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.

G-20, telecommunications, saltwater v freshwater, further than Krugman

Can you name all of the members of the G-20?

The Economist has a chart of cell phone users and internet users in developing countries. Internet access via mobile networks seems like an expensive prospect to me, for Africa.I suppose it might be cheaper than any other way of accessing the internet.

Urbanomics has a pretty good summary of the econoblogosphere saltwater versus freshwater macroeconomics debates. The conclusion: saltwater seems to be winning. I wonder what percentage of economists fall into each category, and how man "moderates" there are.

Paul Rosenberg goes further than Krugman in his discussion of the problems of macroeconomics.

Say's Law, finance in macro, the elderly, and Pfizer.

Say's Law has gotten a lot of attention recently! Nick Rowe, Robert Waldmann, and David Beckworth. Poor Say, these guys are just piling on. It's not Say's fault he assumed a barter economy! DeLong even invokes Friedman.

Thoma points us to another person talking about the need to take into account financial factors in macroeconomic models. My first reaction is, "Duh," but why haven't I seen any serious attempts to do just that? I've talked about this before. Thoma also provides us with a growing list of people talking about the state of macro. Interesting stuff.

The elderly are the reason why we have a national debt, says Bruce Bartlett. That'll get some people angry. I don't think he's particularly young, either. I wonder if he's banking on the idea that most of the elderly won't be online.

Bad business articles annoy me. Pfizer pays $2.3 billion to settle a lawsuit, but that's less than three weeks of sales. It seems that the author doesn't realize that this is a lot of their sales. He may want to look into how many weeks of profit it'll be. Pfizer's first quarter profit this year was$3.7 billion. That's right, they paid out two months of profit. Ouch.

Macro debates, national debt, and media regulation

Quiggin on macro wars. Yes, another one. I find them interesting, though.

Here's a global debt clock. Neat! Check out your country's debt, and compare it to other countries.

Here are some interesting thoughts on media and regulation. I'm not sure that they authors have thoroughly thought out the implications of a corrupt government, though. That might be something that's hard to capture in traditional economic analysis, though.

Yet more thoughts on the current state of macro (pdf). Arguably, I think these may be some of the most compelling thoughts on the future of macro--Kocherlakota talks about the research of relatively young macroeconomists at top universities. I think most of the complaining has been about how "most" macroeconomists view things, and how macroeconomics has affected policy, which are more likely to reflect a slightly older brand of the field. Still, this is a great read.

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?

The state of macro, choice, Krugman, and five of the greatest equations in Economics

People have been talking about the state of macro for quite some time now. The recent crisis just underline the importance of the discussion.

Chris Blattman points us to an article that talks about inconsistency in choice.

It seems like Krugman inspires a lot of anger sometimes.

Tim Haab tells us about the five greatest equations in Economics (in his opinion). I think this might be more difficult for macro.

Tires, Nobel Prize, macro debates, and solar cells.

Garth Brazelton defends the tire tax as a Pigouvian tax. I'd be interested to see if there was any data to show that Chinese tires are significantly less safe than American tires. Since they both presumably have to meet some sort of standard, should we just make tougher standards? If Chinese tires are less safe than American tires, would the tax not apply to safe Chinese tires, or would the tax be repealed when Chinese tire makers improved their tires?

Tyler Cowen starts thinking about the Nobel Prize for Economics. I'm eager to see everyone's thoughts.

Krugman talks about freshwater economists while David Warsh says there isn't as much vitriol as we might think. Warsh links us to an interesting paper that thinks about 1978 macro (link to Thoma).

Solar energy is apparently getting off to a slow start. Overinvestment due to a subsidy combined with a recession led to dropping prices, whic wasn't good for the industry. Does that mean we'll see solar energy picking up again as the world recovers? I've been seeing more articles about solar-powered things anyways, so maybe China is picking up a large degree of the slack from Spain.

Macroeconomics, taxes, and auto insurance

Keeping you up-to-date on some of the interesting things around the econoblogosphere.

Another article jumping on the macro-bashing bandwagon. I'd like to see more people offer solutions, or at least helpful criticism. Menzie Chinn offers his insight.

The Wall Street Journal seems to think that executives should pay more in payroll taxes. That's refreshing.

