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from Asad Zaman One of the core and central properties of markets is that they lead to increasing concentration of wealth at the top. This is because market allocations of goods and services respond to money, automatically conferring great power to those with wealth. For instance, market incentives lead to the production of luxury handbags and briefcases for plutocrats priced at $40,000+. According to the World Health Organisation (WHO), the price of one such bag can save more than 300...

All numbers as expected. Notice the use of the word ‘solid’ for all the reports? And no one talking about year over year, which eliminates much of the seasonal factors and month to month volatility. Nor do they mention that these numbers are not adjusted for inflation, which pushes the year over year numbers down to stall speed. See charts below: Highlights Retail sales proved solid in September hitting the Econoday consensus across the board: total up 0.6 percent, ex-auto...

from Peter Radford A few days ago David Ruccio posted an article titled “Crash and Learn” on the state of economics education. I want to elaborate a little further, although my usual skepticism on this subject does bridle a tad at the concept of economics education. Is that the same as “military intelligence”? Anyway, in that article is this quote: In Manchester, Diane Coyle also defends the basic methodology of economics. She says there is confusion among critics between microeconomics,...

In growth accounting, 1+1 might sometimes add up to 1,5 instead of 2. With good reasons. Or at least: with reasons. Let me explain. Economists – and others – tend to look at production when they define  ‘growth’. But we might as well look at consumption. But: what is consumption? It’s the use of stuff. And of services. But economists define it as the purchase of stuff. And services. Which leads to some problems. The value of purchases is, by definition, measured using prices. And prices...

from Lars Syll Oliver Hart and Bengt Holmström won this year’s ‘Nobel Prize’ in economics for work on applying contract theory to questions ranging from how best to reward executives to whether we should have privately owned schools and prisons or not. Their work has according to the prize committee been “incredibly important, not just for economics, but also for other social sciences.” Asked at a news conference about the high levels of executive pay, Holmstrom said, It is somehow demand...

So does the fed somehow see this as ‘improvement’ and ‘solid’? More likely to me that the Fed gets criticized for waiting too long to cut. Not that it would matter, of course… Highlights In downbeat indications on the labor market, job openings fell a sharp 7.3 percent in August to 5.443 million at the same time that hiring, instead of rising, slowed by 0.9 percent to 5.210 million. The openings number is the lowest since December last year while the hiring number is more...

from David Ruccio To read National Public Radio’s [ht: ja] article on the latest World Bank report on Poverty and Shared Prosperity: Taking on Inequality, you’d think the problem of global poverty was well on the way to being solved. Is that just wishful thinking? In terms of the headline numbers, the author of the article is correct: In 2013, fewer than 800 million people lived on less than $1.90 a day. That’s less than 11 percent of the global population. As recently as 1990, about 35...

Another bad one: It’s that other problems have become more important for these small businesses as conditions continue to deteriorate:

from Peter Radford As I awake from my self-imposed slumber and re-survey the state of economics: Nothing has changed. This is predictable, and, I submit, is the most predictable phenomenon within the ambit of the discipline. Economics is in disrepute, and its current elite are determined to keep it there. The latest ersatz Nobel prize went to a couple of guys who theorize a lot about contracts. This is the kind of work that now dominates much of economics. Tinkering with mathematics,...

No one seems to know how much weight the Fed gives to this index: Highlights The labor market conditions index came in at minus 2.2 in September, extending its soft trend this cycle. Definition The Labor Market Conditions Index is an experimental indicator compiled by the Federal Reserve to track labor market activity. It is a broad composite with 19 components. Just my imagination that this has been decelerating since the drop in oil capex? My oil related comments: Any kind...