A Measure to Reduce Inflation, Accelerate Potential Growth

Fix this gap:

Source: Ryan, et al. “No fall chill evident in October employment,” Monthly Chartbook, Deutsche Bank, Nov. 4, 2022.


72 thoughts on “A Measure to Reduce Inflation, Accelerate Potential Growth

  1. pgl

    That series was rising before racist Stephen Miller was given the keys to immigration policy. As soon as this racist POS was ordered to leave the White House, this series started to rise again. Lesson learned – we have to keep Trump and his racist minions far away from the White House.

  2. Moses Herzog

    Is this post’s argument conjoined at the hip with “wage increases are the major reason for inflation”?? If so, I respectfully but strongly differ.

    1. pgl

      Dean Baker’s comments on the latest from BLS noted how nominal wage increases were not that high. Of course allowing more immigration would allow us to have something higher than recent increases in real GDP – assuming the FED backs off on its monetary restraint.

      Now for the prediction of the day with respect to the big game in Athens, GA. Georgia 37 Tennessee 28.

    2. Menzie Chinn Post author

      Moses Herzog: No, but this (along with removal of Trump era tariffs) is one of the ways that the government could actually affect inflation, as adjuncts to monetary and fiscal policy.

    3. AS

      A recent “Heard on the Street” column in the WSJ reported the results of a study saying that inflation was causing wage increases rather than wages causing inflation. I noticed that a simple VAR using core PCE and the Employment Cost Index: Total compensation: All Civilian, Fred series, (ECIALLCIV), showed that core PCE Granger caused the compensation increases.

      1. CoRev

        AS, can your calculations show the lag and difference with inflation? Those of us on SS and other fixed Fed payments know these to be factors.

        Just curious.

    1. pgl

      “Here’s what the Fed is watching: average hourly earnings growth is up month over month, but down over three-months. Stepping back from the noise, trend is clearly downward. Over the past three month AHE was an annualized 3.9%, versus 3.2% in 2018-19 and 6% over last winter.”

      Dean Baker noted the same thing.

    1. Macroduck

      The whole series isn’t much longer and between recessions the trend is quite steady. Choosing a different end point forthe sample probably wouldn’t change the trend. You’d have known that if you’d bothered to check. Assuming the other guy did bad work doesn’t mean the other guy actually did bad work.

      1. pgl

        Econned is still trying to figure out how to make the Quantity Theory of Money reliably predict inflation.

      2. Econned

        I’m confused why you would suggest that “[c]hoosing a different end point forthe [sic] sample probably wouldn’t change the trend” in response to a comment to “[c]hoose a different arbitrary sample start date”.

        Start the trend around April 2018.

        I only responded to Menzie’s challenge to close the gap. This could be done by using a “different arbitrary sample start date when computing the trend” – there’s noting suggesting I assumed anyone did “bad work”. I’m confused why that’s your default reaction (although not surprised given how internet commenters tend to react).

        1. pgl

          BTW – it wasn’t Dr. Chinn who choose how to draw that graph. Read the clear labeling and then take up your whining with the folks at Deutsche Bank.

        2. Macroduck

          Hang on…the guy who wrote the following wants to know why I might suspect him of bad will:

          Menzie Chinn,
          …. Maybe if you apologized for your own manipulations, faults, errors, omissions, blahblahblah others would take such requests from you a tad more seriously.”

          October 12, 2022 at 3:43 am

          Perhaps you’re confused because you think that’s my default reaction. It’s actually more of a conditioned response to you and others like you, not a default. I deal with you like a an annoying chihuahua because you’re an annoying chihuahua – rolled-up newspaper at the ready.

          1. Barkley Rosser


            There are other commenters here dumber then “Econned,” e.g. CoRev. But nobody else here comes close to him in making stupidly inappropriate insults about Menzie, no one, not even close.

