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.

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.

The internet, market design, and Clive Granger

A recent report tries to capture the economic impact of the internet in the United States. In short, $300 billion and 3.1 million jobs. That doesn't take into account the social aspect, either, and how the internet has shaped the job market. As massive as the reported number is, it possibly understates the real impact of the internet.

In a similar vein to a past article on Varian, David Warsh thinks about economic engineers in the field of game theory and market design. The boom of auction theory combined with the economic impact of the internet makes for a large impact of relatively recent economics. There are a lot of really interesting examples of market design in the real world, and I think more recent events will only serve to highlight practical and empirical applications of economics.

I apparently recently missed the death of econometrics giant Clive Granger.