UK cases have oscillated around a number like 500 per million. In contrast, Spain (which had a similar Delta peak to the UK) has seen cases gradually falling ...

US immigration: effects on wages, internal migration, and welfare

Summary Concerns in some quarters about the number of low-skill migrants coming to the United States in recent years have led to proposals for stricter immigration policies, including preferences for high-skill workers and the construction of a wall on the US border with Mexico. New research provides a framework for assessing who would lose and who would gain from such policies. The...

An Interview with Roger Farmer by Phil Armstrong: Part 4 of 4: On Modern Monetary Theory

An excerpt from Chapter 5 of  Can Heterodox Economics Make a Difference, published by Edward Elgar in 2020. Here is a link to the Table Of Contents, and a link to the biographies of all those interviewed for the project.   “If the question is ‘what determines the price level?’, which I do take to be a useful question, I’m ...

Competition and Coexistence

Just when the world needs to come together to tackle the pandemic and mobilize a response to climate change, geopolitical tensions are rising, threatening the prospects of cooperation. The situation demands a level of global statesmanship that has yet to materialize. STOCKHOLM – These are demanding times. Geopolitical tensions are rising, primarily – but not exclusively – between China and the...

The Fed Shouldn’t Make a Call on Inflation Yet

What’s happening to inflation? We know, of course, what the current numbers say: Inflation is high right now, although not 1970s high. But is this a blip or the beginning of a longer-term problem? Economists are deeply divided. I’m basically for the former, on what has come to be known as Team Transitory, but I might be wrong — and the data are sufficiently ambiguous that both sides can claim that the evidence supports their take.Yet...

Noahpinion has moved to a new website!

Well folks, it's been a fun 10-year run at this little website. I'm moving on to a new platform: Substack! Here's the new Noahpinion:https://noahpinion.substack.com/Thanks for reading, and hope to see you at the new site!

Held to ransom by the unvaccinated

It is not a pleasant calculus.New Zealand apparently really only has 186 fully staffed ICU beds. The rest is potential surge capacity with staff who've had only short bootcamp training. Vaccinated people can still catch Covid, but they're very unlikely to wind up in ICU. Alberta's population is a bit smaller than New Zealand's: 4.4m to our 5.1m. They put up all their vaccine outcome stats, from their very large ongoing outbreak.Just look at...

US immigration: effects on wages, internal migration, and welfare

Summary Concerns in some quarters about the number of low-skill migrants coming to the United States in recent years have led to proposals for stricter immigration policies, including preferences for high-skill workers and the construction of a wall on the US border with Mexico. New research provides a framework for assessing who would lose and who would gain from such policies. The...

Open Skepticism and Closed Skepticism

I am a believer. I am also a skeptic—an open skeptic. For almost 40 years, I believed Mormonism. Toward the end of that time I also believed critics of Mormonism and believed in evolution as something so important, it should play a more central role in my vision of life and the universe than it did in Mormonism. Now I have come to a good place as a nonsupernaturalist who appreciates the important truths that traditional religions—including...

The Great Gatsby, then and now

This post is excerpted and adapted from my introduction to The Century Press edition of F. Scott Fitzgerald’s The Great Gatsby. I’m grateful to the Press for the opportunity to introduce this great novel from an economist’s perspective, and to be part of its handsome leather bound and letterpress first edition. Go to https://www.centurypress.ca/products/the-great-gatsby-pre-order to learn more about a book that is as much pleasure to hold as...

32+ Years…

How to sequester carbon cheaply: buy a coal mine!

Each ton of burned coal produces 2.5 tons of carbon dioxide. A coal mine sells for about $1/ton of coal reserves.  It costs about $100/ton to take the resulting carbon dioxide out of the air and sequester it.  So, rather than burning coal and paying $100/ton to sequester the resulting CO2, why not buy the coal mine and close it, for only $0.40/ton of CO2.  Am I missing something?HT:  Marginal Revolution

New Principles of Economics Now Available

I am very happy to say that the new edition of Principles of Economics v9.1 is now officially published. Here is where you can find it on the FlatWorld web page: https://catalog.flatworldknowledge.com/catalog/editions/principles-of-economics-9-1.  It has been pleasure for me to continue to work on this edition with Akila Weerapana of Wellesley College, who brings terrific experience and knowledge of teaching basic economic principles. The...

Build back sausage

Inspired by Casey Mulligan's blog post, I went to read some of the "Build Back Better" bill. (Is it just me, or doesn't "Build Back Better" sound a lot like "Make America Great Again?") Heavens, not the whole thing -- that's way beyond me. I just read the first half of the child care tax credit, ...

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....

El Salvador exemplifies the surrealism of cryptocurrencies

TweetSeptember 26, 2021 — El Salvador this month became the first country to adopt a cryptocurrency, Bitcoin, as legal tender.  One says “the first” as if there will be others.  But the idea is highly dubious. I will admit, like many economists, that I fail to see what problem cryptocurrencies solve. They aren’t well designed to fulfill any of the classic functions of money — unit of account, store of value, or means of payment – in part...

Global Economic Intersection Analysis Blog Feed 1970-01-01 00:00:00

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The Bank of England is in a tight spot

Near the beginning of the Coen brothers’ classic O Brother Where Art Tho? our three escapee heroes find themselves in a barn surrounded by local law enforcement, with no clear way out — leading George Clooney’s Ulysses McGill to proclaim: “Damn, we’re in a tight spot!” Bank of England governor Andrew Bailey and his eight fellow members of the monetary policy committee might empathise. In comments reported by the FT over the weekend,...

US First Quarter GDP: Recovery or Just Another Rebound?

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How Economists Put A Price Tag On Your Life

By James Broughel. He is a senior research fellow at the Mercatus Center. Excerpts:"One common metric economists rely on is the value of a statistical life (VSL), which is a measure of how much money a group of individuals is willing to pay to reduce the probability of its members dying. For example, workers in a relatively dangerous industry like construction receive higher wages than they might otherwise get elsewhere. Given the...

Two Ways to Tell the Story

From Paul Krugman today:The most famous example is the research that Card conducted along with the late Alan Krueger on the effects of minimum wage. Most economists used to believe that raising the minimum wage reduces employment. But is this true? In 1992 the state of New Jersey increased its minimum wage while neighboring Pennsylvania didn’t. Card and Krueger realized that they could assess the effect of this policy change by comparing...

Navigating the debt legacy of the pandemic

By M. Ayhan Kose, Franziska Ohnsorge, Naotaka SugawaraCOVID-19 has left a legacy of record-high debt and shifted the trade-offs between benefits and costs of accumulating government debt. How do these trade-offs manifest themselves? And how does the current debt boom compare with previous episodes? We argue that the debt legacy of the pandemic is exceptional by historical standards in a way that warrants prompt policy action.  The pandemic’s...

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....

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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...