          2. Econned

            Confused because my pointing out Menzie’s lack of acknowledging his dishonesty (in an unrelated matter) isn’t relevant here. I agree you’re acting like just another typical internet commenter who is conditioned to respond emotionally without regard to critical thinking.

          3. Econned

            “Barkley Rosser”,
            I didn’t make an inappropriate insult to Menzie here. You’ve failed miserably in your attempt to comprehend the words in front of your face. Yet again. You’re bringing up wholly irrelevant talking points. Yet again.

          4. pgl

            Oh gee – Econned has made all about Econned. Like anyone cares about WTF Econned has written as he never makes a substantive economic point.

          5. Barkley Rosser


            I grant that this comment was less insulting than many you have put up here, although it implied that Menzie was kind of dumb or misleading in what he did, which fits in with your usual efforts to knock him down. As it is, it is more just a dumb comment by you rather than a blatantly insulting one of the sort you so frequently post.

          6. Econned

            “Barkley Rosser”,
            Just imagine how bright you come across as you choose to spend your time writing multiple replies in response to “just a dumb comment” which wasn’t even directed towards you.

          7. Econned

            “Barkley Rosser”,
            You’ve proved my point. Yet again. Hahahaha, it’s far too easy with you.

      3. pgl


        Maybe it would help everyone else to see your point if they looked at the FRED chart which goes back to January 2017. Before Econned’s preferred little date for whatever stupid “point” he thinks he is making – this population was growing at about 0.7 million per year.

        For the 2018-2019 prepandemic period, this series had some noise but it basically fell even before the pandemic. Which is what one would expect with racist Stephen Miller in charge of immigration policy. And of course the pandemic had its negative effect.

        Now excuse me but WTF was Econned saying again? As usual, his inability to explain himself is just staggering.

  3. ltr


    January 15, 2020

    Shares of Gross Domestic Product for Private Fixed Nonresidential & Residential Investment Spending, Government Consumption & Gross Investment and Exports of Goods & Services, 2020-2022

    (Indexed to 2020)


    January 15, 2020

    Shares of Potential Gross Domestic Product for Private Fixed Nonresidential & Residential Investment Spending, Government Consumption & Gross Investment and Exports of Goods & Services, 2020-2022

    (Indexed to 2020)

    1. Ivan

      Nice graphs showing that the immigrants are a plus for our country and its economy. It is nice that we are recovering from the Trump years so fast.

  4. AS

    Why not put an employment office at the border and have the folks wishing to come to this country apply for jobs posted by potential employers?

    1. pgl

      I like this idea. But please do not let Princeton Steve coop it. I know he would love to play the broker making sure the new hires are white enough.

    2. Moses Herzog

      This is a long time complaint for me. Punish the immigrant workers looking to progress their lives~~~ reward Republican owners who bad-mouth immigrants. Republicans are smart on this~~~~Democrat legislators are WILLINGLY dumb. They never “call Repiublicans’ bluff” on how Republican business owners LOVE illegals. Pelosi being incestual with Republican leaderships and some blog hosts apparently are in love with Pelosi’s incest with Republicans on this topic

  5. ltr


    November 4, 2022

    China’s new science biomedical imaging facilities to operate in 2023

    The construction of infrastructure for a big science biomedical imaging project in Beijing was officially completed on Thursday, according to Peking University, which owns the facilities.

    The National Biomedical Imaging Center, with a construction area of about 66,667 square meters, is located in Beijing’s Huairou District and has an approximate total investment of 1.72 billion yuan (about $237.33 million), and is expected to begin trial operations in 2023.

    The center will focus on visually representing and accurately measuring the structures and functions of living organisms, and providing multiple imaging research methods for the study of complex life science issues and major diseases, the university said.

    Imaging technology is needed in a wide range of fields, such as scientific research, medicine, education and industry, and is particularly important for major biomedical problems.

    Without the clear observation of changes on different scales during the pathological process, including changes in molecules, proteins, cells and organs, it is hard to treat diseases accurately, said Chen Liangyi, a biomedical imaging expert at Peking University.

