A disappointing Powell press conference

Stocks fell by about 2.5% during Powell’s press conference, perhaps because the answers were more hawkish than expected. A few observations:1. Powell was asked whether, in retrospect, the recent monetary and fiscal policy stance had been too expansionary. It seems clear that the answer is yes, but Powell indicated that we would have to wait 25 years for future historians to answer that question. This is nothing new; the Fed never blames...

What happened to the federal minimum wage debate?

Students, union activists, and fast-food workers marched in Manhattan’s Upper West Side to demand a $15/hour federal minimum wage, April 2015.In 1912, textile workers in Lawrence, Massachusetts—mostly immigrant women from countries including Cuba, Ireland, Italy, Syria, and elsewhere—went on strike in response to wage cuts. This strike is sometimes referred to as the Bread and Roses strike, a reference to the slogan and demand inscribed on...

Relative Values (with special reference to the antebellum period)

This is the second post related to Sharon Ann Murphy’s recent paper "The Financialization of Slavery by the First and Second Banks of the United States," in the Journal of Southern History (Murphy 2021). I started it several months ago, but just got around to finishing it. As with another paper published earlier this year in Enterprise & Society, Murphy converts monetary figures from the first half of the nineteenth century to...

Social Justice Thrives in Cook County during Tradeoff Holiday

During this terrible pandemic, a silver lining has been that many inconvenient tradeoffs no longer apply. A Yale study showed that paying people not to work does not, for the time being, prevent anyone from working. Perhaps also emptying the prisons can enhance public safety. We can have social justice and safety at the same time.Figure 1 below shows points-in-time numbers of people in Illinois prisons who were convicted in Cook County and...

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...

Census Pulse Survey for ND

Business conditions and the return to “normal” (hardly an objective term) are a frequent topic of discussion on the radio. The Census Bureau conduct a survey and it does break it out by state looking at business conditions relative to pre-pandemic circumstances as well as other questions. I am pulling out some of the highlights from the survey round complete 12/26/2021. So what did I learn? About the same percentage of firms report no...

Using Chained Quantities when Relative Prices Change a Lot

Usually, summing up chained quantities yields relatively small errors. However, when relative prices change a lot, then the differences can be large. That’s the case with relative prices of consumption since the pandemic. Hence, the sum of the components does not equal the total for consumption. Figure 1: Personal consumption expenditures (blue), and arithmetic sum of PCE services, PCE nondurables, and PCE durables (brown), all in...

On the Necessity and Desirability of CBDC

Remarks prepared for P2PFISY Panel Discussion, December 1, 2021 At a conceptual level, CBDC is a compelling idea. It envisions everyone having an account with the central bank consisting of a direct claim against digital fiat currency that can be used as a safe and efficient form of payment. Since all debiting and crediting of accounts occurs on the central bank’s balance sheet, all the costs and counterparty risks associated with...

Good Chart Checklist

Note: this was prepared for my ECON 3403 students, and is a list of all of the mistakes I commonly see in student charts. Please add your suggestions for things to add to this list in the comments - or steal, modify, and use for your own purposes!  Good Chart Check List: Is my chart self-explanatory? Does it specify Who: The population the chart shows (e.g. eligible voters, Facebooks users, people over the age of 12, Canadian citizens, etc)...

Omicron optimist, pessimist or fatalist – which are you?

Is this the point at which we should shrug our shoulders and give up? Omicron has prompted three kinds of reaction: optimism, pessimism and fatalism. The optimists argue that the variant is “nature’s vaccine”, a mild and transmissible virus that will quickly infect billions, triggering an immune response that will provide protection against deadlier variants such as Delta. The pandemic is over, and we won. The pessimists believe that,...

Central Bank Digital Currency: The Fed Speaks

The concept of a “central bank digital currency” is open to all sorts of interpretation, much of it unrealistic. To some, it sounds as if the Federal Reserve is going into competition with Bitcoin, or that the Fed is going set up accounts for individuals. These steps aren’t going to happen. The Federal Reserve takes a first step at setting expectations, without actually committing to any policy choices, in a discussion paper called “Money and...

A disappointing Powell press conference

Stocks fell by about 2.5% during Powell’s press conference, perhaps because the answers were more hawkish than expected. A few observations:1. Powell was asked whether, in retrospect, the recent monetary and fiscal policy stance had been too expansionary. It seems clear that the answer is yes, but Powell indicated that we would have to wait 25 years for future historians to answer that question. This is nothing new; the Fed never blames...

My talk at Yale on university Covid policy and how universities really work

I start with about ten minutes of remarks, and then for fifty minutes or so answer questions from Yale students.  This was at Yale’s William F. Buckley group. The post My talk at Yale on university Covid policy and how universities really work appeared first on Marginal REVOLUTION.         CommentsIn reply to steve. “Tell me, what mitigation methods do you ... by RicardoI offer you numbers. You return with vague claims and no ... by...

The evidence, and the consensus among economists, against Tory fiscal policy has grown over time

 This is an old theme with two new pieces of information. The first comes from a surveyof US economists, the majority of whom are academics (HT Jonathan Portes). As UK macro very much follows US macro, the numbers for UK economists are likely to be similar. This survey covers many issues, but I want to ...

