It won’t be quite as satisfying as having Marshall McLuhan stashed in a corner to back up your argument, but for the next time you find yourself in a real-time wonkfight, FRED (the go-to database of the St. Louis Fed) is now available as a mobile app.
If you’re in Manhattan or have access to an internet connection tomorrow (Nov. 8), Reuters is sponsoring a Keynes vs. Hayek debate between two teams of economists and writers, including the Levy Institute’s James Galbraith.
“Four Keynesians – economist James Galbraith, son of the high priest of Keynesianism, John K. Galbraith; New Yorker columnist John Cassidy, Sylvia Nasar, the historian of economic thought and author of Grand Pursuit; Steve Rattner, the architect of Obama’s auto company bail-out – will slug it out with four Hayekians – Economics Nobel Prize-winner Edmund Phelps; Professor Lawrence H. White of George Mason University; Diana Furchtgott-Roth, a senior fellow at the Manhattan Institute; and Stephen Moore of the Wall Street Journal.”
The debate will be hosted at the Asia Society (5:00-7:30 pm) and can be viewed live online here.
Signs of serious inflation in broad price indices such as the consumer price index (CPI) have been rare over the past few years, confounding many critics of the stimulus bill and the Fed’s efforts to reduce interest rates. However, as I reported in a blog entry last spring, most food-commodity prices were rising at that time and had reached levels rivaling those last seen in 2008, when unusually severe food shortages caused serious problems in many parts of the world.
The figure at the top of this post is an update of the graph in the earlier post, based on data released this morning by the Bureau of Labor Statistics (BLS). The brown line shows the government’s estimate of the average real weekly wage for U.S. private sector employees. The series is of course adjusted for overall inflation, so that it represents actual purchasing power, not a number of dollars. (I have used a slightly different wage series than I used last time.)
The other lines show the same weekly earnings data series in terms of various categories of wholesale agricultural commodities, rather than a varied “shopping cart” of retail goods and services. Each line represents the value of average weekly earnings in terms of one major “food group,” to slightly misuse terminology from the federal government’s old dietary guidelines. For example, the data shown by the red line indicate that a worker measuring his or her weekly pay in an equivalent amount of fruits, melons, vegetables, and nuts would find that his or her weekly pay fell by 14.3 percent between March 2006 and last month. continue reading…
Without wading into the debate too much, we report on some commentary from the web on yesterday’s announcement that Thomas Sargent and Christopher Sims had won the Nobel Memorial Prize in Economics:
“Free-market” supporters differed greatly in their assessments. One “New Monetarist” argues that the choice of Sargent and Sims represents a nod to the anti-Keynesian “New Classical” school of macroeconomic theory, which introduced rational expectations into macro in the 1970s.
On the other hand, while Edward Glaeser also seems to view the award as partly an anti-Keynesian decision, his comments on Sims and the New Classical School of macroeconomics emphasize Sims’s efforts to minimize the use of macroeconomic theory of any kind in his econometric work:
“Sims — like Sargent, Lucas and Edward Prescott (another great theorist of the post-Keynesian world) — saw that the Keynesian macroeconometric models were a thing of the past, but he understood the ongoing need for economic prediction. Perhaps one day, economic theory will make complete sense of the business cycle, but until that time, policy makers and ordinary investors will still want to have some idea of what lies ahead. Sims’s work addressed that need, free from the confining assumptions of Keynesianism.”
Similarly, at this link, Keynesian-leaning Mark Thoma endorses the argument that Sims’s vector autoregression (VAR) techniques help economists avoid making an inordinately large number of dubious assumptions.
Getting to deeper issues, an economist quoted in a Businessweek.com article notes wryly that the prize is partly about an issue as abstract and unworldly as cause and effect: continue reading…
This one is for every graduate student who’s been on the receiving end of a glazed/skeptical/bemused expression after trying to respond to a “so what’s your dissertation about?” query. Your elevator pitch would go over much better if it were more kinetic. Via GonzoLabs, Science magazine and TEDxBrussels are sponsoring a competition for PhD students in science-related fields for the best dissertation interpreted through dance. There don’t seem to be many entries from economists (dismal, dismal), but these physics students look like contenders (incidentally, there’s still time for some last-minute, ill-considered choreographing. The deadline is Oct. 10.):
“For years I have been trying to explain to my mother what it is I do. This video was aimed at her. She now finally understands what the point of my research is. If I had known that all it would take was a little dancing, I would have done this a long time ago.”
“A rollicking saga that involves all sorts of things not normally associated with think tanks – chickens, pirate radio, retired colonels, Jean Paul Sartre, Screaming Lord Sutch, and at its heart is a dramatic and brutal killing committed by one of the very men who helped bring about the resurgence of the free market in Britain.” Over at the BBC, Adam Curtis provides an entertaining mini-history of think tanks in the UK — the “dealer in second-hand ideas,” as Hayek allegedly described them.
Featuring this fantastic image of an early pamphlet (easily the best title ever for a political pamphlet, or anything else for that matter):
The author is a Professor at the National Institute of Public Finance and Policy, New Delhi. His views are his own.
An anti-corruption movement in India, run by a set of elites primarily from Delhi, has put poor Anna Hazare out in front and called itself a national movement. Their key demand is an anti-corruption citizen ombudsman bill, the Jan Lokpal Bill (JLPB), which would create an independent body investigating corruption cases, completing the investigation, and holding a trial within a specific time frame.
Is the Jan Lokpal Bill (JLPB) the path toward a corruption-free India? Presumably, if the answer were a straight forward “yes,” we would probably have had a JLPB by now. The founding fathers of this nation have gifted us a Constitution which laid the foundation for a vibrant democracy, a secular republic, and a federal structure. This strong foundation has not only kept this country together despite its adversities, but it has also been able to accommodate the needs and aspirations of people of diverse cultures, ethos, and religion with a fair degree of success. If the JLPB or a law of such nature were so important, certainly our founding fathers would not have deprived us of that perceived magic wand to keep India corruption-free. In the existing system itself there are sufficient institutional safeguards against corruption. Unfortunately, corruption continues to grow despite these safeguards. Public anger against corruption is justified, but Anna’s methods are not. continue reading…
While public discussion in the last several weeks has been absorbed by the debt ceiling saga, and in the coming weeks will probably focus on the S&P downgrade, employment (or lack thereof) is still a major problem. Our employment problem is one of the main factors contributing to a sizeable government deficit and growing public debt.
For all those who think that government has expanded wildly during the recession as a result of the fiscal stimulus, think again. The chart above shows that of the 7.3 million jobs lost since November 2007, 300,000 of those were lost in the government sector; more specifically in local government, which accounts for about 64% of the employment in the government sector. Local governments have to run a balanced budget, and when a recession hits and their tax receipts decline, they have to cut expenses—which means fewer jobs. If the federal government were to embrace similar balanced-budget policies, its ability to support a struggling economy would be severely curtailed. It would not only be unable to create jobs directly; it would struggle to even maintain its existing workforce.
The chart below shows one measure of the employment rate, computed as a percentage of the working-age population. This share rose in the post-WWII period with the increase in the female participation rate. It stabilized in the twenty years before the Great Recession at around 63%, dropped to 58% during the recession, and has remained roughly stable in the last ten months. To see what the prospects are for employment going forward, we have made some simple calculations. continue reading…
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