From a VoxEU column today, by me and Joshua Aizenman:
Might more inflation be good for the US and Europe? This column looks at the housing market in the US and argues that, with houses dropping in price, buyers are playing a waiting game. And as buyers keep delaying, the price drops further. Given the importance of property in many economies, the knock-on effects are severe. Yet one way to break this vicious cycle is with inflation.
Downward, and downwardly revised.
For some time, financial observers have been discussing the large positions in bond-index derivatives amassed by a trader known as the London Whale, now revealed to be Bruno Iksil working for JP Morgan Chase.
On Thursday we learned that JP Morgan has lost over $2 billion in the space of two weeks as a result of the trades. On Friday the stock price fell by 9.3%, wiping out $14.4 billion of the company’s value.
From Milwaukee Journal Sentinel All Politics Blog:
Gov. Scott Walker recommitted Saturday to his pledge to create 250,000 private-sector jobs by 2015, a promise all the more difficult to achieve since he first made it because of anemic job growth during his tenure.
From Milwaukee Sentinel Journal:
A filmmaker released a video Thursday that shows Gov. Scott Walker saying he would use “divide and conquer” as a strategy against unions.
Or, I know columnists have deadlines, but really…
In Tuesday’s NYT column, entitled “The Structural Revolution”, David Brooks writes:
Back in January, Jeffry Frieden and I argued for higher inflation, conditioned on macro conditions, in a Foreign Policy article. The roster of economists in favor expands: Nobel laureates Rob Engle and Paul Krugman join Chicago Fed President Charles Evans, for the US.
Ignorance is bliss edition.
From BusinessWeek:
[The Census Bureau, BEA and BLS] have always had to fight for more funding. Now they may have to fight just to keep their budgets intact. As part of $19 billion in nondefense discretionary cuts in Paul Ryan’s (R-Wis.) budget—recently passed by the House of Representatives—the agencies are likely to get less funding.
From the responses to my remarks last week on monetary policy, I see that my words were interpreted by some readers differently than I’d intended, for which I apologize. Let me try again.
Governor Romney has said that 500,000 is the monthly job creation he expects as normal during a recovery [1]. It actually last happened in May 2010 but is otherwise pretty rare. Reader Rick Stryker argues that the 500K should be expressed in percentage terms, accounting for the size of employment. Nonetheless, breaching the equivalent in percentage terms never happened during the eight years of the G.W. Bush administrations.