The Angry Bear

by Ken Melvin Economy’s Role Economy: An Economy is a social entity’s aggregate activity of producing and exchanging goods and services. To date, a large body of knowledge about how economies work has been accumulated; a body of knowledge known as the science of economics. In a Well Functioning Economy, the requisite goods and services are efficiently produced and equitably distributed whilst all the while giving utmost consideration to Human Welfare and...

 by New Deal democrat Weekly Indicators for May 11 – 15 at Seeking Alpha My Weekly Indicators post is up at Seeking Alpha. Noteworthy this week is that mortgage rates have fallen to new all-time lows, and mortgage applications, not coincidentally, have rebounded sharply. This is good news since housing normally leads the way in economic recoveries. This is an important positive for whenever the time comes that more normal life is able to safely resume. As...

Three virus-related thoughts for Sunday There are a few posts I have been working on, but haven’t had the energy to complete.  But since I wanted to make the point, let me use this opportunity to quickly set forth a few thoughts. 1. I suspect that the virus has been “burning through the dry tinder” in March and April. At least 1/3, and possibly 1/2, of all deaths from the disease have been at nursing homes. When you consider this disease thrives on...

A very interesting paper (not peer-reviewed) by a team of Israeli scholars proposes that a more manageable exit from pandemic lockdown might be achieved by implementing a scheme in which employees go in to work for four days and then return to isolation for ten days before repeating the cycle. A variation on the proposal would have two staggered relays of workers cycling through the 14 day routine. The research has been popularized in a New York Times...

Jobless claims show new damage ongoing, but some damage repaired Now that we have more than one month of data from initial and continuing jobless claims since the coronavirus lockdowns started, we can finally begin to trace whether the economic impacts of the virus are being contained, or are continuing to spread out into further damage. Eight weeks in, the answer is mixed. First, let’s look at initial jobless claims both seasonally adjusted (blue) and...

Coronavirus dashboard: updating the 52 Petri Dishes of democracy [Note: There is no significant economic data today (Dan here…May 13)  Thursday we’ll get initial claims, and on Friday retail sales and industrial production for April, both of which will be important] Here is the update through yesterday (May 12). I will restart giving the daily increase in infections if States that have “reopened” start to increase significantly again. The preliminary...

April deflation follows a typical recessionary pattern This morning’s consumer price index for April gives us our first indication of what the coronavirus recession has done to inflation. Overall consumer prices declined by -0.8% (blue), while consumer prices excluding energy (gas) declined -0.2% (red). Note that in 2015 when gas prices collapsed, prices otherwise continued to increase, showing the underlying strength of the economy. But in March and...

Reopening Isn’t Reopening—It’s Cutting Off Unemployment Donald Trump, cheering on his “warriors” who demand that states lift their lockdown and distancing orders (where they have them), would have you believe this is about bringing the economy back to life so ordinary people can get their jobs and normal lives back.  Elitist liberals who work from home and have country estates to retreat to don’t care, but “real” people do. The reality is different. ...

I am interested in critiquing my understanding of the simplest SIR epidemiological model and also praising a critique of an effort to extend the model and guide policy developed by some very smart economic theorists. First the useful point is that this post by Noah Smith is brilliant. As is typical, Smith argues that the useful implications economic models depend on strong assumptions so economic theory isn’t very useful. He praises simple empirical...