EconoMonitor

Economics Blog Aggregator

    United States

  • Economist's View

    'Ukraine’s Path to Oligarchy: Lessons for the U.S.?'

    After explaining why he believes Ukraine is an oligarchy, Berkeley's Yuriy Gorodnichenko says: ...One may draw parallels between the U.S and Ukraine but frankly, relative to Ukraine, the U.S. seems far from an oligarchy. However, certain recent developments do make me somewhat concerned. For example, income inequality has been rising rapidly over the last three decades, the influence of the rich and of corporations on electoral outcomes appears to be increasing, and the political process strikes me as increasingly dysfunctional. But the U.S.’s history of fighting corruption and the tradition of a free and oppositional press are powerful counterforces to oligarchy. Or so I hope....more

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  • Economist's View

    'Inequality in Well-Being'

    From the House of Debt: Inequality in Well-Being, by Atif Mian and Amir Sufi: As we mentioned in our post yesterday, economists care much more about inequality in well-being rather than inequality in income or wealth. Data on well-being are more difficult to gather, but we discussed some evidence that inequality in consumption also increased from 1980 to 2010. Consumption directly affects the utility of an individual in most economic models. Income does not. Here is some more evidence, with a particular focus on the last few years ... Another strategy in measuring well-being is to look beyond spending and toward measures of health. Life expectancy data are available, and they seem to tell a similar story...: the rise in life expectancy from 1980 to 2010 for people alr...more

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  • Calculated Risk

    Thursday: Unemployment Claims, Durable Goods, Kansas City Mfg Survey

    Nick Timiraos at the WSJ has some excerpts from a research note by Goldman Sachs economists: Why Credit Is Key for the Housing Recovery The Goldman economists say they expect new home sales to reach 800,000 units by 2017, up from 430,000 last year, based on traditional drivers such as job growth and household formation. But sales will only rise to around 600,000 units in 2017 if lending standards remain at their current levels....Nearly 40% of new borrowers last year had credit scores above 760, compared with just 25% before the housing bubble in 2001. Meanwhile, less than 0.2% of borrowers had credit scores below 620, compared to 13% in 2001.Thursday:• At 8:30 AM ET, the initial weekly unemployment claims report will be released. The consensus is for claims to increa...more

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  • All HW content

    Assurant posts strong quarter, income up $20 million from 2013

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  • The Big Picture

    10 MidWeek PM Reads

    My afternoon train reading: • Russia Bond Sales Fail on Ukraine Tension (Bloomberg) • Valuing the S&P 500 Dividend Yield (Avondale Asset Management) • A Short Introduction to Investing (in 400 words) (Above the Market) • Large Caps Are Cheaper Than Small and MidCaps (Dr. Ed’s Blog) • No, the SEC Didn’t Collude With Goldman Sachs on CDOs (Bloomberg View) • The Banks and Austerity: a simple story of the last ten years (Mainly Macro) • The single biggest cause of government data breaches is “oops” (Quartz) • A more equal society will not hinder growth (FT) see also How Progressive is the U.S. Federal Tax System? A Historical and International Perspective (Berkeley) • Spanish judge disbarred for pursuing a banking corruption cas...more

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  • All HW content

    Christopher Whalen joins Kroll Bond Ratings Agency

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  • All HW content

    CFPB pushes for eClosings

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 80 of Eamonn Butler’s 2013 monograph, Foundations of a Free Society: Enterprise is creative: people striving to produce better goods and services hit on new products, processes and technologies that improve the lives of everyone.  By stifling that enterprise and creativity, egalitarianism closes off the prospect of continual improvement in the material lives of the whole world. ...more

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  • This Is Brad DeLong's Grasping Reality...

    Noted for Your Afternoon Procrastination for April 23, 2014

    Over at Equitable Growth--The Equitablog Washington Center for Equitable Growth | Piketty Day Here at Berkeley: The Honest Broker for the Week of April 26, 2014 Washington Center for Equitable Growth | Wednesday Focus: Federal Reserve "Forward Guidance": April 23, 2014 Washington Center for Equitable Growth | Evening Must-Read: Yet Another Good Piketty Review from Suresh Naidu Washington Center for Equitable Growth | Evening Must-Read: Mary Daly et al.: Interpreting Deviations from Okun’s Law Washington Center for Equitable Growth | Evening Must-Read: Martin Wolf: A more equal society will not hinder growth Washington Center for Equitable Growth | Why I Do Not Credit Claims That America's Poor Have in Truth Been Getting Much Richer Over the Past Generation... Washin...more

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  • Econbrowser

    State Employment Trends: Does a Low Tax/Right-to-Work/Low Minimum Wage Regime Correlate to Growth – An Econometric Addendum

    The previous post on state employment trends sparked some debate regarding the generality of the negative correlation between the ALEC-Laffer “Economic Outlook” ranking and economic growth, as measured by the Philadelphia Fed’s coincident index. One reader argued four observations were not sufficient to make a conclusion, and I concur. Here, without further ado, is the correlation for all fifty states. Figure 1: Ranking by annualized growth rate in log coincident index 2013M01-2014M03 versus 2013 ALEC-Laffer “Economic Outlook” ranking. Nearest neighbor nonparametric smoother line in red (window = 0.7). Source: Philadelphia Fed, ALEC, and author’s calculations. Some of the fastest growing states are oil exporters, so in order to par...more

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  • Beat the Press

    Problems of Patent Financed Drug Research #43,783, Ignoring Non-Patentable Treatments

