Frictional, Structural, Cyclical Unemployment Defined

Mark Thoma explains the difference between cyclical, structural, and frictional unemployment: As I noted in a previous post, economists define three types of unemployment: frictional, structural, and cyclical: Frictional unemployment is defined as the unemployment that occurs because of people moving or changing occupations. Demographic change can also play a role in this type of … Continue reading Frictional, Structural, Cyclical Unemployment Defined

News Flash: US Not Dependent on China

Facts are stubborn things.  For the crowd that believes government borrowing drives up interest rates and "crowds out" private investment, facts and reality are also very inconvenient.  Marshall Auerbach, guest blogging for Yves Smith at Naked Capitalism reports the latest facts: In a post titled “China Cuts US Treasury Holdings By Record Amount,” Mike Norman … Continue reading News Flash: US Not Dependent on China

Inflation or Deflation? Look at Data

For nearly two years now the neoclassical, quantity-of-money-theory inspired folks have been fearing inflation.  Inflation, it has been said, was the necessary end result of the government deficits and central bank bailout efforts that helped keep the Great Recession from turning into Great Depression 2.0.  Let's look at the data: Click on graph for larger … Continue reading Inflation or Deflation? Look at Data

Why Long-Term High Unemployment Is Bad. Very Bad.

First, let's review what's happened with unemployment in the U.S. during this depression Great Recession.  It's the red line that is most disturbing - the % of labor force that is still looking for work after being unemployed for over 6 months. As the graph shows, this is new stuff.  Well actually it has happened … Continue reading Why Long-Term High Unemployment Is Bad. Very Bad.

Stacking the Deck Against Workers and Seniors

Marshall Auerbach at New Deal 2.0 lays out the poorly-reported situation on President Obama's Commission on Fiscal Responsibility.  The deck is stacked against Social Security. Several of the commission members have clear conflicts of interest and would personally benefit from privatization of SS or at least reduction of future SS benefits.  Yet there are no … Continue reading Stacking the Deck Against Workers and Seniors

“Sovereign Default” is an Oxymoron With Fiat Money

Again, there is no risk - none, zip, nada - of default by the US (or any other currency sovereign nation) on their government bonds.  This does not mean that these governments can run unlimited deficits of unlimited amounts without any consequences.  It means the consequences don't include default on government bonds.  If the government … Continue reading “Sovereign Default” is an Oxymoron With Fiat Money

Behavioural Economics

The majority of what is taught in Principles of Economics courses, both macro and micro, reflects what should properly be called "Neo-classical" economics. Despite the imperial claims of neo-classical economists, it is not the only game in town. Neo-classical economists like to claim that they practice "positive economics". By positive economics, they mean that the … Continue reading Behavioural Economics