EconoMonitor

Economics Blog Aggregator

    United States

  • The Big Picture

    Eurozone’s Economic Woes Deepen

    Source: WSJ

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  • naked capitalism

    Links 10/21/14

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  • The Housing Bubble Blog

    Until Buyers Like The Price, It’s Going To Sit

    The Palm Beach Daily News reports from Florida. “The number of demolition permits and new-home building permits issued by the town has soared over the past couple of years and most of those are for projects on the North End. The frenzy has left many would-be home buyers and spec developers struggling to find suitable properties. ‘I note that (tear-down houses in) the current spec inventory — few that there are — are priced at or above $1,200 per square foot. Some of the new ones already announced by other brokers are well above $ 1,300 per square foot,’ said the Corcoran Group’s Bill Yahn. ‘To reward the developer for his effort and risk, a finished home on a $3 million site would likely be priced approaching $7 million. New homes price...more

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  • The Capital Spectator

    Initial Guidance | 21 October 2014

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  • The Big Picture

    Tight Credit Conditions Continue to Constrain the Housing Recovery

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  • naked capitalism

    Goldman Makes It Official That the Stock Market is Manipulated, Buybacks Drive Valuations

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  • naked capitalism

    New Zealand’s GT Group in Romania, Moldova and the UK

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  • The Housing Bubble Blog

    Bits Bucket for October 21, 2014

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

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  • Economist's View

    Links for 10-21-14

    Will Americans ever vote for a far-reaching wealth tax? - Roger Farmer How big should central bank balance sheets be? - Cecchetti & Schoenholtz Enhancing Financial Stability by Improving Culture - William Dudley John Cochrane's "Monetary Policy with Interest on Reserves" - Nick Rowe The Importance of Timely Settlement of Tri-Party Repo - Liberty Street What Can Universities Do About Climate Change? - Robert Stavins Navigating toward Normal: The Future for Policy - John Williams A Model of Secular Stagnation - Eggertsson and Mehrotra Paul Dirac: The Quiet Genius Died 30 Years Ago - Lindau Blog The federal government should not cut taxes - Frances Woolley Social mobility in a dystopia - Stumbling and Mumbling Is Mortgage Credit too Tight? - Calculated R...more

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  • Fabius Maximus

    We awake from fears of an Ebola pandemic in America. Now let’s ask who’s responsible…

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  • Marginal REVOLUTION

    Does the Egertsson and Mehrotra model of secular stagnation work?

    Their new paper is here, ungated here (pdf), here is the key passage: We have shown that in the model with capital, the presence of productive assets carrying a positive marginal product does not eliminate the possibility of a secular stagnation. The key assumption is that capital has a strictly positive rate of depreciation. In the absence of depreciation, capital can serve as a perfect storage technology which places a zero bound on the real interest rate. It is straightforward to introduce other type of assets, such as land used for production, and maintain a secular stagnation equilibrium. For these extensions, however, it is important to ensure that the asset cannot operate as a perfect storage technology as this may put a zero bound on the real interest rate. Let ...more

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  • All HW content

    Empower today's consumers with mobile apps

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  • Econbrowser

    Competitiveness, Exchange Rates, Spillovers, the End of Original Sin, and More

    Those are the topics covered in the West Coast Workshop on International Finance and Open Economy Macroeconomics, held October 17, 2014, and co-organized by Helen Popper (University of Santa Clara) and Michael Hutchison (UC Santa Cruz). The agenda is here (co-sponsored by USC, UCSC, Federal Reserve Bank of San Francisco). The workshop includes papers on that look at stability and international linkages from many angles. The morning sessions include work — such Aizenman, Chinn, and Ito, and Miyamoto and Nguyen — that examine the impact conditions in the major economies have on other economies; and it includes an examination (Vincenzo Quadrini) of the effects of emerging economies on rich ones. It also includes Bergin and Corsetti’s work on the impact...more

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  • Cafe Hayek - Article Feed