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  • Beat the Press

    Judith Rodin is the Director Watch Director of the Day

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  • The Big Picture

    Economic Indicators Dashboard

    Updated: April 22, 2014 Source: Russell Investments

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  • ProfessorBainbridge.com

    "Allergan Bid Charts New Territory in Takeovers"

    Typically insightful analysis by Steven Davidoff of the "Faustian" bargain between Valeant Pharmaceuticals and William Ackman’s hedge fund to make a $45.6 billion unsolicited offer for Allergan. One... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Marginal REVOLUTION

    La Ciccia (and some thoughts on role models in universities)

    That is a Sardinian restaurant in San Francisco, and it was my pick from the San Francsico dining bleg from last week.  I recommend it highly, focus on the appetizers and the pastas (uni!), as the meat dishes are less interesting. Much of the table talk was on whether the true function of universities is to expose us to a wide array of vivid role models, so we could reject most of them and accept a few, thereby giving us a motivated path forward in life.  One implication of this is that (lower-level) university athletics might be undervalued, because coaches and even fellow athletes can serve as useful role models in a way that most professors cannot.  The question also arises whether we might have more efficient ways of exposing people to vivid role models than thro...more

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  • Beat the Press

    The American Middle Class Is Doing Much Worse Than the NYT Says

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  • ProfessorBainbridge.com

    If your CEO gets knighted, that's bad for shareholders but good for CSR

    Subject to the usual disclaimers about emirical work, Knighthoods, Damehoods, and CEO Behaviour (April 3, 2014), available at SSRN: http://ssrn.com/abstract=2420066, is a very interesting paper: This... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • This Is Brad DeLong's Grasping Reality...

    Over at the Washington Center for Equitable Growth: Piketty Day Here at Berkeley: The Honest Broker for the Week of April 26, 2014

    Over at the Washington Center for Equitable Growth: It's Piketty Day here at Berkeley. So let me note that Robert Solow has another good Piketty review: Robert Solow: 'Capital in the Twenty-First Century' by Thomas Piketty, Reviewed: "Inequality... has been worsening... the widening gap between the rich and the rest.... A rational and effective policy for dealing with it... will have to rest on an understanding of the causes... the erosion of the real minimum wage; the decay of labor unions and collective bargaining; globalization and intensified competition from low-wage workers in poor countries; technological changes and shifts in demand that eliminate mid-level jobs.... Each of these candidate causes seems to capture a bit of the truth. But even taken together...more

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  • Calculated Risk

    Lawler on Meritage Homes: Net Home Orders Down despite Higher Community Count, “Less Pricing Power” Suggests Relatively Flat Home Prices for Rest of Year

    From housing economist Tom Lawler:Meritage Homes, the ninth largest US home builder, reported that net home orders in the quarter ended March 31, 2014 totaled 1,525, down 1.4% from the comparable quarter of 2013. Orders were down despite a 16% YOY increase in the company’s average community count. The company’s sales cancellation rate, expressed as a % of gross orders, was 13% last quarter, up from 11% a year ago. Home closings totaled 1,109 last quarter, up 5.4% from the comparable quarter of 2013, at an average sales price of $366,000, up 16.4% from a year ago. The company’s order backlog at the end of March was 2,269, up 15.4% from last March, at an average order price of $368,400, up 8.3% from last March.Meritage said that it owned or controlled 25,807 lot...more

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  • ProfessorBainbridge.com

    Might the Second Circuit finally be willing to do something about the vagueness of insider trading law?

    Although Congress has mandated extremely draconian civil and criminal sanctions for insider trading, it has never seen fit to define what constitutes insider trading. Admittedly, insider trading is... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • The Big Picture

    How Is Winter Weather Affecting Home Sale Data?

    Source: Calculated Risk   I have heard a fair amount of chatter about the awful winter weather’s impact on home sales. Let’s clarify the different measures in use for New and Existing Home Sales to see what we can find. U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly release the New Residential Sales data. Census notes that a “sale” is defined as a “deposit taken or sales agreement signed.” This occurs much fairly early in the house transaction process. As far as New Home Sales are concerned, the weather in March 2014 probably made only a minor impact at worst. Which makes the New House Sales slump to eight-month lows all the more significant. Continues here   ...more

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  • This Is Brad DeLong's Grasping Reality...

    Principles: Macroeconomics: Long-Run Economic Growth II

    .pdf | .ppt | .key

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  • Paper Economy - A US Real Estate Bubble Blog

    New Home Sales: March 2014

    Today, the U.S. Census Department released its monthly New Residential Home Sales Report for March showing a notable decline with sales falling a whopping 14.5% from February dropping 13.3% below the level seen in March 2013 and remaining at an historically low level of 384K SAAR units. The monthly supply increased to 6.0 months (considered fairly balanced between buyers and sellers) while the median selling price jumped 12.62% and the average selling price increased 11.33% from the year ago level. The following chart show the extent of sales decline to date (click for full-larger version). ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – April 23 2014

    The Mortgage Bankers Association (MBA) publishes the results of a weekly applications survey that covers roughly 50 percent of all residential mortgage originations and tracks the average interest rate for 30 year and 15 year fixed rate mortgages as well as the volume of both purchase and refinance applications. The purchase application index has been highlighted as a particularly important data series as it very broadly captures the demand side of residential real estate for both new and existing home purchases. The latest data is showing that the average rate for a 30 year fixed rate mortgage (from FHA and conforming GSE data) increased 3 basis points to 4.37% since last week while the purchase application volume declined 3% and the refinance application volume d...more

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  • Marginal REVOLUTION

    Assorted links

    1. Do customer ratings of restaurants award authenticity for its own sake?  And negative reviews as a way of coping with service-related trauma. 2. A criticism of Kurzweil. 3. Korean food in old Seoul. 4. How economically geared up is Russia for war? 5. UK housing prices are looking scary. 6. Do not ban chocolate milk.  And claims about cat cognition (speculative). 7. Robert Solow’s guide to Piketty.  And Kling on Solow on Piketty is completely correct. ...more

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  • Dr. Housing Bubble Blog

    The façade of a recovering housing market: New home sales collapse and supply of inventory finally reaches six months.

