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Mark Thoma

Mark Thoma

Mark Allen Thoma (born December 15, 1956) is a macroeconomist and econometrician and a Professor of Economics at the Department of Economics of the University of Oregon. Thoma is best known as a regular columnist for The Fiscal Times through his blog "Economist's View", which Paul Krugman called "the best place by far to keep up with the latest in economic discourse", and as an analyst at CBS MoneyWatch. He is also a regular contributor to EconoMonitor.

Articles by Mark Thoma

Thread

November 28, 2019

Having trouble keeping up. More thread for comments…

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Links (11/06/19)

November 6, 2019

How and why economics forgot Keynes’ warnings on panics – FT Alphaville In a new paper (hat-tip to the University of Washington’s Fabio Ghironi for drawing our attention to it), Nobel Prize winning economist George Akerlof does a brilliant job of explaining how and why, in the decades before the financial crash, macroeconomists failed to include any meaningful role of the financial system in their economic models.
The End of Neoliberalism and the Rebirth of History – Joseph E. Stiglitz For 40 years, elites in rich and poor countries alike promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. Now that the evidence is in, is it any wonder that trust in elites and

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Links (10/31/19)

November 1, 2019

Manufacturing Ain’t Great Again. Why? – Paul Krugman  When Donald Trump promised to Make America Great Again, his slogan meant different things to different people. For many supporters it meant restoring the political and social dominance of white people, white men in particular. For others, however, it meant restoring the kind of economy we had a generation or two ago, which offered lots of manly jobs for manly men: farmers, coal miners, manufacturing workers. So it may matter a lot, politically, that Trump has utterly failed to deliver on that front — and that workers are noticing. Now, many of Trump’s economic promises were obvious nonsense. The hollowing out of coal country reflected new technologies, like mountaintop removal, which require few workers, plus competition from other

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Links – Catching Up (Part 2)

October 29, 2019

Democracy on a Knife-Edge – Dani Rodrik The failure to protect minority rights is a readily understood consequence of the political logic behind the emergence of democracy. What requires explanation is not the relative rarity of liberal democracy, but its existence.
Economic Incentives Don’t Always Do What We Want Them To – Duflo and Banerjee On their own, markets can’t deliver outcomes that are just, acceptable — or even efficient.
The Phillips curve: Dead or alive – VoxEU The apparent flattening of the Phillips curve has led some to claim that it is dead. The column uses data from US states and metropolitan areas to suggest a steeper slope, with non-linearities in tight labour markets. We have been here before – in the 1960s, similar low and stable inflation expectations led to the

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Links – Catching Up (Part 1)

October 29, 2019

No, We Don’t “Need” a Recession – J. Bradford DeLong I recently received an email from my friend Mark Thoma of the University of Oregon, asking if I had noticed an increase in commentaries suggesting that a recession would be a good and healthy purge for the economy (or something along those lines). In fact, I, too, have noticed more commentators expressing the view that “recessions, painful as they are, are a necessary growth input.” I am rather surprised by it. …
Economics’ Lack of Interest in Gender Proves: the “Dismal Science” Really Is Dismal
 – ProMarket Economists are still in the dark about the role of gender. For economics to be credible, we have to recognize that our knowledge is incomplete and learn from the diversity of humanity and experiences in our own profession.
‘It

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Thread

October 26, 2019

I hope to begin posting again soon. I needed a break.

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Links (9/25/19)

September 25, 2019

The Cost of America’s Oligopoly Problem – ProMarket An innovative new study finds substantial, increasing deadweight losses resulting from oligopolistic behavior and points to the important role that startup acquisitions—particularly by large tech firms—played in driving this trend.
Helicopter money as a policy option – VoxEU With persistently weak economic conditions becoming the norm in Europe, economists are considering increasingly unconventional policy options. One tool that has yet to be taken out of storage is ‘helicopter money’, i.e. the overt monetary financing of government deficits. This column recounts a policy debate on helicopter money that was held at LBS in April 2013 among three of the world’s leading monetary economists.
Once Upon a Time in the Banking Sector:

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Links (9/13/19)

September 14, 2019

How we make decisions depends on how uncertain we are – EurekAlert!A new Dartmouth study on how we use reward information for making choices shows how humans and monkeys adopt their decision-making strategies depending on the uncertainty of information present. The results of this study illustrated that for a simple gamble to obtain a reward, when the magnitude or amount of the reward is known but the probability of the reward is unknown and must be learned, both species will switch their strategy from combining reward information in a multiplicative way (in which functions of reward probability and magnitude are multiplied to obtain the so-called subjective value) to comparing the attributes in an additive way to make a decision. The findings published in Nature Human Behavior,

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Links (9/05/19)