    Some Links

    (Don Boudreaux) From the Wall Street Journal is this account of the Cato Institute’s important new Center for Monetary and Financial Alternatives, headed by my close friend George Selgin (and with the assistance of my colleague Larry White).  A slice: Criticism of the Fed, Mr. Selgin acknowledged, has come not just from serious economists but also conspiracy theorists with outlandish and often-distasteful ideas. “One of my goals, as the director of the center, is to be in charge of damage control. That consists of making sure our work isn’t tainted by this kind of amateur stuff,” Mr. Selgin said. “We need to keep ourselves pure in terms of our writing being as scholarly as it can be. If we do that, we can make a strong case against holding the Federal Re...more

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  • Calculated Risk

    Tuesday: Existing Home Sales

    From Dina ElBoghdady at the WaPo: How a top housing regulator plans to make it easier to get a mortgage. Excerpts: It’s unclear if Watt's downpayment plan will do much to ease access to credit. The average downpayment remains lower today than it was in more normal, pre-housing bubble times, said Sam Khater, chief deputy economist at CoreLogic. That’s because the Federal Housing Administration – which backs loans with as little as 5 percent down -- has a larger share of the mortgage market than usual, Khater said. Having Fannie and Freddie also accept downpayments as low as 5 percent would only help on the fringes, Khater said....Today, the average credit score on a loan backed by Fannie and Freddie is close to 745, versus about 710 in the early 2000s, according to...more

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  • Robert Reich

    Getting a Grip on Ebola

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  • ProfessorBainbridge.com

    "Corporate Law after Hobby Lobby"

    Lyman Johnson and David Millon have just posted a very interesting paper on Corporate Law after Hobby Lobby, THE BUSINESS LAWYER, Vol 70 - November 2014, available at SSRN:... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • All HW content

    Allstate Appraisal and Bradford Technologies launch valuation tool

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  • All HW content

    IMA selling $46.1 million whole loan and REO portfolio

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  • ProfessorBainbridge.com

    Todd Henderson and I apparently are big in Taiwan

    Todd posted that: Here's what apperars to be the relevant passage: [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

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  • ProfessorBainbridge.com

    I'm puzzled by the Delaware Chancery Court decision in In re KKR Financial Holdings LLC Shareholder Litigation

    A friend recently emailed, raising a question about the new Delaware Chancery Court decision in In re KKR Financial Holdings LLC Shareholder Litigation, --- A.3d ----, 2014 WL 5151285 (Del.Ch.2014).... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ...more

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  • Brad DeLong's Grasping Reality...

    Medicaid: Two Years Late, John Kasich Gets Religion: Live from teh Roasterie

    Jason Hart: Gov. Kasich: God Wants Ohio to Expand Medicaid: "Governor John Kasich, a Republican, repeated his insistence that God wants Ohio to expand Medicaid... ...when reporters brought up the topic on June 18. Kasich suggested anyone who opposes Medicaid expansion will have to answer for their opposition when they die. Gov. Kasich said he recently told a state legislator: I respect the fact that you believe in small government. I do too. I also happen to know that you’re a person of faith. Now, when you die and get to the, get to the, uh, to the meeting with St. Peter, he’s probably not gonna ask you much about what you did about keeping government small, but he’s going to ask you what you did for the poor. Better have a good answer.... Ka...more

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  • The Big Picture

    10 Monday PM Reads

    My afternoon train reads: • Why do stock markets crash? (MacroFugue) see also U.S. Stocks: Tenacious or Teetering? (MoneyBeat) • Valuing Japanese shares – part one (FT) • Behind Private Equity’s Curtain (NY Times) • Lessons From Dorsey Wright’s Thomas Dorsey (A Wealth of Common Sense) • From Apple to Wal-Mart, Companies Make Bets on Climate Change (Bloomberg) see also Giant Battery Unit Aims at Wind Storage Holy Grail (Bloomberg) • How to Ruin Your Financial Life (Motley Fool) • The Inequality Trifecta (Project Syndicate) • Is sex only for rich people? (Washington Post) • Louis C.K. Has Thoughts About the Origins of Life on Earth, Is Definitely “Not High” (Slate) • Inside the company that rebuilt Digg (Vox) What are you reading? &n...more