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  • Calculated Risk

    AIA: Architecture Billings Index indicated contraction in March

    Note: This index is a leading indicator primarily for new Commercial Real Estate (CRE) investment. From AIA: Architecture Billings Index Mired in SlowdownFollowing a modest two-month recovery in the level of demand for design services, the Architecture Billings Index (ABI) again turned negative last month. As a leading economic indicator of construction activity, the ABI reflects the approximate nine to twelve month lead time between architecture billings and construction spending. The American Institute of Architects (AIA) reported the March ABI score was 48.8, down sharply from a mark of 50.7 in February. This score reflects a decrease in design services (any score above 50 indicates an increase in billings). The new projects inquiry index was 57.9, up from the readin...more

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  • Marginal REVOLUTION

    Steven Pinker has a new book due out in September

    The title is The Sense of Style: The Thinking Person’s Guide to Writing in the 21st Century. For the pointer I thank Michelle Dawson.

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  • Greg Mankiw's Blog

    Solow on Piketty

    A review in the New Republic.

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  • naked capitalism

    Links 4/23/14

    Apologies for the absence of my own posts. I even had to turn down BBC Radio (one of their biggest shows). This is a dreadful week for me because we have to get a filing in on the CalPERS litigation. Even though I have a very able team getting a handle on what they have and haven’t provided, the data is in lousy shape. For instance, numerous variant renderings of the same fund name means that even simple exercises like trying to tally the number of fund names are not simple. As a result, I’m having to do a lot of coordination and supervision to make sure the process and results are sound. I will hopefully be closer to normal programming by Friday AM. If you are in New York City, be sure to drop by our meetup this Friday, from 5:00 to 8:00 PM at Sláinte at...more

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  • The Housing Bubble Blog

    A Feeding Frenzy, Then Everything Sort Of Stopped

    The Orange County Register reports from California. “OK, now I’m a bit worried. The local homebuying slump extended itself into the start of the traditional house-shopping season – and Southern Californians certainly can’t blame ‘bad winter weather’ for the sluggishness. DataQuick reported that it was the slowest-selling March in six years, but there’s also more to be nervous about: While March’s sales count is up 26 percent from February, that’s limited oomph for the unofficial opening of the prime house-hunting period. February-to-March sales have averaged a 36 percent increase since 1988.” “March sales were off 14 percent in a year, the sixth consecutive year-over-year drop. The five previous six-month dips were tied to t...more

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  • The Capital Spectator

    Manufacturing Employment Signals Economic Growth

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  • naked capitalism

    Ilargi: What is the Earth Worth (6 Years Later)?

    Yves here. This is a day-late Earth Day post, but the proper stewardship of this planet is a 365-day-a-year duty. Ilargi focuses on one of my pet issues, that too many of the remedies for climate change (and environmental protection generally) rely on the illusion of new technology eliminating or blunting lifestyle changes. But in most cases, this way out is illusory. It takes decades for major new technologies to be adopted widely, and we don’t have that kind of runway as far as greenhouse gases are concerned. Second, many green technology fixes merely squeeze the balloon in one place and shift the problem elsewhere. For instance, many of the solutions to water scarcity, like desalination, require energy and also produce residues that need to be disposed of. Thus...more

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  • naked capitalism

    Pettis: 11 Reasons China Can’t Escape from Its Debt Overhang

    Yves here. A certain amount of complacency has set in about China’s unsustainable economic model, simply because the Middle Kingdom has managed to stay a day of reckoning. I remember similar doubt fatigue setting in during the blowoff phase of the dot-com bubble. Even with more worrying sightings, such as distress in wealth management products (the riskiest part of China’s shadow banking system), many of the bearish sorts believe that China has enough control over its economy that it will engineer a soft landing. Yet it’s hard to ignore stories like these: My last trip to Shanghai and surrounding cities and my earlier trip in November was eye opening. A couple of years before I was in Shenzhen China vising a PC Board manufacturer to discuss $160,000 in...more

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  • Economist's View

    'Thomas Piketty Is Right'

    Solow on Piketty: Thomas Piketty Is Right: Everything you need to know about 'Capital in the Twenty-First Century', by Robert Solow: Income inequality in the United States and elsewhere has been worsening since the 1970s. The most striking aspect has been the widening gap between the rich and the rest. This ominous anti-democratic trend has finally found its way into public consciousness and political rhetoric. A rational and effective policy for dealing with it—if there is to be one—will have to rest on an understanding of the causes of increasing inequality. The discussion so far has turned up a number of causal factors: the erosion of the real minimum wage; the decay of labor unions and collective bargaining; globalization and intensified competition fro...more

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  • The Housing Bubble Blog

    Bits Bucket for April 23, 2014

    Post off-topic ideas, links, and Craigslist finds here.

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  • Cafe Hayek - Article Feed

    What’s Infrastructure?

