Recession, tax revenue, the Economist, and Monopoly.

Glenn Rudebusch, at the FRB San Francisco, answers five key questions. The financial crisis is over. The recession is most likely over. We won't return to normal employment for some time. Inflation will not be too high. The Fed has an exit strategy to undo its recession-fighting policy actions.

Federal revenue as a share of GDP is at its lowest point since 1950. It's an interesting graph, and I want to see how the percentage federal revenue has fluctuated with GDP growth and also with the change in tax rates. The top tax rate was slashed a lot in the 60s, but you don't see much of a change.

The Economist's forecast. No big surprises, I think. Still, an interesting read. I might expect a slower increase of the federal funds rate than they do, though.

Free Exchange on the history of Monopoly, Anti-Monopoly, and Hasbro.

EIA, map of job losses, new wave of research, and Caterpillar

Env-econ re: BCA vs EIA, OK?

This is a very interesting map of job losses and gains around the country since 2004. It'd be nice if it showed percentage loss/gain rather than net, but it's still illuminating, I think.

Will Google Wave change how research is done?

Caterpillar sees "encouraging signs" of economic recovery. The construction industry, many say, is a pretty good leading indicator.

Dr. Doom/Roubini, public health care, mancession, and Cash for Clunkers.

Dr. Doom's at it again. I don't share his opinion about the growth "since March." I think the bottom was a bit too low, and at least some of the later stock growth was corrective.

The Boston Globe explains how a public health care option would work in pretty easy terms.

Free Exchange picks up Chris Swann, saying that men aren't necessarily the hardest hit during this recession.

The FRB Cleveland shows us some of the effects of the Cash for Clunkers program. I'd like to see their numbers on slightly longer-term effects.

Recession, employment, risk modelling, and multipliers

The IMF says that things aren't so bad anymore! They're seemingly less bad than previously thought. They credit monetary and fiscal policy, apparently (I wonder how that'll go in the macro debates?). Feel free to check out the video of the press conference and the actual report.

Robert Reich makes sure we know what the employment numbers really mean.

The Baseline Scenario tells us about the problems of risk modelling. VaR = bad? I think people are being too harsh, though a company shouldn't use one model and nothing else to evaluate risk.

Via Thoma, Krugman talks about multipliers. He says 1.5 is a good estimate for right now.

Journalists, macro, twitter, and the housing bubble

The market for journalists. I think this has gotten a lot of publicity lately, with newspapers closing down.

Micro-based macro led us astray says John Quiggin. I think it's kind of an extreme statement, though. Macroeconomists have to have many tools, one of which is handy use of micro.

100 best business twitter feeds. For all of you tweeps who like to keep up with business/finance/economics stuff.

When did the housing bubble begin? I think a lot of people agree that low interest rates were a large cause, regardless.

Inflation, modern macro, monetary policy, and wages

Inflation is low, but still positive. There have been a number of forecasts saying that inflation will stay low for some time--seems like Austrian economists haven't been listening, though.

Robert Waldmann on modern macro.

Sumner on monetary policy. Could the Fed have acted better? Sumner is sometimes wordy, but always worth a read.

A bit on wages from the San Francisco Fed. Wage growth has been stagnating. Hopefully the rise in productivity will turn that around?

Bailout money, underwear, and good news.

Banks are paying back bailout money, with interest. Sounds like it was a pretty good deal!

Another strange economic indicator: underwear. The worse times are (and, presumably, the less money you have), the more willing you are to wear tattered underclothing. Who's gonna see? Also, people attempt to cut their own hair (with hilarious results).

Some regions are seeing potential growth! Seems a little early to be sure, though. Building contracts are up in the Houston area.

There is now increased productivity. Not a surprise, really. When firms lay people off or slow hiring (as they have been doing), they presumably hold on to more productive people in order to achieve this very effect--higher productivity at proportionally lower costs. This goes hand-in-hand with higher profits, which leads to all sorts of benefits in the economy. Yet another sign that we're in recovery mode.

Solar power, education, inflation, and majors

China is really pushing the production of solar panels. Siemens has also invested a lot of money into solar power recently. I've heard people say that oil prices will only go up in the long term, but I wonder if energy prices will actually go down.

Some people talk about why the price of upper education has risen.

As the economy bottoms out, we look more towards inflation. With slow growth, I don't expect inflation to get out of control, though even if that were the case it seems to be a necessary condition for growth in this recovery period.

College students fret about their majors. I thought this has always been a problem for them, especially for liberal arts people.

