Category: Equitablog

…Ben Walsh argues that the boom in oil jobs… is over…. Shane Ferro reports that one million Americans are at risk of losing access to the Supplemental Nutrition Assistance Program…. The United States has the highest GDP per capita, but as Matt Bruenig shows, incomes at the bottom are higher in other developed countries…. What explains the decline in the labor share of income? Dylan Matthews looks into the competing hypotheses…. Cardiff Garcia lays out his observations from the annual Allied Social Sciences Associations meeting…. Ben Casselman and Andrew Flowers… noticed that economists seem to be more engaged with policy.

…the standard measure of these things, half the size of the container you see on an 18 wheeler trucking rig…. You can get 30 cubic metres of packing peanuts into one and not have to worry very much about the weight. But 30 cubic metres of gold or lead placed on the back of a truck will have the axles exploding into metal shards pretty much instantaneously…. Less than half the density of water and it’s volume that is important. More than that and it’s the weight…. The larger picture about shipping and containerisation [is that] it’s almost certainly true that this one technology is vying with the mobile phone as being the most important influence upon our lifestyles since WWII. Certainly vastly more important than anything that has come out of Congress or the House of Commons in that time. If you want to know quite how much difference then I recommend The Box (although I think he manages to underplay the economic impact)….And both the Vox and BBC pieces are interesting as well. Even if MSC Oscar cannot in fact carry 900 million cans of dog food.

…surprising combination of solid job gains and decelerating wage growth…. Overall, the story is one of ongoing improvement in labor markets…. Wage growth, however, nosedived…. If June rolls around with no inflation and no greater wage growth, the Fed will find it challenging to begin normalization…. The wage numbers present a dilemma for the Fed. Simply put, no wage growth means the Fed can’t be particularly confident that inflation will trend toward target…. The Fed is still looking at June, but they need some more help from the data. Of course, June is still a long way off…”

…is not going to get [Republicans] any closer to repealing Obamacare…. If they actually succeeded in getting this bill passed… they… further entrench the 2010 health-care bill…. A weaker employer mandate will push more people onto the exchanges. Many of those people would be receiving subsidies. The more people who receive subsidies, the harder repeal of the whole law will be…. It’s hard to see why Republicans want to push more people into that part of the system, and hasten the sclerosis that makes programs so hard to kill or change once they have accumulated a lot of users. We haven’t even discussed the extra cost of providing subsidies to millions more people. Republicans seem to like taking votes against Obamacare so much that they’ll vote for anything that undoes what Democrats put in place–even if that thing costs a bunch of money, and takes them further from their stated goal of repealing the whole bill. They need a better hobby…

…telling me that US growth disproves the idea that austerity is bad for you at the Zero Lower Bound (ZLB). Jeffrey Sachs just joins a long list…. With recent US experience, there is no case against Keynesian analysis to answer. This suggests to me two things. First, lots of people are desperate to show that critics of austerity at the ZLB are wrong, and are prepared to make nonsense arguments to that end. This may be particularly true if you very publicly proclaimed the need for austerity in 2010…. Second, it is a sad day when anyone thinks that 2.3% growth is ‘brisk’ when we are recovering from a deep recession and interest rates have remained at the ZLB. It is so very dangerous when these diminished expectations become internalised by the elite…

…that [Europe’s power-brokers] share? It is the magic economy dust formula of ‘structural reforms’. It is the idea that if national governments just sprinkle enough structural reforms into the economy to enhance market competition they will, eventually, generate the conditions for employment growth. This is captured perfectly in a recent analysis by Marco Buti, the Director General (DG) of the Economic and Finance Commission. He outlines a trilemma for the Eurozone: we cannot have the welfare state in a fixed monetary union that requires reducing fiscal deficits to 3 per cent of GDP. This is true. In order to keep the welfare state, he proposes a consistent policy ‘trinity’: banking union, symmetric adjustment (i.e. inflation in the core) and deep structural reforms. These, we are told, will generate the conditions for economic growth. In turn, with full employment, the welfare state is secure. This is the core idea behind the policy response to the Eurozone crisis and it is worth stating clearly if its merits can be tested against rational argument and empirical evidence…

…for the failure of the US inflation rate to fall as far during the Great Recession as the Phillips curve would predict. Either expectations have been successfully anchored by the Fed’s inflation target, or the Phillips curve is focusing on the wrong thing–aggregate unemployment instead of short-term unemployment. This column shows that the two explanations are complementary; together, they explain the puzzle, but separately they cannot…