    Biomedical imaging facilities help doctors observe the dynamic processes of diseases in a multi-level, panoramic and visual way, so as to better screen targeted drugs for patients, he explained.

    The newly built project mainly comprises several key devices, used for multimodal medical imaging, multimodal live cell imaging, multimodal high-resolution molecular imaging, and an image integration system, according to the university.

    The completion of the project will promote the country’s research in life sciences, including the brain and cognitive sciences, stem cells and their regeneration, as well as neurological diseases, cardiovascular diseases and the accurate diagnosis of tumors, said Cheng Heping, a professor at the university and the project’s chief scientist….

  6. ltr


    January 4, 2018

    Manufacturing Productivity & Compensation, 1988-2022

    Output & Real Compensation * Per Hour

    * Includes wages, salaries, and employer costs for employee benefits.

    (Percent change)


    January 4, 2018

    Manufacturing Productivity & Compensation, 1988-2022

    Output & Real Compensation * Per Hour

    * Includes wages, salaries, and employer costs for employee benefits.

    (Indexed to 1988)

    [ Labor is not pushing employers to raise product prices. ]

      1. JohnH

        Is there a corresponding series that shows the “productivity” of corporate profit? And maybe one that shows the “productivity” of dividends?

        Could such series serve as a measure of economic rents? If so, I would not be surprised to learn that such series don’t exist.

        1. pgl

          Do you even understand what the concept productivity even means? Didn’t think so. Why don’t you calculate the number of toes in your morning oatmeal? Yea – it would be a stupid question but you questions were even dumber.

          1. Barkley Rosser


            The standard link from profits to productivity is through increased capital investment resulting from higher profits, an old and well known relationship, even if it does not always happen. Duh.

          2. pgl

            November 6, 2022 at 2:04 pm

            Increasing profits leads to higher productivity – that’s your new thesis?
            Why don’t you write such a paper. I hear the National Review would love to publish your right wing supply-side idea.

          3. pgl

            Oh gee – Johnny boy thinks he has found some new research but I guess he forgot to read the paragraph about Henry Ford and efficiency wages. Ah Johnny boy – everyone who has ever bothered to take an economics class would have known this decades ago.

        2. pgl

          There is a well known concept known as the marginal productivity of capital. Anyone who ever bothered to understand basic economics (which excludes you) would know the following:


          In this article we will discuss about Euler’s theorem of distribution.

          According to marginal productivity theory, every input is paid the value of its marginal product. This means that the entire product will always be handed out to those who work on it. In other words, the sum of the marginal products add up exactly to the total output. There is thus neither a surplus nor a deficit left at the end. This proposition can be proved by using Euler’s Theorem. It suggests that if a production function involves constant returns to scale (i.e., the linear homogeneous production function), the sum of the marginal products will actually add up to the total product.

          Not that JohnH has the intelligence to know what this even means. Of course those of us who took economics gets the fact that Euler’s Theorem abstracts from things like monopoly power or monopsony power. Then again JohnH’s dumb questions would not contribute anything to any serious discussion.

  7. pgl

    I know this news will ruin the weekend for our Putin poodles here but it seems Russian soldiers in Ukraine have figured out that their leader sent them there to die and some are surrendering to the Ukrainian soldiers:


    Russian soldiers have abandoned their posts in another major blow to Vladimir Putin. Leaked footage showed 39 troops, of the 252nd motorised rifle regiment, demanding to be returned home just nine days after they had arrived on the front lines in Ukraine. An informer told gulagu.net the men had received just two weeks of training before being sent to the front line, sometimes being abandoned by commanders, and decided to put down their weapons after seeing their comrades be killed and injured in action. “For several days they hid from shelling, some were seriously wounded, others were killed,” said a relative of the men. “Our men ran out of provisions and water, there was no ammunition.