Subprime mortgages, the end of the recession, FDI, and health care

The Cleveland Fed presents us with ten myths about subprime mortgages.

Mark Thoma tells us when we'll know that the recession is over. I think there are two important themes: 1) it's tough to tell, and 2) it'll be pretty obvious when it's there.

Foreign investment in long-term US bonds are up. Although China is pulling out some of its money, the scare that everyone wants to pull out their money and ruin the US is unfounded. Sometimes, economics is telling people the obvious, when they want to believe the ludicrous.

The public health care option may be off the table. Back to high health care expenditures? Have congressional Republicans attempted to make any concessions at all? Bipartisanship seems to imply compromise.

Good news on the recession, sugar, bubbles, and new homes.

A few pieces from Capital Gains and Games. Some thoughts on the unemployment numbers--getting worse slower isn't getting better. Still, I prefer getting worse slower. Still, the prospect that the unemployment rate won't hit 10% is great. The deficit would have been the same under Bush (or McCain) and is likely going to be less than originally forecast. So, it was largely unavoidable. Still, I hope that our money was put to good use.

A reduction in the supply of sugar is causing prices to increase. If there are profits to be made, then we'd expect other firms enter the market. Good sign for South American and African sugar farmers?

The Business Pundit speculates at the next possible bubble to burst. Gold seems a little far fetched to me, as I always thought of gold as a back-up place to store wealth, which means that it'd be more of an effect than a cause of speculation.

Felix Salmon reminds us that a home is not an investment as Krugman buys a new place. I've seen it argued that people thinking of homes as investments is a part of what caused the housing crisis.

Healthcare, good income news, good recession news, and blips.

Chris Dillow looks at the relationship between health care spending as a percentage of GDP and life expectancy. It's not the whole story, of course, but it does start an interesting discussion.

Real average hourly earnings is up a lot. Presumably, firms are holding on to qualified workers. We'll see how this measure holds out against the unemployment rate.

The chances of positive GDP growth are up! According to a Philly Fed survey. It's been a long recession.

Capacity utilization has a small up-blip, and industrial production is up. This, honestly, doesn't tell us much. If it continues up, that's a good sign, but this increase is probably too small to indicate anything.

Unemployment rate <10%, income distribution, IV, the recession's end, and unemployment again

Nate Silver makes the claim that the unemployment rate won't hit 10%. Bold, considering there are many expecting it to go well above 10%.

People in the top .01% have 6% of the nation's income, the highest ever. It's interesting how it was so low for so long.

The Economist has an interesting article on instrumental variables. The gist: they attain more accurate answers to less broad questions. Instrumental variables are tools, however. We should never rely on one tool in our toolbox--that has always led us astray. That's just like articles bashing macroeconomics due to "bad" econometric forecasting.

According to this graph, a lot of economists seem to think that the recession is over. That's the WSJ, though, so take that with a grain of salt. The more interesting part, in my opinion, is that the unemployment predictions, on average, don't hit 10%. More predictions here.

Taxes and unemployment, the recession, health care, income, and advertising.

Krugman reports that there is no correlation between taxes and the unemployment rate. Looks like, if anything, there might be a negative correlation.

Though the specifics vary slightly, things are looking a little better now for Krugman and Hamilton.

Health care is a pretty tough issue, politically.

Political Calculations has data on how your income will increase each year.

Karl Smith continues discussion on the advertising industry. I think he's wrong when he says that people aren't easily swayed--though, they may not be so easily swayed as advertisers may think. I think people can be swayed to at least try a new cereal, even if it costs 20 cents more. They may not be swayed in buying a car. When you're talking about relatively cheap, quickly consumed goods, advertising can be powerful. Advertising may actually convince us to try a new restaurant, or a new brand of deodorant.

Oil and gas prices, health care, university productivity, and Houston power rates

James Hamilton takes a look at oil and natural gas prices. Something has got to give.

PBS has a Frontline report comparing the health programs in five capitalist democracies around the world. Paul Krugman explains why health care can't be solved by the free market. Seems to me that health insurance suffers the tragedy of the commons.

Catherine Rampell at Economix reports on a measure of productivity of universities.

Houstonians: TXU is lowering their rates. They may still not be the lowest for you, but keep an eye out! How's that for price fluctuation?

Some news on the recession

Ritholtz on Feldstein's double-dip warning. Mark Perry has some good news. The Chicago Fed Index and the Confence Board's index are both up. Double dip or slow, long recovery? We have to wait and see. The way to see it, as long as housing continues to get better, and credit markets recover, I don't see how a double-dip is likely. Employment may double-dip, if they're decide that holding on to excess qualified workers will take too long to pay off.

