Krugman today makes an excellent point:This is what you need to know: important people have no special monopoly on wisdom; and in times like these, when the usual rules of economics don’t apply, they’re often deeply foolish, because the power of conventional wisdom prevents them from talking sense about a deeply unconventional situation.
I'm a few days late with this, but much of the mainstream media have covered it already. The recession is over. Officially. We are now in recovery officially. Actually we've been in recovery for over a year now, ever since June 2009. The official pronouncement is here. Of course this has led to much confusion … Continue reading It’s Over. Economists are Speechless.
The anti-stimulus types who have been apoplectic about the FedGov Deficit warned us higher inflation, if not hyper-inflation would be just months away. That was last year. Let's look at the data: From the BLS report on the Consumer Price Index on Sept 17: The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 … Continue reading CPI: What Inflation?
A good article from Mark Thoma explaining what automatic stabilizers do, how they work, and why they are such an important policy in fighting recessions and keeping booms from getting out of hand. See here at The Fiscal Times.
The Bush-era tax rate cuts are scheduled to automatically expire at the end of 2010. There are different proposals for what to do ranging from Do Nothing to Extend Tax Cuts for people under $250,000 income to Extend Cuts for all. Confused about how the different proposals would affect you? Check out this online tax-cut … Continue reading Tax Cut Calculator
Macro economic policy making is often characterized as a trade-off between achieving full employment vs. achieving stable money (no significant inflation). This relationship or trade-off,to the extent it exists, is called the Phillips Curve. [note: the stability and existence of a long-run trade-off is highly contested by some]. In this post, I want to look … Continue reading Unemployment vs. Inflation: Which is Worse? Part I
Rdan and Dale Coberly at Angry Bear give us a short summary of the true effective tax rate for different groups of taxpayers. The effective tax rate is basically: TotalTax$Paid / Income = Eff.Tax Rate%. Note this is different from the marginal tax rate which is the percent of the next (additional) dollar of income … Continue reading Just How Bad is the Income Tax Burden?
The talk about "uncertainty about government regulation or healthcare" as being the major reason why businesses are holding back and not hiring is just plain nonsense. It's not supported by either any intelligent micro-level analysis of firm level decision making. It certainly isn't what the businesses themselves report when asked. We turn to the NY … Continue reading It’s the Lack of Demand, Stupid
One of the criticisms leveled against the Federal Government's efforts of the last couple of years in response to the Great Recession is that the "government is gettng too big". Well as they say on TV, let's go to the tape. Or, in this case, let's look at the actual numbers over time. Fortunately, we … Continue reading The Invisible Ever-expanding Government Sector
Another late catch-up post for my classes. The Employment and Unemployment reports came out Sept 3 for August, 2010. Calculated Risk covers the story with the usual impeccable graphs. It's pretty close to the expected. Not as bad as feared, not as good as hoped, and nowhere near as good as we need. From the … Continue reading Unemployment, August 2010