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  • Econbrowser

    Wisconsin Employment: 108.6K below Trend Required to Hit Walker’s 250K Target

    The Wisconsin Department of Workforce Development released without fanfare (well, there is no press release I see on the DWD media website as of 3pm CDT today) the last figures to be available before the election. They indicate September private nonfarm employment 108.6 thousands below the trend consistent with the Governor’s target (recommitted to a mere year ago) of 250 thousands net new jobs. Figure 1: Private nonfarm payroll employment seasonally adjusted (red), trend consistent with Walker’s promise (gray), and Wisconsin Economic Outlook forecast, interpolated (green). Source: Wisconsin Department of Workforce Development, Wisconsin Economic Outlook (March 2014), author’s calculations. This tabulation means that Wisconsin must create 32.35 thou...more

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  • Calculated Risk

    Lawler: Updated Table of Distressed and All-Cash Share for September

    CR Note: Existing Home Sales for September will be released tomorrow by the National Association of Realtors (NAR). The consensus is for sales of 5.09 million on seasonally adjusted annual rate (SAAR) basis. Sales in August were at a 5.05 million SAAR. Economist Tom Lawler estimates the NAR will report sales of 5.14 million SAAR.Housing economist Tom Lawler sent me the updated table below of short sales, foreclosures and cash buyers for several selected cities in September.  Lawler notes: "Note the jump in the foreclosure sales share in Orlando."On distressed: Total "distressed" share is down in these markets due to a decline in short sales. Short sales are down in all these areas.Foreclosures are up slightly in several of these areas - and up significantly in Or...more

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  • Marginal REVOLUTION

    Alan Krueger has a new economics blog for teachers

    Explorationsineconomics.com. Here you can watch a video about Alan Krueger not being able to get a mortgage on a second home.

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  • Calculated Risk

    FHFA Director Watt: Reps and Warrants to be Clarified in Coming Weeks, "sensible and responsible guidelines" for Lower Downpayments

    From FHFA Director Melvin Watt: Prepared Remarks of Melvin L. Watt, Director, FHFA, At the Mortgage Bankers Association Annual ConventionOn lower downpayments: To increase access for creditworthy but lower-wealth borrowers, FHFA is also working with the Enterprises to develop sensible and responsible guidelines for mortgages with loan-to-value ratios between 95 and 97 percent. Through these revised guidelines, we believe that the Enterprises will be able to responsibly serve a targeted segment of creditworthy borrowers with lower-down payment mortgages by taking into account “compensating factors.” While this is a much more narrow effort than our work on the Representation and Warranty Framework, it is yet another much needed piece to the broader access to credit ...more

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  • Brad DeLong's Grasping Reality...

    Noted for Your Afternoon Procrastination for October 20, 2014

    Over at Equitable Growth--The Equitablog On the Proper Inflation Target: Monday Focus for October 20, 2014 - Washington Center for Equitable Growth Emmanuel Saez & Gabriel Zucman: Exploding wealth inequality in the United States - Washington Center for Equitable Growth Nick Bunker: Thomas Piketty, depreciation and the elasticity of substitution - Washington Center for Equitable Growth Morning Must-Read: Pascal Michaillat and Emmanuel Saez: Unemployment, and Product and Labour-Market Tightness - Washington Center for Equitable Growth : Morning Must-Read: Daniel Davies: European Banking Stress Tests-Pour Encourager les Autres? - Washington Center for Equitable Growth Morning Must-Read: Paul Kasriel: The Monetary Base and the Money Multiplier: U.S. and Eurozone - ...more

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  • Marginal REVOLUTION

    What is the welfare cost of Amazon supply restrictions on books?