    (Don Boudreaux) In my latest column for the Pittsburgh Tribune-Review I discuss the (ir)relevance of Pres. Obama’s (in)famous “you didn’t build that” blurt.  While I agree that Mr. Obama was referring, with this blurt, to the building of infrastructure – so that his statement is largely factually correct – I argue that the reality to which his 2012 blurt refers does not support the “Progressive” political conclusions that he draws from that reality.  Here’s a chunk from my column: Fact is, a great deal of infrastructure is built privately. FedEx, for example, is infrastructure: It’s a combination of vehicles, warehouses, organizational knowledge and other specific capital that businesses and households rely...more

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  • Fabius Maximus

    Worst case scenarios versus fat tails: a discussion about climate change

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  • Paper Economy - A US Real Estate Bubble Blog

    Existing Home Sales Report: March 2014

    Today, the National Association of Realtors (NAR) released their Existing Home Sales Report for March showing weak sales with total home sales falling 0.2% since February dropping 7.5% below the level seen in March 2013. Single family home sales also remained weak with sales staying flat from February and falling a notable 7.3% below the level seen in March 2013 while the median selling price increased 7.4% above the level seen a year earlier. Inventory of single family homes increased from February to 1.74 million units and climbed 5.5% above the level seen in March 2013 which, along with the sales pace, resulted in a monthly supply of 6.1 months. The following charts (click for full-screen dynamic version) shows national existing single family home sales, median ...more

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  • Dani Rodrik's weblog

    Globalization and premature deindustrialization

    Arvind Subramanian has a nice post, which provides additional evidence on the phenomenon of premature industrialization that I have talked about and documented previously.  Arvind works with data on industry rather than manufacturing per se, which I prefer. But the result is similar. The inverse U-shaped relationship between income levels and industrialization has shifted down and to the left in recent decades, so that countries are maxing out on industrialization at lower levels of income and, moreover, the peaks themselves are lower than before. Here I propose a simple explanation for this phenomenon, having to do with global market integration. When poor countries become part of the global market, their industrialization is determined largely by consumption pat...more

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  • The Baseline Scenario

    Where Do You Want to Be Born?

    A

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  • Econbrowser

    “Financial Adjustment in the Aftermath of the Global Crisis 2008-09: A New Global Order?”

    That’s the title of a conference that took place at USC this weekend, co-organized by Joshua Aizenman, Menzie Chinn and Robert Dekle, and cosponsored by the USC Center for International Studies, USC School of International Relations, Journal of International Money and Finance, and the Federal Reserve Bank of San Francisco. The papers focused on new international trends and developments in the wake of the global financial crisis, including the role of corporate saving/investment/net lending (figure 7), and official flows, in the global saving glut, the behavior of cross-border banking, the size of fiscal multipliers, fiscal rules and business cycle volatility, the implications of foreign exchange reserve accumulation, monetary aspects of Abenomics, and the competi...more

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  • Paul Krugman

    Class-Ridden America

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  • Paul Krugman

    Inequality 1992

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is specially selected for this Earth Day; it’s from pages 104-105 of Pierre Desrochers’s and Hiroko Shimizu’s splendid 2012 book, The Locovore’s Dilemma: In Praise of the 10,000-Mile Diet (original emphasis; footnotes excluded; links added): [T]hriving cities are not an environmental problem, but rather the best means to lighten humanity’s impact on nature.  To quote the applied scientists and policy analysts Peter W. Huber and Mark P. Mills, the skyscraper is “America’s great green gift to the planet” for it “packs more people onto less land, which leaves more wilderness undisturbed in other places, where the people aren’t …. The less real estate we occupy for economic gain,” they add, &#...more

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  • The Capital Spectator

    Is US Inflation Headed Higher?

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  • The Housing Bubble Blog

    The Reality Behind Bikini-Clad Models

    The South China Morning Post reports on Hong Kong. “Home sales in the secondary market registered strong growth during the Easter holiday as more owners joined the price-cutting strategy employed by developers to spark buying interest. ‘It was driven by more owners willing to offer discounts after developers’ aggressive market launches at competitive prices to entice buyers,’ said Sammy Po Siu-ming, chief executive of the residential department at Midland.” “The agency said a three-bedroom, 702-square-foot unit at Yuan Kung Mansion in Taikoo Shing changed hands for HK$8.75 million, below the asking price of HK$8.9 million.” The International Business Times on China. “Every month, the agents at a small real estate office in...more

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  • Econbrowser

    State Employment Trends: Does a Low Tax/Right-to-Work/Low Minimum Wage Regime Correlate to Growth?

    It’s interesting how “pro-business” policies do not appear to be conducive to rapid employment growth. Employment in Governor Walker’s Wisconsin, as in Governor Brownback’s Kansas, has lagged behind that of the United States (and behind that of Governor Dayton’s Minnesota and Governor Brown’s California). Figure 1: Log nonfarm payroll employment in Minnesota (blue), Wisconsin (red), Kansas (green), California (teal),and the United States (black), seasonally adjusted, 2011M01=0. Source: BLS, and author’s calculations. Notice that Kansas and Wisconsin, ranked 15th and 17th in terms of the ALEC-Laffer “Economic Outlook Rankings”, are doing equally badly relative to US employment growth. In contrast, Minnesota (...more

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  • Macro and Other Market Musings

    Bernanke vs. Friedman: Financial Intermediation Shock or Medium of Exchange Shock?

