Tuesday , July 23 2019
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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

Links (7/22/19)

10 hours ago

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

2 days ago

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)

7 days ago

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)

15 days ago

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)

24 days ago

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

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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

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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

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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

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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

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Links (5/24/19)

May 24, 2019

Raj Chetty’s plan to change how Harvard teaches economics – Vox Raj Chetty, a prominent faculty member whom Harvard recently poached back from Stanford, this spring unveiled “Economics 1152: Using Big Data to Solve Economic and Social Problems.” Taught with the help of lecturer Greg Bruich, the class garnered 375 students, including 363 undergrads, in its first term. That’s still behind the 461 in Ec 10 — but not by much.
Fiscal Policy Options for Japan – Blanchard and Tashiro For many years, the Japanese government has promised an eventual return to primary budget surpluses, but it has not delivered on these promises. Its latest goal is to return to primary balance by 2025. Blanchard and Tashiro, however, argue that, in the current economic environment in Japan, primary deficits may be

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Links (5/22/19)

May 22, 2019

Robo-Apocalypse? Not in Your Lifetime – J. Bradford DeLong Not a week goes by without some new report, book, or commentary sounding the alarm about technological unemployment and the "future of work." Yet in considering the threat posed by automation at most levels of the value chain, we should remember that robots cannot do what humans cannot tell them to do.
The Economy Is Strong. So Why Do So Many Americans Still Feel at Risk? – Jacob Hacker President Trump is running for re-election on the strength of the economy, and why not? The unemployment rate is lower than it’s been in five decades. The stock market is booming. Overall economic growth has been steady. There’s just one problem: Voters are not particularly enthused about it. Recent polls suggest a substantial majority of Americans

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Links (5/20/19)

May 20, 2019

Don’t Give Trump Too Much Credit for the Soaring Economy – Alan Blinder In recent weeks, any number of commentators have taken note of what might be called the “paradox of polling” under President Donald Trump. Specifically, the president gets high marks from the public for his handling of the economy but low approval ratings overall. That disjunction is unusual. Presidents normally get high approval ratings when the economy does well (think Bill Clinton’s second term) and low approval ratings when it does poorly (think George W. Bush’s second term). Yet in this, as in seemingly everything else, Mr. Trump is abnormal. The reasons are manifold and simple: He lies about almost everything, defies the law, violates the Constitution, disparages our foreign allies, stokes fear of immigrants,

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Links (5/16/19)

May 16, 2019

There’s a revealing puzzle in the China tariffs – Larry Summers On Monday, China announced new tariffs on $60 billion of U.S. exports, and the United States threatened new tariffs on up to $300 billion of Chinese goods. These actions were cited as the principle reason for a decline of more than 600 points in the Dow Jones industrial average, or about 2.4 percent in broader measures of the stock market. With the total value of U.S. stocks around $30 trillion, this decline represents more than $700 billion in lost wealth. This was not an isolated event. Again and again in the past year, markets have gyrated in response to the state of trade negotiations between the United States and China. The market sensitivity to threats and counter-threats in the trade war is quite remarkable. Monday’s

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Links (5/13/19)

May 13, 2019

Evolution or revolution: An afterword – Blanchard and Summers The changes in macroeconomic thinking prompted by the Great Depression and the Great Inflation of the 1970s were much more dramatic than have yet occurred in response to the events of the last decade. This column argues that this gap is likely to close in the next few years as a combination of low neutral rates, the re-emergence of fiscal policy as a primary stabilisation tool, difficulties in hitting inflation targets, and the financial ramifications of a low-rate environment lead to important changes in our understanding of the macroeconomy and in policy judgements about how to achieve the best performance.
Killing the Pax Americana – Paul Krugman O.K., they weren’t supposed to start the trade war until I got back from

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Links (5/10/19)

May 10, 2019

Trump Is Terrible for Rural America – Paul Krugman Economists, reports Politico, are fleeing the Agriculture Department’s Economic Research Service. Six of them resigned on a single day last month. The reason? They are feeling persecuted for publishing reports that shed an unflattering light on Trump policies. But these reports are just reflecting reality (which has a well-known anti-Trump bias). Rural America is a key part of Donald Trump’s base. In fact, rural areas are the only parts of the country in which Trump has a net positive approval rating. But they’re also the biggest losers under his policies. What, after all, is Trumpism? …
No Moore golden era for US monetary policy – VoxEU Stephen Moore, President Trump’s pick for the Federal Reserve Board, has been pro-cyclical in his

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Links (5/8/19)

May 8, 2019

An Industrial Policy for Good Jobs – Dani Rodrik & Charles Sabel So-called productive dualism is driving many contemporary ills in developed and developing countries alike: rising inequality and exclusion, loss of trust in governing elites, and growing electoral support for authoritarian populists. But much of the policy discussion today focuses on solutions that miss the true source of the problem.
Competitive Edge: Principles and presumptions for U.S. vertical merger enforcement policy – Equitable Growth Antitrust and competition issues are receiving renewed interest, and for good reason. So far, the discussion has occurred at a high level of generality. To address important specific antitrust enforcement and competition issues, the Washington Center for Equitable Growth has launched