    Maybe that welfare cost is not very high at all.   After all, if Amazon does not carry a book you can sign up at the Barnes & Noble website and that takes a few minutes at most. There is a tension in most criticisms of Amazon.  On one hand, the critic wishes to argue that a “not carry” decision by Amazon has a big impact on how a book does.  On the other hand, the critic wishes to argue that the loss of access to particular titles is a big deal.  You cannot easily have it both ways.  If readers won’t switch to B&N.com, they must not care very much about particular titles, in which case the Amazon refusal to carry (or delay in shipping) is small even relative to the size of the (small) trade in books. Krugman’s column today, which cov...more

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  • macroblog

    What's behind Declining Labor Force Participation? Test Your Hypothesis with Our New Data Tool

    .citation { font-style: italic; } .byline { font-style: italic; } .centeredImage { display: block !important; margin-left: auto !important; margin-right: auto !important; } The share of people (age 16 and over) participating in the labor market—that is, either working or looking for work—declined significantly during the recession. As many researchers have noted (see our list of supplemental reading under "More Information"), there is clearly a cyclical component to the decline. When labor market opportunities dry up, it influences decisions to pursue activities other than work, such as schooling, taking care of family, or retiring. However, much of the decrease in the overall labor force participation rate (LFPR) could be the result of the...more

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  • Economist's View

    ''State 'Income Migration' Claims Are Deeply Flawed''

    Differences in income taxe ratess across states have little impact on migration: State “Income Migration” Claims Are Deeply Flawed, by Michael Mazerov, CBPP: Some proponents of state income tax cuts are making highly inaccurate claims about the impact of interstate migration patterns on states with relatively high income taxes based on a misleading reading of Internal Revenue Service data. Those making these arguments claim that many of the people who leave states with relatively robust income taxes do so largely in order to pay little or no income tax in another state, and that they take their incomes with them when they move, harming the economies of the states they left.  As a consequence, these “income migration” proponents claim, states with relative...more

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  • Brad DeLong's Grasping Reality...

    Over at Equitable Growth: On the Proper Inflation Target: Monday Focus for October 20, 2014

    Over at Equitable Growth: In the 60 years since 1954, the Federal Reserve has been moved to cut the 3-Mo. T-Bill rate when a recession threatens by 2.0%-points or more 13 times--once every 4.6 years. There have been eight cuts of 4.0%-points or more--once every 7.5 years. There have been five cuts of 5.0%-points or more--once every 12 years. To me that suggests that the Greenspan-Bernanke policies--aim for 2.0%/year inflation, with a 300 basis-point "natural" short-term safe real interest rate on top of that when the economy is in the growth-along-the-potential-path phase of the business cycle--were already too restrictive. Once every 12 years is too often to run into ZLB problems, unless you are a strong believer in Coibion and Gorodnichenko arguments that price ine...more

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  • Cafe Hayek - Article Feed

    Quotation of the Day…

    (Don Boudreaux) … is from page 60 of the 1990 Liberty Fund edition of Vera Smith’s superb 1936 volume, The Rationale of Central Banking and the Free Banking Alternative: The public mind entertained exaggerated hopes as to the power of banking.  It was a widespread belief that all that was necessary to relieve a scarcity of capital was an elastic note issue, and the issue of notes was still thought to possess something akin to a magic power of transforming poverty into wealth. Here Smith is speaking of mid-19th-century German states, but the magical thinking she describes is, of course, among the most common fallacies to be found across time and space.  People frequently mistake money for prosperity.  The veil of money is, for such people, a curtain hidin...more

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  • The Housing Bubble Blog

    Confidence In The Property Market Is Collapsing

    The Globe and Mail reports from Canada. “An analysis of local incomes released last week by and urban planner Andrew Yan, showed that 25- to 55-year-olds with BAs in Vancouver make about $41,000 a year, $10,000 a year less than the median for Canada and $20,000 less than in top-paying Ottawa. The spread was even worse for people with master’s degrees– as though employers realize people are so desperate to be in Vancouver that they can pay them less. ‘The relationship between incomes and prices of homes has totally broken down here,’ said Andrew Ramlo, a director at Urban Futures.” “Eesmyal Santos-Brault, a green-building consultant, bought his first condo 10 years ago when he was 28 and working at a non-profit for near minimum wage. He ...more

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  • Economist's View

    Paul Krugman: Amazon’s Monopsony Is Not O.K.