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  • Fabius Maximus

    A guide into the weird numbers that run our world, describing both financial bubbles & climate change

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  • Robert Reich

    Raising Taxes on Corporations that Pay Their CEOs Royally and Treat Their Workers Like Serfs

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  • Paul Krugman

    ECO 348, The Great Recession: Long-Run Fiscal Prospects

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  • The Capital Spectator

    Ranking ETFs On Momentum

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  • Fabius Maximus

    The Ukraine anti-semitic flyer: a case study in propaganda

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  • Greg Mankiw's Blog

    Transitory Income and the One Percent

    From today's NY Times:Thomas A. Hirschl of Cornell and I [Mark Rank of Wash U] looked at 44 years of longitudinal data regarding individuals from ages 25 to 60 to see what percentage of the American population would experience these different levels of affluence during their lives. The results were striking. It turns out that 12 percent of the population will find themselves in the top 1 percent of the income distribution for at least one year. What’s more, 39 percent of Americans will spend a year in the top 5 percent of the income distribution, 56 percent will find themselves in the top 10 percent, and a whopping 73 percent will spend a year in the top 20 percent of the income distribution.... It is clear that the image of a static 1 and 99 perc...more

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  • Dr. Housing Bubble Blog

    A mortuary of 7,000,000 foreclosures and counting: Nation still faces 9.1 million properties that are seriously underwater.

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  • Macro and Other Market Musings

    This One Figure Shows Why Fed Policy Failed

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  • macroblog

    Using State-Level Data to Estimate How Labor Market Slack Affects Wages

    At a recent speech in Miami, Atlanta Fed President Dennis Lockhart had this to say: Wage growth by most measures has been very low. I take this as a signal of labor market weakness, and in turn a signal of a lack of significant upward unit cost pressure on inflation. This macroblog post examines whether the data support this assertion (answer: yes) and whether wage inflation is more sensitive to some measures of labor underutilization than other measures (answer: apparently, yes). San Francisco Fed President John Williams touched on the latter topic in a recent speech (emphasis mine): We generally look at the overall unemployment rate as a good yardstick of labor market slack and inflation pressures. However, its usefulness may be compromised today by the extrao...more

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  • Robert Reich

    Antitrust in the New Gilded Age

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  • Dr. Housing Bubble Blog

    Mirror, mirror on the wall, tell me what two counties are the bubbliest of them all. Orange County and Los Angeles County. Southland homes sales reach 6 year low while median price hits 6 year high.

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  • Greg Mankiw's Blog

    Sometimes it's better to split the baby

    This story about the Census Bureau is amazing to me: The Census is changing its annual survey about health insurance.  As a result, the new data will not be comparable to the old, making it much harder to gauge the effects of the Affordable Care Act.Is this a White House conspiracy to hide the effects of the law, as some have suggested?  Maybe, but probably not. I have a lot of respect for the government data producers, so I am giving them the benefit of the doubt.Yet I don't see why the Bureau needs to make such a sudden change.  Why not, for a few years, give half the sample the old questionnaire and half the new one?  This procedure would provide a basis for eventually splicing together the old and new time series....more

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  • The Baseline Scenario

    Rumsfeldian Journalism

    A

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  • The Baseline Scenario

    Defending Kickbacks

    A

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  • Robert Reich

    HAPPY TAX DAY, AND WHY THE TOP 1% PAY A MUCH LOWER TAX RATE THAN...

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  • Piggington's Econo-Almanac

    March 2014 Housing Data Rodeo

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  • macroblog

    Reasons for the Decline in Prime-Age Labor Force Participation

    As a follow up to this post on recent trends in labor force participation, we look specifically at the prime-age group of 25- to 54-year-olds. The participation decisions of this age cohort are less affected by the aging population and the longer-term trend toward lower participation of youths because of rising school enrollment rates. In that sense, they give us a cleaner window on responses of participation to changing business cycle conditions. The labor force participation rate of the prime-age group fell from 83 percent just before the Great Recession to 81 percent in 2013. The participation rate of prime-age males has been trending down since the 1960s. The participation rate of women, which had been rising for most of the post-World War II period, appears to hav...more

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  • Tim Duy's Fed Watch

    When Will The Fed Change Its Reaction Function?

    The March FOMC minutes were generally interpretted as having a dovish tenor, contrasting with the generally hawkish reception for the statement and ensuing press conference.  Overall, the Fed appears committed to a long period of low interest rates and I continue to think this should be the baseline view.  But actually policy seems to remain hawkish relative to the Fed's rhetoric. By its own admission, the Fed is missing badly on both its mandates. Why then the push to reduce accommodation by ending asset purchases and laying the groundwork for the first rate hike? This leaves me wary the Fed could turn dramatically more hawkish with little provocation from the data.  At the same time, one can imagine the Fed realizes that the current reaction function remains inc...more

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  • macroblog

    A Closer Look at Post-2007 Labor Force Participation Trends

    Introduction The rate of labor force participation (the share of the civilian noninstitutionalized population aged 16 and older in the labor force) has declined significantly since 2007. To what extent were the Great Recession and tepid recovery responsible? In this post and one that will follow, we offer a series of charts using data from the Current Population Survey to explore some of the possible reasons behind the 2007–13 drop in participation. This first post describes the impact of the changing-age composition of the population and changes in labor force participation within specific age cohorts—see Calculated Risk posts here and here for a related treatment, and also this recent BLS study. The next post will look at the issue of potential cyclical impacts o...more

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  • Macro and Other Market Musings

    Financial Stability Concerns Are Overblown

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  • Tim Duy's Fed Watch

    One For the Doves

    The March employment report came in pretty much in line with expectations.  Nonfarm payrolls gained by 192k, and January and February were both revised higher.  If you can discern any meaningful change in the underlying pace of economic activity from the nonfarm payrolls numbers, you have sharper eyes than me: You could almost draw that twelve month trend with a ruler.  The unemployment rate moved sideways: In the past, sharp declines in the unemployment rate have been followed by periods of relative stability.  I suspect we are currently in one such period.   The internals of the household report were generally positive.  The labor force rose by 503k, pushing the participation rate up by 0.2 percentage points.  And the labor market appeared to absorb those ne...more