September 5, 2019

Do Immigrants Threaten U.S. Public Safety? – Dallasfed.org Abstract: Opponents of immigration often claim that immigrants, particularly those who are unauthorized, are more likely than U.S. natives to commit crimes and that they pose a threat to public safety. There is little evidence to support these claims. In fact, research overwhelmingly indicates that immigrants are less likely than similar U.S. natives to commit violent and property crimes, and that areas with more immigrants have similar or lower rates of violent and property crimes than areas with fewer immigrants. There are relatively few studies specifically of criminal behavior among unauthorized immigrants, but the limited research suggests that these immigrants also have a lower propensity to commit crime than their

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Links (8/23/19)

August 23, 2019

I have been traveling and got a bit distracted by shiny objects. Here are a few links (in no particular order):

Whither Central Banking? – Lawrence H. Summers & Anna StansburyIn an environment of secular stagnation in the developed economies, central bankers’ ingenuity in loosening monetary policy is exactly what is not needed. What is needed are admissions of impotence, in order to spur efforts by governments to promote demand through fiscal policies and other means.
From Voodoo Economics to Evil-Eye Economics – Paul KrugmanAlmost four decades ago then-candidate George H.W. Bush used the phrase “voodoo economic policy” to describe Ronald Reagan’s claim that cutting taxes for the rich would pay for itself. He was more prescient than he could have imagined.
Useful Idiots and Trumpist

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Links (8/08/19)

August 8, 2019

Irving Fisher Demolishes the Loanable-Funds Theory of Interest – Uneasy MoneyIn some recent posts (here, here and here) I have discussed the inappropriate application of partial-equilibrium analysis (aka supply-demand analysis) when the conditions under which the ceteris paribus assumption underlying partial-equilibrium analysis are not satisfied. The two examples of inappropriate application of partial equilibrium analysis I have mentioned were: 1) drawing a supply curve of labor and demand curve for labor to explain aggregate unemployment in the economy, and 2) drawing a supply curve of loanable funds and a demand curve for loanable funds to explain the rate of interest. In neither case can one assume that a change in the wage of labor or in the rate of interest can occur without at

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Links (8/01/19)

August 2, 2019

Why Rate Cuts Don’t Help Much Anymore – Austan GoolsbeeNow that it has finally happened, don’t expect the Federal Reserve’s long-awaited rate cut to make all that much of a difference for the economy.
The Invention of Money – The New YorkerWhen the Venetian merchant Marco Polo got to China, in the latter part of the thirteenth century, he saw many wonders—gunpowder and coal and eyeglasses and porcelain. One of the things that astonished him most, however, was a new invention, implemented by Kublai Khan, a grandson of the great conqueror Genghis. It was paper money, introduced by Kublai in 1260. Polo could hardly believe his eyes when he saw what the Khan was doing:
Is Politics Getting to the Fed? – Robert J. BarroIn the early 1980s, the chairman of the US Federal Reserve, Paul Volcker,

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Links (7/22/19)

July 23, 2019

Why Critics of a More Relaxed Attitude on Public Debt Are Wrong – Blanchard and UbideBoth of us have recently developed arguments for a more relaxed attitude toward public debt and deficits (for example, this address by Blanchard at the European Central Bank Policy Forum, this joint discussion at PIIE, and this essay by Ubide on Vox). Not surprisingly, several counterarguments have arisen, some of which we accept, some of which we don’t. This blog addresses two arguments that we reject.
Acknowledging and pricing macroeconomic uncertainties – Hansen and SargentFalse pretences of knowledge about complicated economic situations have become all too common in public policy debates. This column argues that policymakers should take into account what they don’t know in their decision making. It

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Summer is Here

July 21, 2019

My one month old granddaughter Summer.

Both of her parents were economics majors, as were all four of her grandparents.

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Links (7/15/19)

July 16, 2019

Why Is Inflation Low Globally? – FRBSF A hot economy eventually boosts inflation. Such is the simple wisdom of the Phillips curve. Yet inflation across developed countries has been remarkably weak since the 2008 global financial crisis, even though unemployment rates are near historical lows. What is behind this recent disconnect between inflation and unemployment? Contrasting the experiences of developed and developing economies before and after the financial crisis shows that broader factors than monetary policy are at play. Inflation has declined globally, and this trend preceded the financial crisis.
Libra's dramatic call to regulatory action – Cecchetti & Schoenholtz The stated objectives of creating Libra are to improve the efficiency of payments, reducing costs and speeding

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Links (7/9/19)

July 8, 2019

Thumbs Down to Facebook’s Cryptocurrency – Joseph E. StiglitzOnly a fool would trust Facebook with his or her financial wellbeing. But maybe that’s the point: with so much personal data on some 2.4 billion monthly active users, who knows better than Facebook just how many suckers are born every minute?
Trump Is Losing His Trade Wars – Paul KrugmanDonald Trump’s declaration that “trade wars are good, and easy to win” will surely go down in the history books as a classic utterance — but not in a good way. Instead it will go alongside Dick Cheney’s prediction, on the eve of the Iraq war, that “we will, in fact, be welcomed as liberators.” That is, it will be used to illustrate the arrogance and ignorance that so often drives crucial policy decisions. For the reality is that Trump isn’t

