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The employment figure comes from a survey of businesses and is roughly consistent with a pace of job growth needed to keep the unemployment rate steady over time, but not nearly fast enough to bring it down. The unemployment rate is calculated from a survey of households. Unfortunately, the reason for the decrease isn't gains in employment, but rather a decrease in he labor force (the number of people who are working or looking for work, which is the denominator in the unemployment rate calculation). In the household survey, the number of people reporting that they were working decreased by 169,000, while the labor force shrank by 342,000. That brings the employment-population ratio down to 58.4 and the labor force participation rate is now 63.6.
Twenty-Cent Paradigms
"Let's make our demand for gasoline even more inelastic." Other economists suggest a gasoline tax that would increase as gasoline prices fall toward a predetermined floor and decrease as pump prices rise above it. This way, OPEC countries would be unable to manipulate prices lower so as to destroy the returns of persons risking capital in alternative-energy investments, which the cartel has adeptly done in the past. This is from Jim McTague, "Obama is Humbled by the Market," Barron's , March 24, 2012. Greg Mankiw linked to it this morning.
EconLog | Library of Economics and Liberty
CONVERSABLE ECONOMIST
Movies are usually shown to critics before being released to the general public. But about one-tenth of movies are not released. What do you as a movie-goers infer when a movie isn't released for review? But then, what is an appropriate strategy for movie studios in sending movies out for review, if they recognize what movie-goers like you are likely to infer? And what is the appropriate strategy for movie-goers, if they recognize what the movie studios are likely to infer about what they are likely to infer?
Posted by The Prince in Markets on Apr 28th, 2012 | 3 comments So where have the markets gone this week? Past the daily noise and headlines, this weekly chart heavy post will examine the major markets (debt, commodities and currencies) with the Australian investor in mind. Well its been another very interesting week on macro markets, and last night’s disappointing US GDP print puts things in doubt again about the risk-on meme, where perversely this disappointing number could mean QE3 sooner rather than later, so markets are bid up on anticipation….the unsustainable remains sustainable for now… Let’s start with the US Dollar Index (DXY)...
macrobusiness.com.au |
“A widespread lack of trust in public finances weighs heavily on growth: there is uncertainty regarding potential future tax increases, while funding costs are rising for private and public creditors alike. In such a situation, consolidation might inspire confidence and actually help the economy to grow.” – Jens Weidmann, President of the Bundesbank Confidence. This is the main argument for austerity, repeated in a thousand forms but always more or less the same.
EconoSpeak
Econometrics Beat: Dave Giles' Blog
Testing if a sample of data comes form a specific distribution is a central problem in statistics. This sort of "goodness-of-fit" testing is also important in econometrics, of course. Most goodness-of-fit tests involve "comparing" the empirical distribution function for the sample data with an hypothesized theoretical distribution.
A couple of days ago, Jens Weidmann , the President of Deutsche Bundesbank , published an op-ed about the ”origin and meaning of the Target2 balances” in Germany’s “Frankfurter Allgemeine Zeitung” and the Dutch daily “Het Financieele Dagblatt”. The Bundesbank has now also produced an English version of Weidmann’s piece. Here it is: Jens Weidmann, President of Deutsche Bundesbank: "I believe the idea that monetary union may fall apart is quite absurd."
Economics Intelligence | Olaf Storbeck on current economic research
Worthwhile Canadian Initiative
One of the things I was a little disappointed about in the recent money and banking controversy was that nobody (IIRC) picked up on my (it's not original to me) point about asymmetric redeemability. The Bank of Montreal promises to redeem its (demand deposit) dollars for Bank of Canada dollars, while the Bank of Canada does not promise to redeem its dollars for Bank of Montreal dollars. It's a one-way fixed exchange rate system between two competing currencies.Thanks to the job protections California affords to this class of public employees, the thorough, independent review available to the public and the press has no bearing on the fate of the man who inspired it; whereas whether or not he’ll continue to patrol among the very students he needlessly sprayed is determined by a secretive process wholly lacking in transparency, and accountable only to the administrative apparatus whose very failure helped cause the pepper spraying.
Bearish Market News | By Adam Sharp
When Harvard president Drew Faust , a historian, overruled her economics department in the spring of 2008 and passed up the chance to hire the husband-and-wife team of Christina and David Romer, certain compensations were set in train. Christina Romer became chairman of President Barack Obama’s Council of Economic Advisers. The University of California at Berkeley got to keep the Romers. ( David Romer is author of a leading graduate macroeconomics text.)
Economic Principals
Modern Money Mechanics | MMT simplified.
For some of you this post may seem superfluous and that is fine. For those of you that have an interest in Modern Monetary Theory (MMT) and have zero background knowledge in economics I recommend starting at the link above that says Index . As noted in the About link, it is mostly a deconstruction of Bill Mitchell’s work into what I believe to be more manageable pieces.Today’s Financial Times articles: Swiss central bank discord provides a warning bell (Feb 24), Sovereigns turn to pre-crisis financial wizardry (Feb 24) On facing pages in the print version of the FT, the reader is invited to consider the encounter of the modern state with the modern market. On the left hand page the story is about the central bank, on the right hand page the story is about the Treasury, and on both pages the story is about the continuing reverberations of the Global Financial Crisis and the changing role of both central banks and Treasuries as a consequence of financial globalization. In a piece ostensibly about the political trials of the Swiss National Bank in the face of losses after failed intervention to stem currency appreciation, Gillian Tett includes the following paragraph: “But the SNB is not the only central bank that has recently taken bold gambits.
Brave New World | Institute for New Economic Thinking
In the day job, I say that if productivity hadn’t fallen since the end of 2007, there would now be three million fewer people in work. This is just a simple mathematical claim. But it raises the question: what would have happened if productivity had kept growing at its pre-2007 rate?
Stumbling and Mumbling
Coordination Problem
|Peter Boettke| Coach Jim Larranaga is one of the most intriguing coaches in all of NCAA basketball. Peter Keating did a profile on Coach L in ESPN The Magazine last month, focusing on his use of statistics to help with establishing performance measures for his teams. Larranaga was an economics major back at Providence College, where he also scored over a 1,000 points on the basketball court. Larranaga attributes his success in coaching through the ranks of NCAA D1 schools (inclduing his great run at GMU) to analytics.I’m on vacation—a family vacation.
not an economist | A non-economist explores economics and the economy in the wake of the financial crisis
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