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  • Tim Duy's Fed Watch

    Employment Report Ahead

    Sorry for the light blogging this week - just getting back into the swings of things during the first week of spring term.  But nothing like an employment report to pull me out of hibernation. It is no secret that the employment report has a significant impact on monetary policy.  And we need to make increasingly deeper dives at the data to discern the implications for policy.  Federal Reserve Chair Janet Yellen made that clear in her speech this week when she outlined a number of indicators - part-time but want full-time, wages,long-term unemployment, and labor force participation - as evidence of slack in the labor market.  Such slack is sufficient, in her view, to justify maintaining accommodative policy for a considerable period (although note that accommodativ...more

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  • Dani Rodrik's weblog

    Higher food prices are good for the poor ... in the long run

    Guest post by Derek Headey A few years ago Dani very kindly let me guestblog on some of my work on the global food crisis (see here and also Dani’s much earlier comments here). In that earlier work I used Gallup World Poll data on subjective food security to conclude that the 2007-08 global food “crisis” seemingly had no adverse impact on the world’s poor. As The Economist noted (here), my results were subsequently corroborated by World Bank estimates, which suggested that global poverty continued to fall through the 2007-08 food crisis. In my most recent paper, however, I find an even stronger result: higher domestic food prices predict reductions in poverty (see here). The methods in this paper are fairly simple. I take World Bank national poverty estimates fo...more

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  • Rick Bookstaber

    Big Data versus the SAT

    In a recent Time Magazine article, the president of Bard College, Leon Botstein, joined a chorus of criticism of the SAT, going so far as to call it “part hoax and part fraud.”  Criticism is coming fast and furious because the SAT has just unveiled a new, improved product to try to fend off a trend among competitive colleges to downplay the role of the SAT, and even to eliminate its use entirely.  (The not-for-profit status of the College Board, which produces the SAT, does not put the company beyond reacting to a profit motive; not-for-profit does not exactly mean you don’t get benefits from pulling in more revenue). Among the critiques are that performance during one afternoon in the junior year of high school should not govern a student’s future (th...more

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  • Piggington's Econo-Almanac

    February 2014 Housing Data Rodeo

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  • The Becker-Posner Blog

    Sabbatical Notice

    Starting this weekend, we will be taking a one-month sabbatical from blogging. We will resume at the end of that period.

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  • Piggington's Econo-Almanac

    Case-Shiller Index: Cheaper Homes Still Rebounding Fastest

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  • The Becker-Posner Blog

    The Embargo of Cuba: Time to Go- Becker

    The US embargo of Cuba began in 1960, a year after Fidel Castro turned this island toward communism. It was extended to food and medicines in 1962, the same year as the showdown with Russia over the installation of missiles there. The embargo has prevented American companies from doing business with Cuba, and discouraged tourism to Cuba. The American government also tried with quite limited success to prevent other countries from trading with Cuba. In general economic embargoes are undesirable because they interfere with free trade among countries. Yet a case could be made for an embargo against Cuba. Castro not only allowed Russian missiles to be installed in Cuba, just 90 miles from Florida, but was also actively trying to interfere in other countries by sending troop...more

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  • The Becker-Posner Blog

    End the Cuban Embargo—Posner

    I agree with Becker that we should end the embargo. It was first imposed in 1960, two years after Castro took power, and strengthened after the Cuban missile crisis in 1962, and thereafter modified from time to time—and recently somewhat relaxed, so that today in fact we have several billions of dollars in trade with Cuba each year.  Communist Cuba in Castro’s heyday, before the collapse of the Soviet Union followed by the rapid collapse of communism in all countries except North Korea—and Cuba—was, even apart from the missile crisis, an active although not dangerous enemy of the United States, supporting and fomenting communist subversion against a variety of nations some of them allies of the United States. But the embargo was never much more than an annoyanc...more

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  • Stan Collender's Capital Gains and Games

    Capital Gains And Games Now Being Published By Forbes

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  • Stan Collender's Capital Gains and Games

    Big Changes Are Coming To Capital Gains And Games

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  • Stan Collender's Capital Gains and Games

    Camp Plan Puts Nail In Tax Reform Coffin For This Year, And Next, And...

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  • Dani Rodrik's weblog

    If the rest of the world really want to help Turkey

    Here is the one paragraph version of what is happening in Turkey. During the last decade in which he has been in power, Erdogan has allowed the Gulen movement to take control over the police, judiciary, and large parts of the state apparatus. The Gulen movement in turn established a republic of dirty tricks, with illegal wiretaps and video recordings, fabricated evidence, framing of innocent people, slander and disinformation as its modus operandi.  The monster Erdogan created eventually turned against him as the common enemy, the military and the rest of the secular establishment, were vanquished. He is now trying to slay the monster. That means purges, bringing the judiciary under his control, tightening the screws on the Internet and social media, and greatly e...more

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  • Richard's Real Estate and Urban Economics Blog

    Hannah Harris Green in The Guardian on Race, Crime and Television

    She writes:The First 48 is an A&E true crime reality show that documents real police investigations for the first 48 hours after a homicide report, including what happens inside interrogation rooms. If this sounds dangerous and ethically questionable, that's because it is. Police accidentally killed a child as A&E's cameras rolled, and a legally innocent man came to beknown as a murderer after of his appearance on the show. Catastrophes like these have led to lawsuits, and now many cities refuse to work with The First 48.......This portrayal is not representative of American crime statistics. Although homicide arrests are disproportionately high among African Americans, about the same total number of white people are arrested i...more