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Links (6/29/19)

June 29, 2019

Opportunity cost, MMT and public spending – Crooked Timber … In the “chartalist” reasoning underlyng MMT, the fact that governments can issue their own sovereign currency means that there is no need to “finance” public spending by taxation; rather taxation is a tool used to manage aggregate demand so as to keep the economy fully employed but not at a point where excess demand creates inflation. That (essentially correct) position can easily slide into the (only subtly different, but radically mistaken) view that governments can spend money on anything they like with no need for any increases in taxes or cuts in other spending. As I will argue over the fold, a correct version of MMT makes no such claim. Unfortunately, while avoiding the error themselves, a lot of MMT theorists have not

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Links (6/23/19)

June 23, 2019

Notes on Excessive Wealth Disorder – Paul Krugman
In a couple of days I’m going to be participating in an Economic Policy Institute conference on “excessive wealth disorder” — the problems and dangers created by extreme concentration of income and wealth at the top. I’ve been asked to give a short talk at the beginning of the conference, focusing on the political and policy distortions high inequality creates, and I’ve been trying to put my thoughts in order. So I thought I might as well write up those thoughts for broader dissemination.
The recrudescence of zero-sum thinking – Stumbling and Mumbling
President Trump believes we live in a zero-sum world in which one country’s gain is another’s loss. This is evident in his reaction to Mario Draghi’s comment this week that additional

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Links (6/17/19)

June 17, 2019

The Decline of American Journalism Is an Antitrust Problem – ProMarket Weak antitrust enforcement set the stage for Facebook and Google to extract the fruits of publishers’ labor. We won’t be able to save journalism and solve our disinformation problem unless we weaken monopolies’ power.
Three Recommended Changes to U.S. Currency Policy – Brad Setser I have a new Policy Innovation Memo that recommends three changes to U.S. currency policy, and specifically, three changes to the U.S. Treasury’s Foreign Exchange report: …
Stage Set For a Dovish Shift – Tim Duy Expect a more dovish Fed this week, but no rate cut. Data Incoming inflation data raises questions about the persistence of the supposedly transitory weakness inflation.The April PCE report gave support to the Fed’s hypothesis, but

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Links (6/14/19)

June 14, 2019

Is Labour’s fiscal policy rule neoliberal? – mainly macro That is the charge some on the left, particularly followers a movement called MMT, have laid against Labour's Fiscal Credibility Rule (FCR). MMT stands for nothing very informative, but it is a non-mainstream left-wing macroeconomic school of thought. Bill Mitchell, one of the leading lights of MMT, has run a relentless campaign against the FCR through his blog. As my own work with Jonathan Portes helped provide the intellectual foundation for the FCR, I will try and explain why I find the neoliberal charge nonsensical. …
Bill Mitchell's fantasy about Labour's fiscal rule – mainly macro My last post about outlandish attacks from some MMTers on Labour’s Fiscal Credibility Rule (FCR) was designed to be read by

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Links (6/14/19)

June 14, 2019

Is Labour’s fiscal policy rule neoliberal? – mainly macro That is the charge some on the left, particularly followers a movement called MMT, have laid against Labour's Fiscal Credibility Rule (FCR). MMT stands for nothing very informative, but it is a non-mainstream left-wing macroeconomic school of thought. Bill Mitchell, one of the leading lights of MMT, has run a relentless campaign against the FCR through his blog. As my own work with Jonathan Portes helped provide the intellectual foundation for the FCR, I will try and explain why I find the neoliberal charge nonsensical. …
Bill Mitchell's fantasy about Labour's fiscal rule – mainly macro My last post about outlandish attacks from some MMTers on Labour’s Fiscal Credibility Rule (FCR) was designed to be read by

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Links (6/10/19)

June 10, 2019

This time might not be different ~ Antonio Fatas Estimating the probability of a recession over a short horizon has so far proven to be a challenging task for economists. Each cycle looks slightly different from the previous one and trying to come up with precise indicators of crises leads to either overpredicting them or missing their timing as some risks are underestimated. As the US enters its longest expansion ever, we are back to a discussion on whether there are any reliable indicators that can help us forecast the next turning point. Without providing an exhaustive list of all candidates, let me highlight the interaction between three statistical patterns and how they inform us (or not) about the risks ahead: …
Mar-a-Lago Comes for British Health – Paul Krugman …last year he

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Links (6/10/19)