    I've been harping on the lack of concern about market power since I began blogging almost 10 years ago. Nobody much listened or cared -- so this is very welcome: Amazon’s Monopsony Is Not O.K., by Paul Krugman, Commentary, NY Times: Amazon.com, the giant online retailer, has too much power, and it uses that power in ways that hurt America. ... If you haven’t been following the recent Amazon news: Back in May a dispute between Amazon and Hachette, a major publishing house, broke out into open commercial warfare. Amazon had been demanding a larger cut of the price of Hachette books it sells; when Hachette balked, Amazon began delaying their delivery, raising their prices, and/or steering customers to other publishers. You might be tempted to say that this is jus...more

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  • The Capital Spectator

    US Economic Profile | 20 October 2014

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  • The Capital Spectator

    Initial Guidance | 20 October 2014

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  • Fabius Maximus

    DoD shows its strength, mobilizing to protect us from Ebola (a sad story about America).

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  • Beat the Press

    Gretchen Morgenson Warns on Pensions and Private Equity (Guest Post)

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  • Paul Krugman

    This Age of Derp

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  • Beat the Press

    The Post Tells Us the Economy is SO Complicated

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  • Cafe Hayek - Article Feed

    Protectionism’s Essence

    (Don Boudreaux) Here’s a letter to a college student in New Jersey: Dear Mr. Sloan: Thanks for writing. You ask if my support of free trade is “too simplistic.”  Aren’t there “conditional situations and details” that I overlook when I oppose protectionist arguments?  Fair questions.  My answer, though, is that while I agree that reality is unavoidably more complex than are any human accounts of it, the unconditional case against protectionism is as sound as is, say, the unconditional case against armed robbery. Suppose your next-door neighbor grows tomatoes and offers to sell some to you.  You reject his offer and instead buy tomatoes from a seller who lives further down the street.  Your next-door neighbor’s prices might b...more

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  • Econbrowser

    How will Saudi Arabia respond to lower oil prices?

    Oil prices (along with prices of many other commodities) have fallen dramatically since last summer. Some observers are waiting to see if Saudi Arabia responds with significant cutbacks in production. I say, don’t hold your breath. Source: FRED. When oil demand fell in the 1981-82 recession, the Saudis cut production by 6 million barrels a day in an effort to soften the decline in oil prices. They also cut production in response to lower demand in the 2001 recession and the most recent recession. On the other hand, the kingdom boosted production quickly beginning in August 1990 and January 2003 in anticipation of lost production from Iraq in the two Gulf Wars. This historical behavior led many observers to believe that Saudi Arabia would always play the ro...more

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  • Beat the Press

    In Context of Accusations of CIA Drug Smuggling, WaPo Calls $10 Million a Week "Relatively Small"

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  • Greg Mankiw's Blog

    Charles Murray on Ayn Rand

    A great and balanced essay.  Thanks to Alex Tabarrok for the pointer.

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  • Dr. Housing Bubble Blog

    Rental fury: The trend for renting continues to grow stronger. Housing starts jump largely on the back of multi-family housing starts.

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  • Paul Krugman

    Friday Night Music, Saturday Night Followup

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  • Paul Krugman

    Why To Worry About Deflation

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  • Paper Economy - A US Real Estate Bubble Blog

    New Residential Construction Report: September 2014

    Today’s New Residential Construction Report showed mixed results with total permit activity and total start activity improving while single family permit activity declined since August.Single family housing permits, the most leading of indicators, declined 0.5% from August to 624K single family units (SAAR), but increased 1.1% above the level seen in September 2013 and still remained well below levels seen at the peak in September 2005. ...more

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  • Fabius Maximus

    Lessons from Ebola. Let’s hope we learn.

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  • Dr. Housing Bubble Blog

    Home ATM is open for business again: Home equity lines of credit up 21 percent from last year. Up 55 percent in the Los Angeles and Orange County metro areas.

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  • The Baseline Scenario

    No, You Can’t Get a Drink at 5 AM

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  • Rick Bookstaber

    My Recent Work on Agent-based Modeling

    As is obvious by looking at the time span between recent posts, I have not been active in blogging. I am planning to get back into things.  As a start, to help catch up on what I have been doing, here are a couple of papers and a presentation I recently made on the area of my focus, using agent-based modeling to help assess financial vulnerabilities.The model is presented here.For a concise presentation on the model and its application you can look at a talk I did in August at the Newton Institute for Mathematical Sciences at Cambridge University.  (Despite what is suggested by the venue, I did the presentation mathlessly).Related to the model is work I have been doing to develop a map of sorts for the key agents in the financial system and the ways in wh...more

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  • Greg Mankiw's Blog

    Head Section Leader in Ec 10

    Love teaching introductory economics?  Want to live in the Boston area?  Well, then, I have a job for you.