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  • democracyarsenal.org

    Can the F-35 Replace the A-10?

    by Nickolai Sukharev  One of the big decisions the United States Air Force has considered over the last few months is whether to retire the A-10 Thunderbolt II fleet as a cost saving measure while developing and procuring the F-35A Lightening II. Given the Budget Control Act caps on Pentagon spending and the need to better allocate funds, officials have expressed their preference to prioritize multi-mission platforms in the inventory. But the problem is that the F-35A is not a replacement for the A-10’s close air support. The reason is simple: it lacks comparable capabilities despite a higher operating cost. Given the constrained budgetary environment, the comparative cost to maintain and operate the two aircraft should be a decisive consideration. The A-10 is a...more

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  • Rick Bookstaber

    Live to Eat, Eat to Live

    In a recent New York Times opinion piece, Paul Krugman assessed the possibility that the economy is in a new, constant state of mild depression, and suggests several reasons why this might be occurring, including slowing population growth and a persistent trade deficit. To this I would like to suggest another one, which has been a topic of some of my previous posts: We simply demand less in terms of the consumption of produced, brick and mortar types of goods because that is not where we are spending our lives. Granted, we need a place to live, food to eat, a car to get around, but now we are not living to eat, we are eating to live; we are living to do things that do not require a huge industrial machine. (I won't even get into the point that insofar as we require the...more

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  • Richard's Real Estate and Urban Economics Blog

    UW-La Crosse Chancellor Joe Gow has issues with sifting and winnowing.

    A geography professor at the University of Wisconsin-La Crosse, Rachel Slocum, made the mildly controversial point in an email to her students that Republicans in the House of Representatives had brought about the partial closure of the US government, and had therefore brought about the closure of the US Census web site.  This closure prevented her students from completing their assignments.  She never used abusive or offensive language.Her point raised howls among the conservative blogasphere and media; when confronted with this, her boss, UW-La Crosse Chancellor Joe Gow, publicly reprimanded her for expressing a factually based opinion to her class.  In my view, it was his job to back her--not to agree with her opinion, but rather to defend he...more

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  • democracyarsenal.org

    After Geneva Talks A Consensus on Moving Forward

    By Homa Hassan The two-day round of P5+1 negotiations with Iran just concluded in Geneva and Western diplomats are carefully reviewing a detailed proposal presented by Iran. As this proposal is being reviewed ahead of the follow-on meetings in November it is important to look at what the realistic prospects of a deal will look like. Going into this week’s talks, a number of commentaries came out attempting to set negotiations up for failure. However, it is widely agreed that a negotiated solution to Iran’s controversial nuclear program is the best way to achieve a sustainable solution and a recent survey of reports and recommendations from bipartisan think tanks and high-level experts demonstrates a broad consensus on how to approach negotiations a...more

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  • democracyarsenal.org

    TPP, TTIP and Getting America's Competitiveness Back on Track

    By Marcela Heywood Last week’s Asia-Pacific Economic Cooperation summit in Bali, Indonesia marked further progress for the Trans-Pacific Partnership (TPP) and set an ambitious goal to finish negotiations by the end of the year. Although the U.S. government shutdown – and President Obama’s absence in Bali – did not hinder the trade talks, it did call America’s credibility into question. Government shutdown could threaten both TPP and Transatlantic Trade and Investment Partnership (TTIP) negotiations by displaying uncertainty in U.S. economic and foreign policy priorities. Congress needs to reach an agreement and prioritize TPP and TTIP, as they are necessary policy initiatives to boost American competitiveness, stimulate the economy, and exert soft power to cr...more

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  • Richard's Real Estate and Urban Economics Blog

    The Windy City and The Foggy City

    Hannah Green writes:ERNEST HEMINGWAY famously wrote of Paris, “If you are lucky enough to have lived in Paris as a young man, then wherever you go for the rest of your life, it stays with you, for Paris is a moveable feast." For half a century, Hemingway’s nostalgic vision of the city of lights has made undiscovered literary geniuses wish that they could be unemployed in Paris in the 1920s instead of unemployed wherever they live, now. Last year, Teju Cole’s debut novel, Open City, offered a different kind of literary city. The main character, Julius, who resembles Cole, wanders the streets of New York, conversing with the city’s residents and falling into reveries about music, history, and literature. Most of the people he speaks with are immigrants, ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-09

    Given that I block NSA & PRISM tweets, was entertaining tuning into twitter & trying to figure why everyone was on about Lord Snowdon -> Turned on GoT tonight just in time to catch Daenerys reenacting her Level 2 YMCA gymnastics pageant. -> How Not to Be Alone | Jonathan Safran Foer – http://t.co/HMFxg75lfh http://t.co/DzAtvWBQJr -> Excellent, but fellow sports-med geeks only: Sports and exercise-related tendinopathies: a review – http://t.co/WGkhRlO6Uz -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-07

    Photo-set: Flooding Across Central Europe – http://t.co/8G6j8teCbd -> CDC Update: Severe Respiratory Illness Associated with Middle East Respiratory Syndrome Coronavirus – http://t.co/hWqN1338VN -> Col Flagg: Have you ever heard of Malaysian Chest Implosion Torture? Radar: No. Coll Flagg: Good. It hasn’t been invented… yet. -> tl;dr: There are Manchurian Candidate engineers at large tech cos that have stolen SSL root cert and NSA is using it for cattle mutilation. -> Brian: …Will you please listen? I'm not the Messiah! Do you understand? Honestly Woman: Only the true Messiah denies his divinity! -> ...more