Houston median home prices reach a record high.

Here's a look at the state-by-state change in per capita income. We're down, overall, but some states are doing okay!

Drea, at the Business Pundit, shows us five industries doing well during the recession.

Healthcare, financial crisis, stimulus, and jobs.

Instead of the UK and Canada, Jonathan Cohn compares our future healthcare system to France and the Netherlands--whose plans he says is actually more similar to our proposed plans. It's a worthwhile read, I think.

Justin Fox points to an investment banker who says that the fault of the financial crisis should fall onto the people who bought toxic assets, not the people who created them. They should never believe that you can make a return on a riskless security. I still think there were many people at fault--after all, the true risk was not properly assessed by ratings agencies.

The French think they've done fiscal stimulus better than the Americans. Could be. Certainly, our more "free" system carries with it more risk and uncertainty. It's harder to get effective government action done here.

Catherine Rampell at Economix points out that the problem with the job market is a hiring slowdown, not layoffs.

Finance, Scrabble, and productivity

Free Exchange challenges a Dean Baker statement in which Baker essentially claims that the current economic situation is due more in part to the housing bubble rather than the financial sector. Free Exchange points out that the two are tied together. In that vein, Mark Thoma quotes Krugman as saying that we need to get rid of so-called shadow banking.

On a lighter note, Jeff Ely applies auctions to Scrabble with interesting results.

Robert Waldeman hypothesizes that, in the 90s and naughts, the productivity increases were due to downsizing. It's an interesting idea--and quite possibly some of the story--but I think that, at best, it works in tandem with the standard theory. Who ever said that there could only be one reason for productivity increases in the 90s?

Graphs, Krugman/DeLong, inflation, and psychology

The recession in graphs. Felix Salmon points us to a bunch of graphs comparing the current recession to previous recessions. It's nice to see all of these together.

Krugman thinks about some notes from DeLong. I think they're interesting reads, though a bit rough.

The Fed is not concerned about falling inflation due to too much slack in production. This seems like a very AD/AS argument, and one that supports the idea of a prolonged recovery. I wonder what they think about the possibility of dipping into another recession.

There's an argument for psychology to be as accurate a science as medicine. I can't say I'm surprised, though I think psychology gets a bad rap. The story here is that psychological correlation coefficients were considered weak, when values of .3 were given, when this is actually a stronger value than "good" values in medical experimentation.

Clintonomics, macroeconomics, market research, and my search engine

An interview with Bill Clinton was too long, so the section on the economy was cut. Economix has it. It's pretty interesting to see Clinton's take on the situation, and he addresses the different arguments pretty well. Many have remarked that not only is this an interesting read, but it's also strange to hear an ex-president critique himself.

Matthew Yglesias continues the discussion of what's wrong with macroeconomics, mentioning that model which don't contain micro foundations are not considered. The microeconomic foundations provide a lot of useful ways to think about macroeconomics, I think, such that it seems logical that there should be a strong relationship between the two.

Rosengren, the head of the FRB-Boston, is calling for more research in markets, and their relationships to the economy as a whole. He points out that regardless of predicting the crisis, once the crisis was upon us, many forecasters mispredicted the size and length of the recession. This recession was of a different nature of those in the past, and we need to understand it better.

Oh, and I put together a custom Google search of economics blogs, with a few foreign policy ones thrown in. Not only is it accessible at that link, but it's also on my sidebar here now. Enjoy!

Michigan, foreign policy, Varian and Google, and food prices.

Might business be okay in Michigan? The Grand Rapids Press reports good news in Michigan for a machinery/furniture company, an AHL team, an advertising company, and a construction company. Michigan isn't all about cars--maybe some of those displaced auto workers will be able to find other work.

Obama makes the country a safer place, says National Security Advisor James Jones. New strategies in Afghanistan and Pakistan, as well as strategically pulling troops out of Iraq are good policies, he reports, as opposed to Guantanamo, which created more enemies than were detained. He also says that North Korea isn't an immediate threat, and that Obama's "team of rivals" is working out well so far, with everyone being heard.

Wired highlights Varian and Google auctions. I've heard a lot about these auctions in the past year or two--maybe the idea is spreading? Hal Varian certainly has a cool job.

David Leonhardt shows us price changes in certain foods over time. Looks like healthy foods are getting relatively more expensive (though, fish and meat is doing okay!).