    1. JohnH

      “ In interviews with Ukrainians who have family members fighting the invaders, many said they were upset with the military leadership for deploying inexperienced people to the front lines, and at times sending them into battle without as much as a medical or a psychological examination.”

      Is the report that pg-ly cites propaganda, projection, or accurate reporting? But we do know that pg-ly indulges in a lot of wishful thinking.

      1. pgl

        June 23, 2022

        Did you bother to check the date of your latest spin for your boy Putin? I guess misspelling my sign on gets you a couple of extra bones from your masters at the Kremlin.

  8. Macroduck

    Off topic, massive methane leaks identified –

    NASA got lucky, discovering that technology meant to identify dust from orbit can also identify methane. So far, 50 massive industrial leaks have bern identified.


    As the article points out, methane is 80 times more powerful at trapping atmospheric heat than CO2, and it degrades over time. Fixing leaks could have very large effects in reducing climate change..

    1. CoRev

      MD you obviously believe this: ” Fixing leaks could have very large effects in reducing climate change.” So how much ?Climate change? c/would be REDUCED?

      BTW, that’s a simple question for a simple solution. Here are a couple of questions which lay out the limits of this ?problem?. 1) Has the temperature increased? 2) How much? 3) How long (sets the period of study)? 4) Has methane content increased in the atmosphere? 5) How much? 6) How long (sets the period of study)? 7) What percentage of GHGs in the atmosphere is methane?

      If methane plumes are a ?Climate Change? problem, how big of a problem is water vapor plumes, the largest concentration of atmospheric GHGs.

      Please list any change in the problem limit definitions. If you can not define the problem, then any belief or answer is unsupported.

      I’ll wait for your response. Just like I’m still waiting for your list of non-model-based tipping points.

      1. Barkley Rosser

        Oh, here you go again, CoRev, firing off questions you think are really important and even if they are answered you will whine about them allegedly not being answered. You are so dumb you do not know you have zero credibility in doing this, especially given your still faiirly recent fiasco of going on and on about how a lack of a trend in anoalies off the upward global trend in average temperature meant that there is no such upward trend.

        Indeed, given that the very first one of your incredibly stupid questions is about “how much has temperature increased,?” you are obviously back to your outright global warming denial insanity. Gag and vomit all over you.

        So, some quick checking shows that there are debates going on about just how important methane emissions are for current global warming. I quickly saw a range of estimates from about 16% to about 30%. Macroduck is correct that methane is per volume much more powerful than CO2. But there is a lot more CO2 being emitted, and there is also the mattet that CO2 remains in the atmosphere for a long time, while methane does break down after about a decade or so.

        And that is probably more answers than worthless lying you deserve.

        1. pgl

          No Barkley. You do know a mad dog has to bark incessantly. Let him keep this up as I hear his neighbors are so fed up they have a plan to put down this crazed dog.

        2. CoRev

          Barkley begins the simple ma..arithmetic to calculate methane’s impact on temperature, but will not or is AFRAID to do that simple arithmetic. I wonder if he can answer the question how much temperature has risen since the LIA? I also wonder if anyone here knows which GHG is the most abundant and has the widest range of IR absorption in the atmosphere?

          These are important considerations to refining the gross arithmetic calculations for temperature increase. And, these considerations only scratch the surface of things that impact the refined calculation, but the inability to recognize and consider them in the cause and effect analyses.

          Climatologists do not understand these considerations. If they were understood they would be implemented as formulas, as they are used as constants and (fill in the blanks) parameters in the GCMs.

          1. pgl

            “These are important considerations to refining the gross arithmetic calculations for temperature increase. And, these considerations only scratch the surface of things that impact the refined calculation, but the inability to recognize and consider them in the cause and effect analyses.”

            Seriously? This from someone who has to take off his shoes to count past 10. Gee CoRev – why don’t you provide us your advanced Excel sheet on this? Wait, wait – you are still struggling with 2 plus 2. Never mind.