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  • Paul Kedrosky's Infectious Greed

    Twitter Digest: 2013-06-05

    FRED: Free Energy Data – http://t.co/90H7GVDazO -> Solipsisms ‘r’ us, courtesy of my friends at @thinkup: I apparently mention me a lot – http://t.co/9rTRXvBM9D -> Almost 10,000 words on soccer/Italy/economics/racism by @wrightthompson? Yes, & it’s super. Go. http://t.co/g4sgEFLkIC -> When The Beautiful Game Turns Ugly: A journey into the world of Italy's racist soccer thugs http://t.co/nckrbeLPfs -> Can’t remember last time I read an OpEd or column. Do those still exist? -> ...more

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  • The Street Light

    Cyprus and Eurozone Bank Deposits

    To me, the central issue raised by this week's Cyprus debacle is how it has affected confidence across the eurozone.  To what degree has the possibility of insured depositors at a eurozone bank losing a portion of their deposits affected the mindset of depositors?  To what degree has ECB acquiescence to this possibility undermined the notion that deposit insurance in the eurozone means the same thing in all countries?  And to what degree has the ECB's direct threat to end support for Cyprus's banking system in the event that the government of Cyprus can not arrange sufficient funds to meet its conditions made a farce of its earlier promise to "do whatever it takes to preserve the euro"?These, to me, are the interesting questions prompted by this week's ev...more

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  • Rick Bookstaber

    The Product is the Promise: Finance and Social Values

    In the first paragraph of my book A Demon of Our Own Design(Wiley, 2007) I observe that “You don't deliberately obliterate hundreds of billions of dollars of investor money. And that is at the heart of this book – it is going to happen again. The financial markets that we have constructed are now so complex, and the speed of transactions so fast, that apparently isolated actions and even minor events can have catastrophic consequences.” I then spend a significant portion of the book explaining the mechanics that lead the financial markets to lurch from crisis to crisis; why is it that while engineering in other fields increases safety, financial engineering seems to make things get worse. I suggest that the problem stems from the complexity and tight coupling that...more

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  • The Street Light

    When the Fed Chair is an Academic

    The big economic news of the week was, in fact, big economic news: the Fed's announcement of significant changes from past practice in the the quantity of its next round of large scale asset purchases ("unlimited"), and in the timing of any future reversal of this expansionary policy ("a considerable time after the economic recovery strengthens").I view this as a pretty fundamental shift in how the Fed hopes to affect the economy.  Rather than trying to push economic activity one way or the other through its management of interest rates (which can alter economic activity through its portfolio-rebalancing and wealth effects, for example), the Fed is now quite explicitly trying to affect economic activity by altering interest rate and inflation expectations.  As...more

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  • The Street Light

    Government Job Destruction

    Another jobs report in the US, another month where part of the private sector's job creation was undone by continued job destruction by the government sector. The 15,000 additional jobs lost in April brings total job losses in the government sector since January 2010 to over 500,000. While the US has not quite been experiencing European-style austerity over the past two years, that's still a pretty tough headwind to fight as it emerges from recession. ...more

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  • TPMCafe

    Message to world government: Don't govern the Internet

    You could think of the Aspen IDEA report published today as a letter to the head of the International Telecommunications Union, Hamadoun Touré, suggesting that he should reconsider his intent to put the "light touch" of government on the Internet's operations. M. Touré will be running a major meeting of world governments in Dubai at the end of this year. The Dubai meeting, known as WCIT 12, may have an agenda that is a light touch only if that's what you can call a grab for the jugular vein of the Internet. The issues may include a "per click" tax on international Internet traffic, individual nation state regulation identities to online activity, national encryption standards to allow government surveillance, and multinational governance of the Internet. Russia, Chi...more

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  • TPMCafe

    Obama and Romney on Foreign Policy - Drawing the Contrasts

    The political battle lines are being drawn for the general election debate over foreign policy and national security, and you can't do much better than my fellow Democracy Arsenal blogger Michael Cohen for a guide. One key theme of Michael's latest column for ForeignPolicy.com is what a difference it makes for a candidate to bear the responsibility of governing, or on the other hand, campaign to be commander in chief on the basis of self-serving pot shots. My only quibble regards how Romney's reed-thin foreign policy argument will fare with voters. Take Michael's analysis of Romney's potential advantage in the debate on Iran: He can simply lob rhetorical haymakers that hype up the threat of an Iranian bomb or offer Churchillian declarations about his intention to stop...more

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  • TPMCafe

    Will Yale's Alumni Save Liberal Education?

    Hoping to head off alumni resistance to the brand-new "Yale-National University of Singapore" college that the Yale Corporation has created somewhat stealthily in collaboration with the government of that authoritarian city-state, Association of Yale Alumni chairman Michael Madison has inadvertently demonstrated one of the ways Yale College is being transformed from a crucible of civic-republican leadership, grounded in liberal education, into a global career-networking center and cultural galleria for a new elite that answers to no polity or moral code: STATEMENT OF THE OFFICERS OF THE AYA BOARD OF GOVERNORS, Michael Madison, Chair of the Board "All Yale-NUS College graduates will be warmly welcomed as a part of the Yale alumni community. They will also be invited...more

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Dan Steinbock

Dr Dan Steinbock is a recognized expert of the multipolar world. He focuses on international business, international relations, investment and risk among the major advanced economies (G7) and large emerging economies (BRICS and beyond). In addition to his advisory activities (www.differencegroup.net), he is affiliated with major US universities as well as international think-tanks, such as India China and America Institute (USA), Shanghai Institutes for International Studies (China) and EU Center (Singapore).

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