Tag Archives: US/Global Economics

More evidence of increasing deflationary pressure on wages One of my pet peeves is that economics as a discipline needs to import the entirety of learning theory from psychology, not just parlor tricks like the endowment effect.  For example, learning from models. To wit, once Jack Welch was successful in using a pay scheme at GE that ensured that a given percentage of employees would not get a raise in any given year, it was inevitable that other...

My plan for Europe. In comments JackD asked me what I thought of Italy leaving the Eurobloc. The problem is that it is easier said than done — the instant it becomes a serious possibility there will either be the mother of all bank runs or a banking holliday. Everyone (including your humble blogger) will want to get our hands on paper Euros which can’t be converted into Lire or Italos or whatever. So it has to be done quickly and by surprise — oh and...

The extreme conflict between the establishment and the new natonal populist majority in Parliament has spooked investors. The difference between the Italian and German 10 year treasury rates just jumped up about 100 basis points. This isn’t a crisis yet. I recall back when Italia caught a bit of Greek contagion (before ECB president Mario Draghi said “whatever it takes”) that the experts at the tesoro said they could handle interest rate spreads up to...

Updated This past weekend, I was in North Adams, Ma.  We did some exploring of the area and came across a company started in 1837 that still exists today in Buckland.   It no longer produces there, as it has moved to Westfield, Ma.  It’s only move in 178 years.   However, it has not survived the trend of Capital Investment companies.  Though, their being purchased does not appear to be a bad thing based on their website. This picture I took is why I am...

Carlo Cottarelli was asked to try to form an Italian government by President Sergio Mattarella. There is no chance that Cottarelli will obtain the confidence of Parliament (parties including a majority of deputies have brought up the possibility of impeaching Mattarella for nominating Cottarelli). Mattarella is using his extraordinary powers to fight populist nationalists who disrespected the Euro. Cottarelli is an odd choice for an anti-anti-globalist —...

(literally the surrender of Conte but a reference to The Big Gundown). updated to comply with the Italian criminal code (which forbids vilifying the President of the Republic) I have to write about Italian politics, because everyone is (and I live in Rome) but you don’t have to read it. I will try one paragraph of background. In the last election angry Italians gave a very thin majority to two extremist parties the movimento 5 stell and La Lega Nord is...

I wrote about how high house prices are correlaed with poor growth (partly because that which has gone up goes down). The data set was heroically collected by Jorda, Schularick, and Taylor who also used it for a paper which is actually very worth publishing (and published here). They find that high housing prices and rapid growth of total credit are correlated with greater severity and duration of the next recession.. I wonder if the bubble and credit...

Regulation: A Gut Check How do we get the word out that our underlying conception of how regulations should be designed and enforced needs to change? The New York Times has an ominous article about the overuse of antibiotics by the livestock industry and its risks for animal health and ours.  Flooding our digestive system with these drugs damages the gut microbiome we depend on for nutrition and waste processing, and it promotes the evolution of...

$3 a gallon gas has returned! According to GasBuddy, as of this morning the average price of gas in the US is $3 a gallon: This is the highest in 3 1/2 years.  YoY gas prices are up a little over 25%. I suspect that this is a significant psychological threshold. While it’s not a “shock,” which historically has caused Americans to cut back their spending by double the increased amount that they spend on gas, causing a recession, it might very well...

Gorz: “The Right to an Income and the Right to Work,” part one From “Orientations and Proposals — The Reduction of Working Time: Issues and Policies” of Andre Gorz’s Critique of Economic Reason (1989) translated by Gillian Handyside and Chris Turner. I am posting the section on “The Right to an Income and the Right to Work” in two parts. This is part one: The Right to an Income and The Right to Work When the production process demands less work and...