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  • Paper Economy - A US Real Estate Bubble Blog

    Retail Sales: September 2014

    Today, the U.S. Census Bureau released its latest nominal read of retail sales showing mixed results in September with sales dropping 0.3% from August but rising 4.3% on a year-over-year basis on an aggregate of all items including food, fuel and healthcare services. Nominal "discretionary" retail sales including home furnishings, home garden and building materials, consumer electronics and department store sales declined slightly, falling 0.14% from August but rising 2.16% above the level seen in September 2013 while, adjusting for inflation, “real” discretionary retail sales declined 0.38% on the month but rising 0.33% since September 2013. ...more

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  • Dani Rodrik's weblog

    Services, manufacturing, and new growth strategies

    I gave a talk yesterday on New Growth Strategies at the World Bank, which was more or less an elaboration of this short piece. I argued that industrialization had pretty much run out of steam as a growth strategy, that services would need to be the focus going forward, and that this required in turn a different policy mindset about how to increase productivity. In particular, I argued that policies focusing on generating a sequence of sectoral “winners,” which worked so  well in manufacturing (garments to car seats to cars to electronics), would have much smaller payoff in services, in view of the non-tradability of most service segments. I suggested further that, even under the best of circumstances, a services-oriented strategy would yield lower growth than ...more

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  • Paper Economy - A US Real Estate Bubble Blog

    Reading Rates: MBA Application Survey – October 15 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) decreased 9 basis points to 4.08% since last week while the purchase application volume decreased 1% and the refinance application volume ...more

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  • Greg Mankiw's Blog

    Mean Comments

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  • Robert Reich

    Why Government Spends More Per Pupil at Elite Private Universities than at Public Universities

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  • Dr. Housing Bubble Blog

    When the euphoria in flipping slows down: Culver City small home with large price tag. Sales volume continues to slow.

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  • Tim Duy's Fed Watch

    The Methodical Fed

    Just a few months ago the specter of inflation dominated Wall Street. Now the tables have turned and low inflation is again the worry du jour as a deflationary wave propagates from the rest of the world - think Europe, China, oil prices. How quickly sentiment changes. And given how quickly sentiment changes, I am loath to make any predictions on the implications for Fed policy. The very earliest one could even imagine a possible rate hike would be March of next year, still five months away. But since that month is the preference of Fed hawks, better to think that the earliest is the June meeting, still eight months away. Eight months is a long time.  We could pass through two more of these sentiment cycles between now and then.  Or maybe the story breaks decisively o...more

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  • Piggington's Econo-Almanac

    September 2014 Housing Data Rodeo

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  • The Baseline Scenario

    Cultural Capture and the Financial Crisis

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  • Tim Duy's Fed Watch

    The Labor Market Conditions Index: Use With Care

    I was curious to see how the press would report on the Federal Reserve Board's new Labor Market Conditions Index.  My prior was that the reporting should be confusing at best.  My favorite so far is from Reuters, via the WSJ: Fed Chairwoman Janet Yellen has cited the new index as a broader gauge of employment conditions than the unemployment rate, which has fallen faster than expected in recent months. The index’s slowdown over the summer could bolster the argument that the Fed should be patient in watching the economy improve before raising rates. But its pickup last month could strengthen the case that the labor market is tightening fast and officials should consider raising rates sooner than widely expected. Many investors anticipate the Fed will make its ...more

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  • Jeffrey Frankel's Blog

    The Return of Voodoo Economics

    Paul Krugman’s column in the New York Times today talked of the revival of “Voodoo economics” by some Republican politicians.  This refers to the Laffer Proposition that a cut in income tax rates stimulates economic activity so much that tax revenue goes up rather than down.   Gov. Sam Brownback, who is running for re-election in Kansas, has had to confront the reality that tax revenues went down, not up as he argued they would, when he cut state tax rates. I disagree with one thing that Krugman wrote in his column: the idea that there was a long break,  particularly after George W. Bush took office, during which Republican politicians did not push this line.  To the contrary, I have collected many quotes from George W. Bush and his top officials claiming the...more

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  • Robert Reich

    Why We Allow Big Pharma to Rip Us Off

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  • Tim Duy's Fed Watch

    Is There a Wage Growth Puzzle?

