Business Cycle Indicators as of November 25th

With October personal income and September manufacturing and trade sales reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/25 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP...

Briefly Noted for 2020-11-24

Jonathan Bernstein (2020-11-19): Senate Republicans, Stop Trump’s Vote Antics Now https://www.bloomberg.com/opinion/articles/2020-11-19/senate-republicans-stop-trump-s-vote-antics-now: ‘It’s no longer enough just to acknowledge the obvious fact that Biden won… Jonathan Bernstein (2020-11-10): Donald Trump’s Antics Show Contempt for His Own Voters...

The Green Books and American Economic History

I finally had a chance to read the NBER working paper by Lisa Cook, Maggie E.C. Jones, David Rosé, and  Trevon D. Logan on The Green Books and the Geography of Segregation in Public Accommodations. They identified the locations of businesses listed in the Green Books and then analyzed how they changed over time as well as how the locations were related to other characteristics of the areas where  they were located.  Their primary conclusions...

Look at Article II of the Constitution before Censoring Trump

Article II, Section 1 of the U.S. Constitution says [emphasis added], Each state shall appoint, in such manner as the Legislature thereof may direct, a number of electors, equal to the whole number of Senators and Representatives to which the State may be entitled in the Congress....I am not a lawyer, let alone Constitutional scholar.  I welcome such scholars to engage and clarify what follows (suspecting that most of these scholars are...

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,...

Grand Forks Sales Tax Data

I took a look sales tax data for Grand Forks this week. 2020 started off well for Grand Forks, well ahead of 2019. After that there were notable drops and changes to the point where it was well below levels from previous years. In terms of the rolling total for the year we see that 2020 continues to stay ahead of the pace for 2019. There are broader concerns about the sustainability of economic performance as well as the local economic...

Business Cycle Indicators as of November 25th

With October personal income and September manufacturing and trade sales reported today, we have this picture of the NBER Business Cycle Dating Committee‘s key indicators: Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus for employment as of 11/25 (light blue square), industrial production (red),  personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), and monthly GDP...

Presidents: do you get what you pay for?

In 1915, Woodrow Wilson earned $75,000 per year, or $1.9 million in 2018 dollars, for serving as President of the United States. The current incumbent of that office receives only a fraction of that amount: $400,000 annually. Congress has increased the presidential salary three times in the past 100 years: raising it to $100,000 in 1949, to $200,000 in 1979, and to $400,000 in 2001. These rises appear as sharp spikes in the graph below. After...

We will not understand Covid until we give up debating it

Confused by the contradictory claims about the dangers posed by coronavirus? Cut through the fog with this one weird trick: stop trying to win an argument. I realise that such advice does not sit easily with the way culture has been going in Britain in general of late, and the way things have been at Westminster for as long as anyone can remember. The Prime Minister, like too many top British politicians through history, is the former...

What If All Jobs Were Potentially Part-time?

Some jobs in business and law seem to require exceptionally long hours and being perpetually on-call. Indeed, one main reason for the remaining wage gap between college-educated it's mostly men who end up in these jobs, while professional women are more likely to end up in careers where the work is full-time or part-time, but not extreme overtime (for discussion, see here and here). This pattern raises an obvious question: is it really so...

Stop obsessing over interest rates

I have a new Mercatus working paper explaining why monetary economics needs to stop focusing on interest rates. Of all the economics papers that I have written, this one best captures how my view of monetary economics differs from the mainstream. Here is the abstract: In recent years, Keynesians and NeoFisherians have debated whether a low-interest-rate policy is inflationary or disinflationary. Both sides are wrong; interest rates are...

Politicians and experts: austerity, Brexit and the pandemic

I’ll be talking about fiscal policy during and after the pandemic at a Resolution Foundation/MMF event in a week’s time: https://www.mmf.ac.uk/resolution-foundation/ I have written quite a few posts on the relationship between policy and expertise, and between expertise and the media. The better ones are in my book, but they were all written before the COVID pandemic. How does the relationship between experts on the one hand and politicians...

Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviors

Summary Which has more impact on our wealth and behavior: biology or environment? This research attempts to disentangle the role of nature versus nurture and the role of nature-nurture interactions in the intergenerational transmission of wealth. Results suggest that persistence in wealth across generations is primarily driven by environment, while biology has more impact on educational...

A Tale of Two Chinese Cities

By recognizing and investing in the strengths of pioneering cities and regions, China has developed a powerful mechanism for organizing and advancing its economic transformation. Judging by the tremendous success of Shenzhen and Shanghai, it seems clear that China will continue to reap the rewards of this approach for decades to come. SHANGHAI – On October 14, Chinese President Xi Jinping...

Trump Wars II: The Loser Strikes Back

We all knew that Donald Trump would react badly to defeat. But his refusal to concede, the destructiveness of his temper tantrum and the willingness of almost the entire Republican Party to indulge him have surpassed even pessimists’ expectations.Even so, it’s very unlikely that Trump will manage to overturn the election results. But he’s doing all he can to wreck America on his way out, in ways large and small. Among other things, his...

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!

