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CPI Inflation Stuck at Zero as Fiscal and Monetary Policy Threaten to Turn Procyclical
According to the textbook prescription, the ideal time to cut government spending and tighten monetary policy is when the economy begins to approach full employment and the first signs of excessive inflation appear. Economists call that kind of preemptive policy countercyclical because it helps to keep an impending boom from running out of control. On [...]
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Can we Get Along Without the Penny? This Chart May Help you Decide
Can we get along without the U.S. penny? Reportedly, a majority of Americans think we cannot. We’re just used to it. After all, the penny has been around in one form or another ever since George Washington signed An Act to Provide for a Copper Coinage in 1792. What we have not always had is [...]
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Growth and Quality of Life: What Can we Learn from Japan?
There is a growing concern that economic growth, as we know it, is coming to an end. Economists, who tend to view growth as good, are uneasy with that idea. Many environmentalists, who are more prone to focus on the downside of growth, view a steady-state economy more positively. Richard Heinberg, author of the book [...]
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Too Much Flaring of Natural Gas? How a Carbon Tax could Help
After a few years when the practice was declining, flaring of natural gas is back in the news. (See, for example, Flares take shine off fracking boom in the Financial Times for Jan. 27.) Estimates indicate that natural gas flaring accounts for more than 1 percent of all the CO2 that human activity releases into the [...]
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Weekend Reading: The Human Side of the Housing Crash
We’ve all read endlessly about the effects of the real estate bubble on the banking system, GDP, monetary policy, and all the rest. If you have had enough financial analysis, if you are ready to read something about the human side of the housing crash, try reading Tana French’s latest novel, Broken Harbor. The story, [...]
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Why Olive Oil, Good for the Body, is Becoming Bad for the Pocketbook
It seems there almost nothing bad about olive oil. It is delicious, of course, and if you are a connoisseur, you can get as much pleasure from a fine bottle of olive oil as from a premium Brunello di Montalcino. A high content of monosaturated fats makes olive oil among the most heart-healthy of all [...]
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Strong Job Growth and Upward Revisions Contrast Sharply with Reported GDP Decrease
Wednesday’s data release from the Bureau of Economic Analysis surprised us with a reported decrease of 0.1 percent in GDP for Q4 2012. Now, just two days later, a report from the Bureau of Labor Statistics shows robust job growth throughout the last quarter and continuing into January. The two offer sharply contrasting indications of [...]
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US GDP Shrinks in Q4. How to Interpret the Bad News?
Data released today by the Bureau of Economic Analysis showed a decrease of 0.1 percent in U.S. real GDP for the fourth quarter of 2012. If confirmed, that would mark the first quarterly drop in real GDP since the recession ended in mid-2009. Of course, we should always take the advance estimate of GDP with [...]
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Debt Sustainability, Growth, Interest Rates, and Inflation: Some Charts for Discussion and Some Inconvenient Truths for MMT
In a series of posts[1] [2] [3] [4] [5] over the last couple of months, fellow Economonitor blogger L. Randall Wray and I have been exploring the conditions under which the government’s debt can be said to be sustainable. Wray writes from the point of view of Modern Monetary Theory (MMT), while I adopt a [...]
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Tax Incentives for Retirement Saving are not Working. Can we Find a Better Way? (Part 2)
In a previous post in this series, I criticized proposals to raise the eligibility age for Social Security and Medicare. It is already getting harder to save enough for a comfortable retirement; raising the eligibility age would just make it still more difficult. In this installment, I turn to policies to encourage retirement saving, explaining [...]
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Thomas Grennes
Thoughts From Across the Atlantic
Thomas Grennes is a professor of economics at the North Carolina State University and a former visiting faculty member at the Stockholm School of Economics in Riga. His research has dealt with various aspects of international economics, including open economy macroeconomics, international finance, and international trade in agricultural products. Recent research topics have included macroeconomic aspects of the Great Moderation, offshore outsourcing, sovereign wealth funds, and the relationship between government debt and economic growth. Earlier work dealt with emerging market issues in the Baltic countries and Russia and trade and macro policies in Sub-Saharan Africa. Economic history topics include the Columbian Exchange of plants and animals, the effects on food markets of introducing mechanical refrigeration, and the integration of Tsarist Russia into the world grain market. When he is not involved in economics, he enjoys mountain hiking.
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