Category Archives: Uncategorized

Negative interest rates

For an economy with underutilized resources or too low a rate of inflation the traditional prescription for monetary policy is to lower the interest rate. Central banks around the world tried to do that in response to stubbornly weak economies, bringing the overnight interest rate in many countries all the way to zero. But when that didn’t seem to be getting the job done, the Bank of Japan last week decided to go negative, charging banks 0.1% interest for excess reserves. With this step Japan now joins the Euro system, Switzerland, Denmark, and Sweden, all of whom have had negative interest rate policies in place for over a year. Here I describe how negative interest rates work, what they are intended to accomplish, and some of the limitations of using this policy to try to stimulate the economy.
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Mass Shooting Casualties Trending Up (Again)

massshoot1

Figure 1: 12 month moving average of mass shooting casualties; deaths (dark red), wounded (pink). Source: Mother Jones, GunViolenceArchive.org. for January 2016, and author’s calculations.

Update, 2/5 1:45PM Pacific: Title amended to address m4570d0n‘s pedantic comment.

Update, 2/6, 10:30AM Pacific: Reader joe argues per capita figures would be more intuitively accessible. Here is the relevant graph.

massshoot_pc

Figure 2: 12 month moving average of mass shooting casualties per million; deaths (dark red), wounded (pink). Source: Mother Jones, GunViolenceArchive.org. for January 2016, and author’s calculations.

Note: Mother Jones used a 4 death threshold for definition of mass shooting; I have used that criterion for tabulating January 2016 numbers.

Managing the Fed’s balance sheet

Last week I discussed the tools that the Federal Reserve will be using to raise short-term interest rates as we enter the next phase of U.S. monetary policy. In brief, the Fed plans to use interest on reserves and reverse repurchase agreements as an offer to borrow back Federal Reserve deposits at an annual rate between 25 and 50 basis points (0.25% to 0.50% interest per year). That offer from the Fed puts an effective floor under the fed funds rate, which is the rate at which institutions would lend these funds overnight to other banks. When the Fed raises its offering rate, the fed funds rate should go up with it. Today I look at the implications of these new procedures for the Fed’s balance sheet.
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Mass Shooting Casualties, by Religion of Perpetrator: Muslim vs. Non-Muslim

Update, 6/12/2016, 4:15PM Pacific:

Here are two figures, with data updated to 6/12.

massshoot_m2

Figure 0a: 12 month moving average of mass shooting casualties; deaths inflicted by non-Muslims (dark red), wounded inflicted by non-Muslims (pink), deaths inflicted by Muslims (dark blue), wounded inflicted by Muslims (light blue). June observation for data through June 12. Source: Mother Jones, news reports for June 2016 and author’s calculations. Tabulations of religion of perpetrator by author.

massshoot_m2_cuma

Figure 0b: Cumulative sum of mass shooting casualties, beginning in 1982M08; deaths inflicted by non-Muslims (dark red), wounded inflicted by non-Muslims (pink), deaths inflicted by Muslims (dark blue), wounded inflicted by Muslims (light blue). June observation for data through June 12. Source: Mother Jones, news reports for June 2016 and author’s calculations. Tabulations of religion of perpetrator by author.

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