After the Great Recession, commentators have espoused their idea of the “New Normal”—a post-growth era of stagnant developed economies. But is it so simple? Nouriel Roubini and Ian Bremmer appeared on Charlie Rose to discuss their take on what the new paradigm will be like. Roubini differentiated what he is calling the “New Abnormal”: “Our point … Read more
Last week Allan Sheahen published a piece arguing that “Jobs Are Not the Answer” to America’s unemployment problem. Here’s his reasoning: “The current unemployment rate of 7.5% percent means close to 20 million Americans remain unemployed or underemployed. Nobody states the obvious truth: that the marketplace has changed and there will never again be enough … Read more
In the first part of my review of Robert and Edward Skidelsky’s How Much is Enough? I looked at the puzzle of leisure. Why, the Skidelskys ask, do we work so hard, even when we are well enough off to afford the additional leisure we need to live a good life? Beyond that follow some … Read more
Each quarter the Fed releases their assessment of the economy and their forward looking projections for three years into the future. (See Fed Projections Myth Vs. Reality for the March analysis) While Bernanke puts on a great “dog and pony” show for the media – there are only two primary issues with which the financial markets are most concerned. The … Read more
Warning: This post has little to do with economics, unless you happen to think that an open society with free and private communication is essential to our continued prosperity. A series of Congressional hearings this week is drawing renewed attention to the issue of the National Security Agency’s program to collect data on telephone and … Read more
Brazil’s GDP performance has been lackluster since the post-crisis rebound in 2010. Prospects for 2013 look a little better: unemployment rates have remained low, and data from the first quarter of the year suggest improving growth rates. Investment also rose ahead of consumption, which may mean a more balanced growth pattern (see Chart 1). And … Read more
A turbulent political transition: from hope … In February 2011, a youth-led movement toppled President Hosni Mubarak. A 30 year-dictatorship ended in 18 days. About 800 people died. As elsewhere is the Arab world, the popular uprising intended to subvert an élite-centric political and economic system. The military, led by commander-in-chief and defense minister Mohamed … Read more
The yield on 10-year U.S. Treasuries has jumped 50 basis points since the start of May, leading some to speculate that the market is already starting to price in anticipation of an end to the Fed’s bond-buying program. There may be some truth to that, but it’s only part of the story. It’s helpful to … Read more
Robert Skidelsky is best known for his definitive three-volume biography of John Maynard Keynes. It hardly surprising, then, that he begins his latest book, How Much is Enough? (co-authored with his son, the philosopher Edward Skidelsky), with a puzzle posed by the master himself. Why is it that we work so many hours each week … Read more
Does the large drop in the U.S. labor force participation rate justify a monetary policy that is easier, for longer, than suggested by our models or the Fed’s current description of its policy? Chris Erceg and Andy Levin, two senior researchers at the Fed now on leave at the IMF, argue yes. Their analysis will provide fuel … Read more