If you’d thought the recovery was in full swing, think again. Wisconsin nonfarm payroll employment has stabilized at a level down 5.6% relative to NBER peak in 2020M02 (in log terms), vs. 6.4% for the nation overall (according to figures released by DWD today).
Thus Confirming Everything I Thought about Both The Independent Institute and Judy Shelton
Popping into my email inbox today, a press release titled:
Renowned Economist and Author Judy L. Shelton Joins the Independent Institute as Senior Fellow
Measuring the Informal Sector
Some methods for estimating the informal sector, and characterizing the cyclical behavior thereof, from Ceyhun Elgin, Ayhan Kose, Franziska Ohnsorge, and Shu Yu (2019).
Proxy Measures for the Cyclical Component of GDP
The output gap is a key concept in macro. Students in my courses have asked about the characteristics of some of the proxies. Here are some representative examples.
Some Strange Things about Inflation Expectations
I was interviewed for a Markeplace piece on some of the strange beliefs people have about how the government measures inflation.
One of the tangental points I mentioned to the reporter (it didn’t make into the article) is household inflation expectations are consistently upwardly biased (by about a percentage point). This is shown in the below graph with ex post inflation (black) against forecasted from Survey of Professional Forecasters (blue) and Michigan (red).
Macroeconomic Competitiveness
Competitiveness is often appealed to in popular discourse, but seldom defined. In macroeconomics, competitiveness is usually interpreted as cost competitiveness. Chinn and Johnston (JPAM, 1994) discuss the topic at length. Here is the OECD’s measure of cost competitiveness since 1999, along with the Fed’s CPI deflated measure of the dollar against a broad basket of currencies.
Some Statistics and Thoughts Regarding Causality
Consider the incidence of hate crimes directed against Asian-Americans/Pacific-Islanders as reported to the FBI.
CPI: Growth Rate vs. Level
Headline CPI inflation is up. But the level matters.
The American Rescue Plan – GDP Impact Assessed
Goldman Sachs (Phillips/Briggs/Mericle, 3/13) document some aspects of the American Rescue Plan, signed into law by President Biden.
Inflation Expectations, Post-Passage of the American Rescue Plan
At the end of the week, the five year constant maturity Treasury yield continued to rise along with the implied expected inflation rate; but after accounting for the estimated term premium and liquidity premium (h/t Bob), the increase in the latter since the Georgia elections is much more modest.