Reading the Federal Reserve’s Tea Leaves Dot Plots

It is always instructive to look at the materials that the Federal Reserve's Federal Open Market Committee pumps out, especially their semi-anonymized (hi, Charlie Evans, with your 3% longer-run value) estimates of what the appropriate federal funds rate would be. Thus we can see, comparing January 2012 when the Federal Reserve began publishing its dot-plots to today, the Federal Reserve collectively and slowly come to recognize current reality. Back at the start of 2012 the FOMC participants all thought that in the "longer run"--which at... More >

Things to Read at Night on March 27, 2015

Must- and Should-Reads: Evening Must-Read: Michael Strain: How to Cut Taxes and Help the Poor Kenneth Thomas: Wikileaks Releases Trans-Pacific Partnership Investment Chapter Today's Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality? Nick Bunker: Risk-Sharing and Student Loans Might Like to Be Aware of: Jan Ebbeler: Felicior Augusto, Melior Traiano Joe Nye**: The American Century Will Survive the Rise of China

Today’s Economic History: John Maynard Keynes on the Trade Cycle

Over at Grasping Reality: John Maynard Keynes: The General Theory of Employment, Interest and Money: 22. Notes on the Trade Cycle: "The essential character of the Trade Cycle, and, especially, the regularity of time-sequence and of duration which justifies us in calling it a cycle... ...is mainly due to the way in which the marginal efficiency of capital fluctuates.... By a cyclical movement we mean that as the system progresses in, e.g., the upward direction, the forces propelling it upwards at first gather force and... More >

With a First-Quarter-of-2015 Projected Real GDP Growth Rate of 1.3%/Year…

...the U.S. economy will have grown at a rate of: 2.8%/year over the past four quarters. 2.5%/year over the past eight quarters. 2.2%/year over the past twelve quarters. If you think that the growth rate of potential output post-2009 is 2.2%/year, we are in exactly the same position relative to potential output that we were in March of 2012. And thus monetary and fiscal policy looking forward should be the same now as they should have been in March of 2012. And if you think... More >

Evening Must-Read: Michael Strain: How to Cut Taxes and Help the Poor

Michael Strain: How to Cut Taxes and Help the Poor: "Many tax expenditures are obscure. But several are familiar to large swaths of Americans, including the mortgage-interest deduction.... Who benefits from this subsidy?... In 2013, the mortgage-interest deduction cost a whopping $70 billion, nearly three-quarters of which accrued to households with income in the highest 20 percent of the population, with 15 percent going to the top 1 percent.... More than half of the tax benefits from the 10 costliest tax expenditures were enjoyed by households in... More >

Today’s Must-Must-Read: Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?

Ilyana Kuziemko et al.: What Do Americans Think Should Be Done About Inequality?: "While respondents who view information about inequality are more likely to believe that inequality is a serious problem... ...they show no more appetite for many government interventions to reduce inequality— with the notable exceptions of increasing the estate tax and the minimum wage. Our working hypothesis is that those surveyed alighted on the estate tax because it applies to many fewer Americans than respondents had assumed. And respondents favored increasing the minimum... More >

Auto Title Loans: Am I Wrong in Noting a Flagging in Heartland Regional Boosterism?

Live from Elmwood Cafe: Annamarie Andriotis: The Pitfalls of Payday-Like ‘Title Loans’: "As a federal regulator is expected to release new rules for payday loans, a study suggests borrowers who take out ‘title loans’ against the value of their cars encounter many of the same issues... ...On average, title-loan borrowers pay $1,200 in fees per year on loans averaging $1,000, according to a report released Wednesday by the Pew Charitable Trusts, an independent nonprofit based in Philadelphia. The findings come as the Consumer Financial Protection... More >

Over at Grasping Reality: David K. Levine vs. Chris Sims as Refereed by Paul Krugman, with Additional Thoughts

Over at Grasping Reality: David K. Levine vs. Chris Sims as Refereed by Paul Krugman, with Additional Thoughts: Paul Krugman is the picador.... And Chris Sims is the matador.... Krugman sums up: By any normal set of intellectual criteria... the evidence that monetary shocks have real effects was and is overwhelming, and it’s very difficult to write down a model in which this is true but in which fiscal policy is never effective at least [at the zero lower bound]. The spectacular success of liquidity-trap... More >

Over at Grasping Reality: The Triangle Shirtwaist Factory Fire

Over at Grasping Reality: Erik Loomis: Today's Economic History: Erik Loomis on the Triangle Shirtwaist Factory Fire: On March 25, 1911, 146 workers at the Triangle Shirtwaist Factory in New York City died when the building in which they worked caught on fire. One of the most important events in American labor history, the Triangle Fire brought attention to the terrible sweatshop conditions of American labor, helped spawn important labor reforms.... The Triangle Factory, located in the Asch Building at 23-29 Washington Place in New... More >

Things to Read on the Afternoon of March 25, 2015

Must- and Should-Reads: Afternoon Must-Read: Matea Gold and Tom Hamburger: In 2016 Campaign, the Lament of the Not Quite Rich Enough Morning Must-Read: Alejandro Badel: Economic Mobility across Federal Reserve Districts Morning Must-Must-Read: David Wessel: Why Are Unions so Focused on Fighting Trade Deals? Morning Must-Read: Charles Gaba: Dear Pete Sessions: "Bazillion" Is Not a Real Number Either Today's Must-Must-Read: Robert Skidelsky: Messed-Up Macro Evening Must-Read: Mark Thoma: The Attack of the Anti-Keynesians Roel Beetsma et al.: "Panel regressions based on the action-based datasets of... More >