Tag Archives: US/Global Economics

by Joseph Joyce The New Trade Wars The U.S. and China are headed down a road of retaliatory trade restrictions. Stock prices are falling in response to the impact of such measures on corporate profits, while U.S. firms reconsider their global supply chains. But one curious aspect of the situation is why it has taken this long to flare up. The “global imbalances” of the early 2000s were the Chinese trade surpluses and the U.S. deficits. These received...

May personal spending returns to typical late cycle pattern The consumer continues to do okay. That is the message from personal income and spending as reported for May this morning. First of all, let’s compare the YoY% growth in real personal spending (blue) with real retail sales (red): For the last 50 years, during all business cycles but one, retail sales rose faster than, and ran ahead of, spending during the first part of the cycle, and...

Excerpts from “The Effect of an Eight Hours’ Day on Wages and the Unemployed” by  Charles Beardsley, Jr. (The Quarterly Journal of Economics, Vol. 9, No. 4 (Jul., 1895), pp. 450-459): The argument of workingmen that the general adoption of an eight hours’ day would raise wages and absorb the unemployed is well known. A reduction in hours of work would be equivalent to the withdrawal from the ranks of men now employed of a certain number of laborers. The...

Refurbishing The Trump Economics Team Rumors are floating on the internet that NEC Chair Lawrence Kudlow is looking for new people to join the team advising President Trump on economics.  Of course, the obvious place to start would be with him, a non-economist, although he has played one on TV a lot, who also has one of the worst documented forecasting records around, poo-pooing both the housing bubble and the early signs of the Great Recession a decade...

The yield curve is already signaling a slowdown Throughout this expansion, I have had a sneaking suspicion that the yield curve (the difference in interest rates between short and long term bonds) would be the indicator most likely to fail. Originally that was because we are in a very non-inflationary period similar to that which prevailed between the 1920s and 1950s. After 1929, at no time during the 1930s, 1940s, or early 1950s did the yield curve...

(Dan here…more to come) by Joseph Joyce On the Road to…China I have just returned from the 4th HenU / INFER Workshop on Applied Macroeconomics in Kaifeng, China, which was organized by Makram El-Shaghi and Zhang Lin. There were many interesting presentations that are listed in the program.

For a Fiscal Neutrality Amendment Against the dogmatic ignorance of a proposed amendment to the US constitution mandating a balanced budget, I propose an alternative, a fiscal neutrality amendment: “No unit of government within the United States may establish voting or other decision procedures that embody a bias in favor of either higher or lower tax rates and revenues.  The federal government may not adopt voting or procedural restrictions that bias...

The Mezzogiorno Problem Revisited I have recently returned from participating in a conference in Naples, Italy on “The Economy as a Complex Spatial System” where there many papers and much discussion about the longstanding poverty problem in southern Italy, long labeled “the Mezzogiorno problem.”  Mezzogiorno literally means midday or noon, but has long been applied to southern Italy because it is sunny, and middays are supposedly sunny.  Unfortunately...

(Dan here….lifted from comments, lightly edited for readability) by Dale Coberly I’ll offer my own answer to the question. (of Morality in Capitalism post here) “Capitalism” offers itself as the answer to morality. always in some version of the Ayn Randian “life is time and time is money so taxes are not only theft, they are murder.” The truth is there is no conflict between capitalism and morality any more than there is a conflict between capitalism and...

I almost always agree with Kevin Drum who is, among other things, a brilliant economist even thoug (or largely because) he didn’t study economics much in college. But I don’t entirely agree with his one minute explanation of the importance of the yield curve for macroeconomic forecasting. the ever-fascinating yield curve, which tracks the difference between long-term and short-term treasury bond yields. Normally the long-term yield is higher to compensate...