World field production of crude oil increased 2.9 million barrels a day in the 12 months ended last July. That compares with a 3.6 mb/d increase over the entire nine years from Jan 2005 to Dec 2013.
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Wisconsin Private Employment: “highest one-month jump since 1992”
That’s the headline on this afternoon’s release from the Wisconsin Department of Workforce Development. While completely accurate, the summary leaves a just a little context out…
Closing the Output Gap
…very slowly
The Wisconsin Economy since the Last Peak
Compared against Minnesota, Kansas, California, and the Nation
Potential GDP, Again
There are various ways of estimating potential output. I typically refer to the CBO’s estimates, which are basically a production function approach (use trend labor and capital stock, and total factor productivity growth, to infer potential output). However, An alternative is to examine price pressures to infer potential output, as in Ball and Mankiw (JEP, 2002).
“…inflation expectations can change quickly”
One of the arguments for acting sooner rather than later on monetary policy is that if the slack disappears, inflationary expectations will surge. That’s represented in this quote from reader Peak Trader’s comment. While I don’t rule out this possibility, it seems reasonable to me to empirically assess whether this is true for the United States over the past thirty years.
What the Taylor Rule(s) Say(s)
The St. Louis Fed has a handy webpage where it shows the Taylor-rule implied Fed funds target rate given measures of the output and inflation gaps, and the natural real rate of interest. Here’s recent snapshot I downloaded for my classes.
Preparing for lift-off
The strong October employment report makes it look likely that the era of zero interest rates will soon come to an end, at least for the United States.
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Employment in the Recoveries
Despite the depth of the last recession, private nonfarm payroll employment is now higher than the corresponding point in the last recovery.
Today’s Employment News and Asset Prices
Just an observation regarding the impact of the employment “news” (see [CR]) and inferred expectations of a rate hike in December, and the announcement effect on the dollar’s value.