          2. Barkley Rosser


            Wow, you are so pathetic. I am”AFRAID”? No. I just have not dug super deeply into all the research on methane and climate, and, sorry, not going to. I went and did a quick scan on google and reported here what I saw, which gives more or less a picture, and I think is not too inaccurate. What “simple arithmetic” am I supposed to do beyond the math behind the reports I saw on google?

            And, no, please do not try to lecture us on anything having to do with math. Do please keep in mind we have it very much on our minds your most recent total fiasco that you went on and on about regarding how a lack of trends in anomalies off a trend meant that the trend they were off of did not exist. That was elementary school bad, as 2slugbaits noted, yes, a completel failure of “simple arithmetic.”

            And, please do not tell us that “climatologists do not understand these considerations.” They understand them far better than idiotic worthless you.

          3. 2slugbaits

            CoRev how much temperature has risen since the LIA?

            About 1.1 degrees centigrade, but the majority of the warming has come since 1975.

            I also wonder if anyone here knows which GHG is the most abundant and has the widest range of IR absorption in the atmosphere?

            Wonder no more. Everyone knows that water vapor is the most abundant GHG and has the widest range of IR absorption. Now, did you know that absent temperature change, the amount of water vapor in the atmosphere is constant? And as we all know (well…you probably don’t know this), the first derivative of a constant is zero. So the amount of water vapor plays no role in climate change as long as temperatures are constant. Of course, temperatures are rising because of other GHGs, so water vapor will be one of those reinforcing effects that climatologists worry about.

            As to your understanding of math, I’ll point to two recent examples. A few weeks ago you linked to a chart purporting to show some kind of pause in temperatures. I’ll note that the graph was based on satellite data of land temperatures at a monthly granularity. That should have set off all kinds of alarm bells in your head if you understood anything about statistics. For example, you could have done a Bonferroni outlier test. Or you could have plotted a Cook’s distance test of the residuals to test for influential observations that subvert the OLS regression. You would have found that three autocorrelated observations in early 2014 entirely explained your weird result. Of course, using annual data rather than monthly data would have (and does) fix that problem. It also shows a clearly rising trend. Your second knee-slapper was your recent comment to AS regarding his vector autoregression. I cannot understand why anyone who comments on a blog owned by Jim Hamilton would ask such a dumb question about VARs. I would have thought anyone drawn to Jim Hamilton’s blog would at least have some minimal understanding of time series analysis. But I guess I was wrong.

          4. CoRev

            Barkley & Ole Bark, bark can/will not do the simplest arithmetic to calculate how much methane adds to Annual Global Average Temperature? Or if methane reduction is successful, calculate how much Annual Global Average Temperature can be reduced?

            C’mon now, they must really be SCARY? Uh huh, or just more scare mongering to the climate ignoranti.

          5. CoRev

            2slougs at least answers a couple of questions. 1) how much temperature has risen since the LIA? 2) which GHG is the most abundant and has the widest range of IR absorption in the atmosphere?

            But he also eschewed the simplest math to calculate the POSSIBLE worst case impact on Global Average Temperature. Methane makes up 0.00017% of the atmosphere and says this: https://ourworldindata.org/greenhouse-gas-emissions#by-gas-how-much-does-each-contribute-to-total-greenhouse-gas-emissions
            “Carbon dioxide was the largest contributor , accounting for around three-quarters (74.4%) of total emissions. Methane contributed 17.3%; nitrous oxide, 6.2%; and other emissions (HFCs, CFCs, SF6), 2.1%.” So the simplest arithmetic calculation tells methane affected 0.19 C of temperature or if you believe the worst case of 80 times worse than CO2 15.4C.

            HUH!!!!! Where are those 15.+ degrees C of methane warming hiding? In the oceans as some climatologists and ignorantly naive liberals want us to believe, but the numbers and are just as bad as the atmospheric effect numbers.