Effects of vertical mergers on competition: evidence from the carbonated drinks industry

Summary A recent wave of high-profile mergers between firms at different points in the supply chain for a common good or service – AT&T and Time Warner, CVS and Aetna, Comcast and NBC Universal, Google and ITA Software – has reinvigorated a long-standing debate on the impact of such vertical integration on consumer welfare and market efficiency. This has potential implications for...

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 ...

How France’s Economy Is Surviving the Covid Pandemic

Yesterday I wrote about America’s surprising success in limiting the economic damage from Covid-19. Compared to expectations and compared to our handling of the 2008 financial crisis, we’ve done remarkably well. But other countries have also done well, in some cases and by some measures better. In fact, among major advanced economies, the star performer of the pandemic era, arguably, is … France.France? For as long as I can remember, U.S....

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!

Building materials

There's a bike path running through a forest. Thirty years ago, it had been well maintained. Now, it's an overgrown mess. A big branch across the path stops anyone getting past the first hundred metres. Clearing things that are past that branch won't do any good unless that first branch is cleared. Heck, if you start with stuff five hundred meters down the track, without addressing that first branch, people might even claim that there were...

Effects of vertical mergers on competition: evidence from the carbonated drinks industry

Summary A recent wave of high-profile mergers between firms at different points in the supply chain for a common good or service – AT&T and Time Warner, CVS and Aetna, Comcast and NBC Universal, Google and ITA Software – has reinvigorated a long-standing debate on the impact of such vertical integration on consumer welfare and market efficiency. This has potential implications for...

Greg Mankiw’s Rules of Thumb for His Work as an Economist

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The Canada Emergency Wage Subsidy: First steps, missteps, and next steps

The Canada Emergency Wage Subsidy can reasonably thought of as an experiment not to be repeated. This post is an excerpt from the conclusion to my forthcoming paper called “The Canada Emergency Wage Subsidy: First steps, missteps, and next steps.” Download a copy and read the full paper. The Canada Emergency Wage Subsidy as an employer-based response to the pandemic intended to prevent business closures and prevent layoffs was certainly a...

32+ Years…

Why are Google, Amazon, Meta and Micrsoft laying their own transatlantic cables?

From the WSJ:The ability of these companies to vertically integrate all the way down to the level of the physical infrastructure of the internet itself reduces their cost for delivering everything from Google Search and Facebook’s social networking services to Amazon and Microsoft’s cloud services. It also widens the moat between themselves and any potential competitors.

A New-Old Critique of Monetary Policy

Today, John Cochrane, Mickey Levy, Kevin Warsh & I spoke at a roundtable discussion on the Fed’s monetary policy at the Hoover Economic Policy Working Group. Cochrane talked about the fiscal side, Levy about the best inflation measures, Warsh about regime change, and I talked about the big deviations in policy from standard monetary policy rules. Many of the speakers had written about these issues for a year or so, but bringing them...

Stock market fall and long-term investors

 Having just plugged "portfolios for long-term investors" again, I really should opine on its message about the recent stock market decline. If you didn't see this coming and get out ahead of time, or if it was perfectly obvious to you that this was coming but you didn't get off your butt and do anything ...

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....

History Advises Biden to Match Signals with Actions in Ukraine

TweetDecember 24, 2021 — As Russian troops mass along the border with Ukraine, the White House has been calibrating its response. President Joe Biden has warned that in the event of an invasion, the US and allies would make Russian President Vladimir Putin pay a heavy price. Likely measures would particularly include economic sanctions such as a cut-off from the SWIFT payments system and turning off the new Nord Stream 2 pipeline.  Good. It is...

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

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How to beat the shorts: THG edition

THG, or the artist formerly known as The Hut Group, had a 2021 to forget.The £2bn protein-powder-slash-beauty-retailer-slash-wannabe-e-commerce-platform-provider, led by sun’s-out-guns-out chief executive Matt Moulding, saw its stock crater by 71 per cent over the course of the year as concerns over its governance, its Shopify-competitor-to-be arm Ingenuity, its relationship with SoftBank, and its gyrating strategic direction caused...

US First Quarter GDP: Recovery or Just Another Rebound?

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Another Semester Has Started

Welcome to any new students. The weekly entries usually have something to do with a basic economic principle that is related to a recent news story.Here is something I wrote for The Ranger (the school paper of San Antonio College where I used to teach) back in 2011 titled "Why is college so hard?"Students might wonder why college, and SAC in particular, is hard. This might sound trite, but I think the faculty at SAC want students...

History of Economics Summer Camp

Readers of this blog might like to know: The Center for the History of Political Economy at Duke University will be hosting another Summer Institute on the History of Economics this summer from June 20-29, 2022. The program is designed for students in graduate programs in economics, though students in graduate school in other fields as well as newly minted PhDs will also be considered. More information on the Summer Institute is available at...

Resistance to Erdoğan’s encroachment at Turkey’s top university, one year on

By Kemal Kirişci, Mine Eder, Mert ArslanalpThe start of 2021 was shocking as mobs attacked the U.S. Capitol, the bastion of American democracy, in an attempt to stop the certification of the presidential election. Simultaneously and far from the United States, a less conspicuous onslaught on another bastion of liberal democratic values unfolded when Turkish President Recep Tayyip Erdoğan arbitrarily appointed a hand-picked rector to run...

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...