AFR on the RBNZ

Harsh stuff from Grant Wilson at the Australian Financial Review ($):Even with the RBNZ flagging macro-prudential tightening next year, via the reimposition of loan-to-value ratios, house prices are now a de facto constraint on monetary policy. The "least regrets" formulation also assumes that the RBNZ’s approach to unconventional monetary policy, which was first articulated back in 2018, holds up. While we agree that the first round...

Poor Little Rich Kids? The Role of Nature versus Nurture in Wealth and Other Economic Outcomes and Behaviors

Summary Which has more impact on our wealth and behavior: biology or environment? This research attempts to disentangle the role of nature versus nurture and the role of nature-nurture interactions in the intergenerational transmission of wealth. Results suggest that persistence in wealth across generations is primarily driven by environment, while biology has more impact on educational...

Noah Smith Compares 2010s America to 1990s Japan

21/So I don't want to overextend the analogy here. In economic terms, and sometimes in social terms, 2010s America has followed in the footsteps of 1990s Japan. But in political terms we're responding to our slowdown in a different and decidedly more frightening way.

An Employment Insurance system for the 21st century

The 2020 Speech from the Throne boldly claims that “This pandemic has shown that Canada needs an [Employment Insurance] system for the 21st century, including for the self-employed and those in the gig economy.” That is a tall order, a major overhaul of a complicated program in the span of the next couple of months, with little or virtually no consultation of stakeholders or engagement of experts outside of the government. Will Minister...

32+ Years…

Price discrimination

Economists take care to differentiate between direct price discrimination (where you set different prices to different groups by identifying members of each group and charging them different prices) and indirect price discrimination (where you offer products or packages tailored to each group at different prices and have buyers self-select).Admittedly, I'm not sure which one this is.

Storytelling: Friday Chart Edition

I have not posted here in awhile, so I thought it would be good to share a few recent charts that tell interesting stories.Central Bank Balance SheetsFirst up, are two charts that show the relationship between the size of the central bank balance sheets and inflation rates. The first one shows for the 2010-2019 period the average size of central bank balance sheets as a percent of NGDP plotted against the average core inflation rate. Since...

Economic Policy and Foreign Policy Go Together

I gave the Peter G. Peterson Distinguished Lecture on “National Security and Fiscal Policy” at the Foreign Policy Association (FPA) in New York last week. Henry Fernandez gave a kind introduction and Tom Michaud moderated with great points. And thanks to FPA for the book edited by Michael Auslin and Noel Lateef, American in the World 2020. Four years ago, Paul O’Neill gave the Inaugural Peter G. Peterson Lecture. Pete Peterson was in the...

Stanford Condemns Atlas

On Friday Nov. 20, as reported in the official Stanford News, the Stanford Faculty Senate formally condemned Scott Atlas, Hoover Senior Fellow and a special adviser to the reviled President Trump.  The full resolution is posted here (but only available with a Stanford id)."Rise up"The resolution lists a single documented fact.in a post to his Twitter ...

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....

Biden is Better on Economics

TweetOctober 29, 2020 — In a few days, Americans will choose a president.  Polling suggests that voters favor former Vice-President Joseph Biden when it comes to social policy, foreign policy, the environment, and managing the pandemic, not to mention the question of personal character. But on economics, polls have reported that voters favored President Donald Trump, at least until recently. A general impression that the US economy does better...

A Vaccine And The “New New Normal”

Posted on 24 November 2020 by Lance Roberts, Clarity Financial Moderna and Pfizer recently announced they had potential vaccines for COVID-19 that are more than 90% effective. With that, the market surged, and a rotation into “economically sensitive" sectors occurred. While a “vaccine" will eventually come to the market, it will only ensure a return to the “New New Normal."Please share this article - Go to very top of page,...

Maradona’s contribution to monetary theory

Sad news from Argentina today. Diego Maradona, one of the most gifted footballers to ever play the game, has died. While his dribbling prowess was world renowned, fewer people know that his skills were used to construct one of the most memorable monetary policy analogies of all time. Back in 2005, then Bank of England governor Lord Mervyn King described the two goals that the Argentine scored against England in the 1986 World Cup to show how...

Leveraged Finance at Full Throttle

Real Vision senior editor, Ash Bennington, welcomes Dave Floyd of Aspen Trading Group back to the Daily Briefing to evaluate price action in the S&P 500, the U.S. 10 year Treasury note, and a variety of currency pairs. Dave shares his framework for trading these asset classes, incorporating technical indicators such as moving averages, stochastic oscillators, relative strength indicators, Fibonacci retracement levels as well as some...

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...

Is There Economic And Political Meaning In “The Wizard of Oz?”

To get a handle on this, you can read Money and Politics in the Land of Oz By Quentin P. Taylor.  Below is an excerpt from the Taylor paper: "Dorothy, the protagonist of the story, represents an individualized ideal of the American people. She is each of us at our best-kind but self-respecting, guileless but levelheaded, wholesome but plucky. She is akin to Everyman, or, in modern parlance, “the girl next door.” Dorothy lives in...

What I’ve Been Watching

I just finished The Queen's Gambit, the Netflix miniseries about a young woman who is an orphan and chess prodigy. Great show. Highly recommended.

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....

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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...