    Is there a wage growth puzzle?  Justin Wolfers says there is, and uses this picture:   to claim: This puzzle isn’t entirely new, as the usual link between unemployment and the rate of wage growth has totally broken down over recent years. ​The recent data have made a sharp departure from the usual textbook analysis in which a tighter labor market leads to faster wage growth, and subsequent cost pressures feed through to higher inflation. But has the link between wage growth and unemployment "totally broken down"? Eyeball econometrics alone suggests reason to be cautious with this claim as the only deviation from the typical unemployment/wage growth relationship is the "swirlogram" of fairly high wage growth relative to unemployment through the end of 2011 or s...more

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  • The Baseline Scenario

    Game of Thrones, The Wire, and the New York Fed

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  • macroblog

    On Bogs and Dots

    Consider this scenario. You travel out of town to meet up with an old friend. Your hotel is walking distance to the appointed meeting place, across a large grassy field with which you are unfamiliar. With good conditions, the walk is about 30 minutes but, to you, the quality of the terrain is not so certain. Though nobody seems to be able to tell you for sure, you believe that there is a 50-50 chance that the field is a bog, intermittently dotted with somewhat treacherous swampy traps. Though you believe you can reach your destination in about 30 minutes, the better part of wisdom is to go it slow. You accordingly allot double the time for traversing the field to your destination. During your travels, of course, you will learn something about the nature of the field, a...more

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  • Richard's Real Estate and Urban Economics Blog

    How the price of a Martini reveals the property value of a city

    A Hendricks Gibson is basically a commodity (although the bartender does need to know what she is doing). But a good Gibson at the Starlight Lounge in LaCrosse, Wisconsin is $8; at the Roof Garden at the Peninsula Hotel in Beverly Hills is $16; at the King Cole Bar of the St. Regis Hotel in New York is $22. Let's say the cost of the cocktail, including labor, but exclusive of real estate, is $7. Then the implicit rent you are paying for sitting in a bar in LaCrosse is $1; in Beverly Hills on a rooftop is $9; and in NYC is $15. If one consults Zillow, one will find that this ratio of 1:9:15 for real estate in LaCrosse, BH and Manhattan is pretty close to the truth.One key thing--all these drinks are served in competitive markets--there is true thickness in bars in t...more

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  • Richard's Real Estate and Urban Economics Blog

    How Piketty's care with language can improve economics

    When I was a freshman in college, I read Fogel and Engerman's Time on the Cross.  I loathed the book, because it implicitly endorsed the idea that it is OK, "in the interested of science," to dehumanize those African-Americans that were placed in bondage by viewing them as capital (I loathed it for other reasons as well, but that is for another time.) It also contributed to the broad view currently within much of mainstream economics that it is (1) acceptable to treat human beings as objects, and (2) that it is embarrassing to embrace humanity.  I was embarrassed that the book helped Fogel ultimately won the Nobel Prize in economics.I thought of Fogel and Engerman again when a recent review in the Economist of Edward Bishop's The Half Has Never Been Told compl...more

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  • Macro and Other Market Musings

    The Love Affair Conservatives Should Be Having

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  • Jeffrey Frankel's Blog

    Piketty’s Fence

    Most of the reviews of Thomas Piketty’s book Capital in the Twenty-First Century have already been written.  But I thought it might be best to read it all the way through before offering my own thoughts on this book, which startlingly rose to the top of the best seller lists last April.  It has taken me five months, but I finished it. One of the things the book has in common with the Karl Marx’s Das Capital (1867) is that it serves as a rallying point for the many people who are passionately concerned about inequality, regardless whether they understand or agree with the specific arguments contained in the book in question.  To be fair, much of what Marx wrote was bizarre and very little was based on careful economic statistics.  Much of what Piketty says is ba...more

