Tag Archives: Uncategorized

from Jim Stanford I was somewhat surprised to see Stephen Poloz recently urging economists to do more work identifying and disseminating research on the supposed benefits of free trade.  That’s slightly beyond his job description (perhaps more fitting with his last position as head of Export Development Canada).  But like economic leaders elsewhere in the world, Mr. Poloz is obviously concerned with the disintegration of popular support for neoliberal free trade deals.  That...

Fed continues to fail to achieve it’s 2% target: No sign here of housing growth picking up from where it’s been: Highlights The new home sector picked up steam in the third quarter and looks to end the second half with strength. The housing market index held on to the bulk of its 6-point surge in September, coming in at 63 for October in only a 2 point slip. Home builders are very optimistic about future sales, the leading component of the report which is at 72 and up 1...

from David Ruccio We’ve just learned that the corporate payouts—dividends and stock buybacks—of large U.S. firms are expected to hit another record this year. At the same time, John Fernald writes for the Federal Reserve Bank of San Francisco that the “new normal” for U.S. GDP growth has dropped to between 1½ and 1¾ percent, noticeably slower than the typical postwar pace. What’s the connection? Fernald, as is typical of many others who have concluded the United States has entered a...

Well below expectations and further contraction: Highlights The first indication on October’s factory conditions is negative. The Empire State index is below zero for a third month in a row, at minus 6.80 vs similar readings in September and August. And the details are almost entirely negative with new orders at minus 5.60 for a second sub-zero score in a row. Shipments are at minus 0.60 with employment in reverse for a fourth straight month, at minus 4.70. Unfilled orders...

from Peter Radford Really. I am hardly alone in ranting on about economics, but it never changes. How can it? The intellectual honesty required to make the sort of shift needed to recapture the discipline’s honor simply doesn’t exist. Its practitioners are too deeply embedded and ingrained. Its students are too intimidated by the burden of its closed social pressures. Nowhere is there a leader willing to take on the mantle of righting the ship. So it continues to wallow low in the water,...

In the EU, house prices are Increasing too fast (graph 1). Yes, I do know that the general price level is rising, too. And I do know that wages are increasing even somewhat faster than the general price level – which mitigates problems. While, a problem in its own right, in Italy and Greece house prices have been declining for years and are still declining. And almost nowhere the record levels of 2007 have been reached (graph 2). But that does not matter. House prices are increasing too...

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...