Update: The World Bank’s forecasts are also now out, summarized here. Russia is forecasted to hurtle into a deep recession.
Two chapters from the World Bank’s Global Economic Prospects are out.
The December Employment Release
The JEC Chair Brady (R) writes: “While the unemployment rate has fallen it doesn’t tell the true story about stagnant paychecks and Americans struggling to find full-time work.” He then calls for passage of Keystone-XL as part of the remedy.
Demand factors in the collapse of oil prices
The price of oil passed another milestone last week, falling below $50 a barrel, a level that I had not expected to see again in my lifetime.
An Economic Warning?
In today’s NY Times, Peter Eavis writes about the message in “soaring bond prices”:
…a huge bond market with a strong track record for predicting economic problems is flashing a warning sign right now. … The prices of Treasury bonds are rallying fiercely.
Guest Contribution: “Terms of Trade Shocks, Competitiveness and Stability: The Role of Foreign Asset Management”
Today we are fortunate to have a guest contribution written by Joshua Aizenman, Dockson Chair in Economics and International Relations. This post is based on a presentation at the Society for the Study of Emerging Markets Panel session, AEA meetings, Boston, January 3, 2015.
The Dollar’s Recent Rise in Perspective
Minimum Wage Increases in the Wake of WW II
Some people have fixated upon the near doubling of the minimum wage after WW II (one person misidentifies the date as 1948, but it’s actually 1950) as a cause of disemployment in certain groups. This may have happened; however, the increase in the minimum wage from $0.40 to $0.75 was not associated with a decrease in general employment, nor of youth unemployment.
I Think I Know Why Some Folks Thought 1946 Was One of the Best Years of Our Lives
Reader Patrick R. Sullivan keeps on talking about the post-World War II boom, and telling people to watch The Best Years of Our Lives (A fine movie, by the way). I think I know why he thinks times were great for all, if your history comes from Hollywood. Rick Stryker chimes in with the statement: “If you talk to people who were around right after WWII, as I have, you’ll find that they agree with Patrick R. Sullivan that the latter part of the 1940s was a boom.”
Addendum to “More Fantastical Pseudo Economics”
For a last bit of “Year in Review”, yet more “Facts are Stupid Things”. Patrick R. Sullivan asserts that the economy boomed once the government reduced its spending in the wake of World War II. I am going to take a “boom” as a rapid increase in economic activity. Here is a time series depiction of real GDP’s evolution, using the Valerie Ramey (UCSD) series from her 2011 QJE paper (ungated working paper version here).
The Year in Review: Even More Fantastical Pseudo Economics
To heck with facts… and the scientific method.