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  • Piggington's Econo-Almanac

    August 2014 Housing Data Rodeo

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  • macroblog

    The Changing State of States' Economies

    Timely data on the economic health of individual states recently came from the U.S. Bureau of Economic Analysis (BEA). The new quarterly state-level gross domestic product (GDP) series begins in 2005 and runs through the fourth quarter of 2013. The map below offers a look at how states have fared since 2005 relative to the economic performance of the nation as a whole. Learn About Tableau It’s interesting to see the map depict an uneven expansion between the second quarter of 2005 and the peak of the cycle in the fourth quarter of 2007. By the fourth quarter of 2008, most parts of the country were experiencing declines in GDP. The U.S. economy hit a trough during the second quarter of 2009, according to the National Bureau of Economic Research, but 20 states an...more

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  • Dani Rodrik's weblog

    Back to sanity on economic convergence

    It’s been interesting to watch how the conventional wisdom on rapid convergence – developing countries closing the gap with the advanced economies – has been changing over the last few years. It wasn’t so long ago that the world was in the grips of emerging-markets mania, projecting wildly optimistic growth numbers decades into the future. For the last 4-5 years, I have been writing that the pace of convergence we have experienced over the last two decades is unsustainable. There were temporary factors (cheap capital, low interest rates, high commodity prices, rapid Chinese expansion) which would begin to reverse themselves. And perhaps most importantly, export-oriented industrialization was running out of steam much earlier, even in the relatively successful co...more

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  • Macro and Other Market Musings

    Another Bond Market Conundrum?

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  • Macro and Other Market Musings

    About the Fed Not Trying Hard Enough To Hit Its Inflation Target

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  • Jeffrey Frankel's Blog

    Modi, Sisi & Jokowi: Three New Leaders Face the Challenge of Food & Fuel Subsidies

    In few policy areas does good economics seem to conflict so dramatically with good politics as in the practice of subsidies to food and energy.  Economics textbooks explain that these subsidies are lose-lose policies. In the political world that can sound like an ivory tower abstraction.   But the issue of unaffordable subsidies happens to be front and center politically now, in a number of places around the world.   Three major new leaders in particular are facing this challenge:  Sisi in Egypt, Jokowi in Indonesia, and Modi in India. The Egyptian leader is doing a much better job of facing up to the need to cut subsidies than one might have expected.  India’s new prime minister, by contrast, is doing worse than expected – even torpedoing a long-anticipated ...more

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  • Piggington's Econo-Almanac

    July 2014 Housing Data Rodeo

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  • Dani Rodrik's weblog

    My moonlighting career of the last 4 years

    At long last, Turkey's consitutional court has reversed the conviction of the more than 200 officers previously found guilty in the bogus Sledgehammer coup plot, leading to the release on June 19th of all those in jail (including my father in law). Even though a retrial is to take place, the ruling is a coda to the last four-and-a-half years during which my wife and I moonlighted as criminal investigator, forensic analyst, and political activist. It has been a truly surreal and bizarre experience, given how so many intelligent people bought into -- and refused let go of -- a coup plot that was patently fictitious.     So I thought this would be a good time to post a longish account of my involvement in the story. I wrote it as much to make sense of it to...more

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  • The Becker-Posner Blog

    Farewell

    In memoriam: Gary S. Becker, 1930-2014. The Becker-Posner blog is terminated. Richard A. Posner

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  • Rick Bookstaber

    Piketty Myopia

    Thomas Piketty's book Capital in the Twenty-First Century has been lauded for its detailed analysis of data and for the end result of that analysis, a sweeping statement of an inexorable widening of the distribution of wealth between those with capital and those without. There is unabashed glee among those who have bemoaned the plight of the middle class as the one percent has pulled away, waving the book as the gotcha ya for income redistribution.  As should be clear from some of my previous posts, I am one of those people bemoaning the plight, but I am a little slower than many others to take up the Piketty banner. The book's argument looks at wealth and growth data over the past three centuries, and takes its implications forward with a similar, historical scope...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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  • 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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  • 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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  • 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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  • 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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  • 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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  • 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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  • 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).

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