            If you stumble around on the site you will find a chart showing per capita methane emission for the world have DECREASED since 1990. So what’s the climate problem re: methane?

            2slugs added a lot of detail which adds little value tot he discussion re: methane. However there is value in his discussion over IR absorption within atmospheric GHG molecules. Yes, water vapor is the largest absorber. Is its atmospheric content a constant only increasing with increasing temperature? Now that is a serious contention, as it is the basis for the “runaway temperature increase” contention. If it were true, then “runaway temperature” would have happened /millions of years ago.

            Nope! Never happened.

            I also think his and climatologists reliance on recent historical records is misleading. Historically, geological records are clearer and tell a better story. We are in an Ice Age, made up of glaciations and the inter-glacial warm periods. There is no question of this, and concentrating on a few recent decades can not change that not an existential threat due to warming.

            To believe this existential concerns, believers must willfully ignore all these simple facts and arithmetic.

          6. 2slugbaits

            CoRev Sorry, but once again you got the math wrong. For your edification:


            To begin with, you’re confusing emissions and radiative forcing. The relevant number is radiative forcing, and methane accounts for about 30% of that since the industrial revolution.

            You also miss the big point. The issue isn’t how much methane has contributed to global warming in the past. The concern is what would happen if global warming releases massive amounts of methane currently trapped in frozen tundra and other methane rich environments.

            Your comment regarding water vapor is confused. On the one hand you agree that water vapor is a powerful GHG. But then this comment:
            If it were true, then “runaway temperature” would have happened /millions of years ago.
            seems to contradict your earlier statement. But for your edification, it is true and historically that have been periods of runaway temperatures.

            More confusion regarding geologic time. To begin with, you and I don’t live in geologic time. We live in human time. More importantly, geologic time includes all kinds of physical geological events that are irrelevant to the current problem. For example, over geologic time the Earth’s axis has shifted around; the sun’s output has changed; and the positions and shapes of the continents and oceans have changed.

      2. pgl

        Dude – your rants do not deserve a reply. Either learn to write coherently or go both Marginal Revolution.

  9. pgl

    NBC News reporter Miguel Almaguer provided a completely bogus account of what happened between Paul Pelosi and David DePape just before the police intervened:


    Now NBC took down its sloppy and false story but that has not stopped the likes of Tucker Carlson going off with their disgusting attacks on the victims. Look – I have noted any outfit that allows Tucker Carlson to spread vicious lies should be disbanded. But WTF did NBC think it was doing? Dudes – there is a police report that detail the events accurately. Would it be too much to ask the press to effing READ it?


    Nope. With the labor market normalizing, “they” aren’t needed. Typical neoliberal stuff Republicans are already doing.

  11. Macroduck

    There really does seem to be a new set of instructions to the troll choir. Brucey, Stevie, Johnny, CoVid, all putting in one last push to stoke irrational fear. Somewhere in their new marching orders must be a line telling them not to worry about coherence – well, perhaps to worry even less about coherence than usual – since it’s not rational fear they’re peddling.

    Seriously, they are all back at once, all saying any little thing that comes to mind. It’s a blight on rational discourse.

    Imagine the dreck they have in store for after the election: Denialism, triumphalism, lies and strawman accusations, all scramled together. It’ll be such a treat.

    1. CoRev

      MD, speaking of strawman accusations, this comments is another attempt to ignore the policy, inflation, recession and economic performance denials present here for the past ~year.

      Go for it and take your best shot. Tuesday is very, very close.

    2. JohnH

      Thanks for your consummately incoherent comment, MacroDucky! You respond to alleged fear mongering with a dose of your own. Brilliant!

      1. pgl

        Awww – I did get the sense that Princeton Stevie has decided not to be your BFF anymore. So good luck dating CoRev!

          1. pgl

            Come on – don’t be shy. Tell us all about your hot date with CoRev. Or did Putin give him your bones?

Comments are closed.