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Links (5/6/19)

May 7, 2019

The economics of mobile money – VoxEU Mobile money has transformed the landscape of financial inclusion in developing and emerging market countries, leapfrogging the provision of formal banking services. This column explains how mobile money potentially helps ameliorate several areas of market failure in developing economies, including saving, insurance, and the empowerment of women. It illustrates these effects using examples from aburgeoning empirical literature and concludes that the system-wide effects of mobile money may be even greater than current studies suggest.
A Tax That Could Fix Big Tech – Paul Romer It is the job of government to prevent a tragedy of the commons. That includes the commons of shared values and norms on which democracy depends. The dominant digital platform

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Links (5/3/19)

May 3, 2019

Spring 2019 Journal of Economic Perspectives Available Online – Tim Taylor
The Economy We Need – Joseph E. Stiglitz
Leave the Renminbi Out of US-China Trade Talks – Kenneth Rogoff
The Zombie Style in American Politics – Paul Krugman
U.S. Consumers Have Borne the Brunt of the Current Trade War – NBER Digest
How climate change affects economies around the world – University of Chicago News
The Price of Everything, the Value of the Economy: A Clark Medal for Emi Nakamura! – A Fine Theorem
The effects of trade policy might be more diverse than most economists think – VoxEU
Rising income inequality exacerbates downward economic mobility – Equitable Growth
Can the Fed Control Overnight Rates? – Stephen Williamson
Fiat Bling – Nick Rowe
Theorizing about organizations – Understanding

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Links (4/27/19)

April 27, 2019

Progressive Capitalism Is Not an Oxymoron – Joseph Stiglitz
The Great Republican Abdication – Paul Krugman
Where Do Good Jobs Come From? – Daron Acemoglu
Further Thinking on the Costs and Benefits of Deficits – Furman and Summers
When Did the Blacksmiths Disappear? – Tim Taylor
Views on the minimum wage show economics to be an inexact science – mainly macro
Has the U.S. economy stagnated because its work force aged? – FRB Minneapolis
Restoring Antimonopoly Through Bright-Line Rules – ProMarket
Survival of the Wrongest – Paul Krugman
Is the Fed's Floor System Beginning to Fold? – Macro Musings
Least Squares Is But One Approach to Linear Regression – Marc F. Bellemare
Recursions for the Moments of Some Discrete Distributions – Dave Giles
Armpits, White Ghettos and Contempt

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Links (4/18/19)

April 18, 2019

The Captain Swing Riots; Workers and Threshing Machines in the 1830s – Tim Taylor
Shocks and labour cost adjustment – Bank Underground
US Firms Are Less Dynamic Than They Used To Be – PIIE
FedViews – FRBSF
Is Low Inflation Really a Mystery? – Macro Musings
Modern monetary theory: the dose makes the poison – Social Europe
U.S. Economy: Fed Needs to Start Fighting the Next Recession Now – Bloomberg
Changing policy rule parameters – FRB Cleveland
The Evolution of the FOMC’s Explicit Inflation Target – FRBSF
Shocking economics – EurekAlert
When US Market Access is No Longer a Trump Card – Tim Taylor
US achievement gaps hold steady in the face of substantial policy initiatives – VoxEU
Qualifying for the Fed – Cecchetti & Schoenholtz
Central Bank Independence Faces Another Test –

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Links (4/12/19)

April 12, 2019

Purity vs. Pragmatism, Environment vs. Health – Paul Krugman
Bad News for IV Estimation – No Hesitations
Keep the Federal Reserve I Love Alive – Greg Mankiw
Peaceful Coexistence 2.0 – Dani Rodrik
The great disinflation in emerging and developing economies – VoxEU
Changes Are Coming to the Fed's Monetary Policy Strategy – PIIE
Residual Seasonality in GDP Growth Remains after Latest BEA Improvements – FRB Cleveland
U.S. Economic Outlook and Monetary Policy – Richard H. Clarida
Minutes of the Federal Open Market Committee, March 19-20, 2019 – Federal Reserve Board
What’s Wrong With Modern Money Theory (MMT): A Critical Primer – Thomas Palley

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Links (4/9/19)

April 9, 2019

Why Does Trump Want to Debase the Fed? – Paul Krugman
Trump’s Most Worrisome Legacy – Joseph E. Stiglitz
Interview of R. Preston McAfee – Federal Reserve Bank of Richmond
Have the Indentification Police Become Overly Intrusive? – Tim Taylor
Rethinking the Phillips Curve: Inflation May Rise Modestly Next Year – PIIE
Does the Fed Know More about the Economy? – FRBSF
A Permutation Test Regression Example – Dave Giles
Identification via the ZLB and More – No Hesitations
Austerity caused Brexit – VoxEU

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