June 10, 2019

This time might not be different ~ Antonio Fatas Estimating the probability of a recession over a short horizon has so far proven to be a challenging task for economists. Each cycle looks slightly different from the previous one and trying to come up with precise indicators of crises leads to either overpredicting them or missing their timing as some risks are underestimated. As the US enters its longest expansion ever, we are back to a discussion on whether there are any reliable indicators that can help us forecast the next turning point. Without providing an exhaustive list of all candidates, let me highlight the interaction between three statistical patterns and how they inform us (or not) about the risks ahead: …
Mar-a-Lago Comes for British Health – Paul Krugman …last year he

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Links (6/5/19)

June 5, 2019

What to Do About China? – J. Bradford DeLong By attempting to "get tough" with China, US President Donald Trump's administration is highlighting the extent to which America's star has fallen this century. If the US ever wants to reclaim the standing it once had in the world, it must become the country it would have been if Al Gore had won the 2000 presidential election.
Trump Makes America Irresponsible Again – Paul Krugman … Trump says that “TARIFF is a beautiful word indeed,” but the actual history of U.S. tariffs isn’t pretty — and not just because tariffs, whatever the tweeter in chief says, are in practice taxes on Americans, not foreigners. In fact, it’s now a good bet that Trump’s tariffs will more than wipe out whatever breaks middle-class Americans got from the 2017

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Links (6/5/19)

June 5, 2019

What to Do About China? – J. Bradford DeLong By attempting to "get tough" with China, US President Donald Trump's administration is highlighting the extent to which America's star has fallen this century. If the US ever wants to reclaim the standing it once had in the world, it must become the country it would have been if Al Gore had won the 2000 presidential election.
Trump Makes America Irresponsible Again – Paul Krugman … Trump says that “TARIFF is a beautiful word indeed,” but the actual history of U.S. tariffs isn’t pretty — and not just because tariffs, whatever the tweeter in chief says, are in practice taxes on Americans, not foreigners. In fact, it’s now a good bet that Trump’s tariffs will more than wipe out whatever breaks middle-class Americans got from the 2017

Read More »

Links (5/31/19)

May 31, 2019

After Neoliberalism – Joseph E. Stiglitz For the past 40 years, the United States and other advanced economies have been pursuing a free-market agenda of low taxes, deregulation, and cuts to social programs. There can no longer be any doubt that this approach has failed spectacularly; the only question is what will – and should – come next.
China-US Trade War – IGM Forum Question A: The incidence of the latest round of US import tariffs is likely to fall primarily on American households. Question B: The impact of the tariffs – and any Chinese countermeasures – on US prices and employment is likely to be felt most heavily by lower income groups and regions.
Does Trade Reform Promote Economic Growth? A Review of Recent Evidence – Douglas Irwin Do trade reforms that significantly reduce

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Links (5/31/19)

May 31, 2019

After Neoliberalism – Joseph E. Stiglitz For the past 40 years, the United States and other advanced economies have been pursuing a free-market agenda of low taxes, deregulation, and cuts to social programs. There can no longer be any doubt that this approach has failed spectacularly; the only question is what will – and should – come next.
China-US Trade War – IGM Forum Question A: The incidence of the latest round of US import tariffs is likely to fall primarily on American households. Question B: The impact of the tariffs – and any Chinese countermeasures – on US prices and employment is likely to be felt most heavily by lower income groups and regions.
Does Trade Reform Promote Economic Growth? A Review of Recent Evidence – Douglas Irwin Do trade reforms that significantly reduce

Read More »

Links (5/28/19)

May 28, 2019

Trump Tantrums the Dems Out of a Trap – Paul Krugman I gotta say, it was very clever of Nancy Pelosi to steal Donald Trump’s strawberries, pushing him over the edge into self-evident lunacy. As everyone knows, Trump stormed out of a meeting on infrastructure, apparently out of uncontrollable rage over Pelosi’s remarks pointing out that the administration’s stonewalling on all fronts, including raw defiance of the law requiring that it provide the president’s tax returns, obviously amount to a coverup of something (and maybe multiple things.) And Democrats should be grateful. …
Advertising as a major source of human dissatisfaction – VoxEU Although the negative impact of conspicuous consumption has been discussed for more than a century, the link between advertising and individual is

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Links (5/28/19)

May 28, 2019

Trump Tantrums the Dems Out of a Trap – Paul Krugman I gotta say, it was very clever of Nancy Pelosi to steal Donald Trump’s strawberries, pushing him over the edge into self-evident lunacy. As everyone knows, Trump stormed out of a meeting on infrastructure, apparently out of uncontrollable rage over Pelosi’s remarks pointing out that the administration’s stonewalling on all fronts, including raw defiance of the law requiring that it provide the president’s tax returns, obviously amount to a coverup of something (and maybe multiple things.) And Democrats should be grateful. …
Advertising as a major source of human dissatisfaction – VoxEU Although the negative impact of conspicuous consumption has been discussed for more than a century, the link between advertising and individual is

Read More »