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Inflation in the Euro Area is high and erodes the purchasing power of many (but not all) incomes. Bad. But it will be transitory. And there is no indication of endogenous macro-economic instability. Why do I think this? I’ll first discuss the (largely) transitory nature of the present price increases, macro (in)stability comes next. Graph 1 shows two metrics of inflation. The first is based on the ‘normal’ consumer price index, but this time without energy and without...

from Dean Baker I’m not worried at this point about a deflationary spiral, but I see what, to my view, is a plausible scenario where the CPI actually goes negative in the next twelve months. I go through the categories and my predictions component by component below, but there are four main items driving the story that I’ll mention here. First, I assume a sharp reversal in new and used car prices. The 11.1 percent increase in the former and 31.4 percent increase in the latter, have added...

I stumbled upon this article riding home yesterday. It is a pod cast called: On the Media. I catch it at times on my local NPR. Some very intriguing discussions are presented. This one is very timely considering the great dropout in the work force. Or, “resignation” as it is being called. It caught my attention because of what just might be a new interest in unions? Take this Job and Shove It: The article is about 1 hour long. It looks...

 by New Deal democrat Weekly Indicators for December 6 – 10 at Seeking Alpha My Weekly Indicators post is up at Seeking Alpha. While stock prices made a new record yesterday, the more significant change this week was that Omicron most likely has already put a dent in peoples’ dining plans, as restaurant reservations declined significantly. Also, the weekly measure of consumer spending continues to be strong, even though real wages...

Following my <i>cri de coeur</i> about the limited scope for progressive analysis now that Labor has adopted almost the whole of the LNP economic program, I got a number of useful suggestions, one of which was a detailed analysis of Labor’s most prominent spending initiative, the $10 billion social housing fund. This idea raises a lot of issues, so I’m going to tackle it a bit at a time First up, is $10 billion a lot, or a little. There was a time when programs like this...

Apology from the editor This post has been withdrawn on grounds of misattribution.  But the readers’ comments, which relate to the section beginning on page 50 titled “Adam Smith and the Birth of Western Economics” in Economies and Cultures: Foundations of Economic Anthropology by Richard R Wilk and Lisa C. Cliggett | Jan 2, 2007 have been retained. 

from Lars Syll “Mediation analysis” is this thing where you have a treatment and an outcome and you’re trying to model how the treatment works: how much does it directly affect the outcome, and how much is the effect “mediated” through intermediate variables … In the real world, it’s my impression that almost all the mediation analyses that people actually fit in the social and medical sciences are misguided: lots of examples where the assumptions aren’t clear and where, in any case,...

A few years ago, I got enthusiastic about the prospects for self-driving vehicles, and wrote a couple of posts on the topic. It’s now clear that this was massively premature, as many of the commenters on my post argued. So, I thought it would be good to consider where and why I went wrong on this relatively unimportant issue, in the hopes of improving my thinking more generally. The first thing I got wrong was overcorrecting on an argument I’d made for a long time, about the...