When we're worried about our economic situation, we're willing to try more innovative ways to make society more efficient. Pay-as-you-go auto insurance sure sounds efficient, though people are worried about privacy issues. Presumably, someone knows where you're driving? I think the privacy issue is interesting--lack of privacy might mean more safety. People are less likely to commit crimes if they know they can be easily tracked or caught. Then, people worry that more safety means less free, but I don't know why that necessarily follows.

A round on healthcare

In a piece of news that no doubt highlights the need for healthcare reform, healthcare costs are expected to jump 9% for companies in 2010. More on healthcare: an interesting note in the comments section at Angry Bear on Singapore. And, some thoughts on different plans, with links to more information, from ataxingmatter. E.J. Dionne at the Washington Post would prefer to have good rather than bipartisan reform. I was recently thinking about healthcare reform--Democrats (as well as many others, including health economists) claim that they can provide more care to more people while saving a lot of money. I'm not sure what problem the Republicans have with this. So I asked around, and the answer I got was the ideological problem against the concept of socialism. Not only does the argument not apply very well, but public investment hasn't been all that bad, historically. You'd think Republicans could back a single payer option considering all the horror stories of the current state of affairs, and the prospect of saving a lot of money.

Then again, I think it's mostly politics. Republicans can get some of what they want without giving up much political capital. On the other hand, Republicans need to get their names on some successful bills if they want to have a chance of winning back more seats in the future. If Democrats can claim to have fixed the system and saved a lot of money at the same time, what can Republicans run on?

Batteries, aid, old experiments, macroeconomics, and taxes.

Lithium ion batteries might start getting cheaper, as we may get a mass producer in the United States. Battery news excites me.

Felix Salmon wades into the developmental economics debate of the success and failure of aid, and is plugging a new book on the subject. I wonder what Easterly would say about the book.

Tim Harford talks about old experiments, and some efforts to rethink the studies.

Steve Chapman at reasononline takes on macroeconomists saying, essentially, that the field is very politicized, and this is partially a result of it being a less definite field.

Nancy Folbre thinks about why people who support raising taxes are wealthy. I think it's more about deeply ingrained ideologies. Though, it's strange that people on the lower end of the income spectrum aren't more strongly supporting their own taxes being lowered.

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.

Krugman's history, South Africa, rational markets, HDMI cable, and crime trackers

Also from Newmark's Door, Krugman gets history wrong. Both people on the left and the right disagree with him, though I think that's kind of an empty statement.

Relatively good news for HIV/AIDS in South Africa. The infection rate has leveled off, with reductions in certain age groups. Still, South Africa has 5.5 million HIV-positive people.

Justin Fox gives a quick summary of the history of rational markets in the last 80 years, which is also a summary of his books.

Ezra Klein and Tyler Cowen seem to think that some traditional brick-and-mortar stores are not lowering their prices in their competitive markets. HDMI cable seems to be very expensive in stores, but online is available for next to nothing. Klein further comments that online shopping is a wealth transfer from those not comfortable with online shopping to those who are comfortable with online shopping. It seems to me that those comfortable with online shopping are in larger, more competitive markets. Brick-and-mortar stores cater to a different demographic than online stores. Moreover, I think that particularly in the case of 80% and 90+% discounts, online stores sell excess stock or used stock, rather than stock just recently received from a manufacturer. I admit these are conjectures, though.

ThinkMarkets provides some links to crime tracking websites, and neighborhood information websites.

Finding a job, human rights, and Mish's Google talk

Barbara Kiviat tells us how we can find jobs using social networking sites. Essentially, if more people knowing you're looking for a job helps, then social networking sites get the word out quickly to a lot of people who can vouch for you. I don't usually blog on this sort of article, but I think it's interesting how technology affects the job market.

On another issue I don't usually blog about--here, particularly--the SCSU Scholars argue that a problem with poverty being called a "human right violation" is that such a claim requires identifiable violators to violate rigid laws. One violates a right, or one does not violate a right, there is no inbetween. In the case of poverty, the so-called 'poverty line' is unclear, and there are no clear violators. It's an interesting argument, but my first thoughts are that prejudice also comes in degrees (arguably, a reason that it still exists in places where we consider ourselves to have moved past that), and that institutionalized corruption is largely to blame for poverty in developing nations. Institutionalized corruption is difficult to fight, though, especially when they're, almost by definition, better financed than those who would fight.

Mish gives a talk at Google on the state of the economy. Among other things, he predicts we'll dip into another recession. I've heard some people predict a second or a third dip into recession, but I haven't heard a lot of explanation for it. I think he's off base at times, but it's an interesting talk.

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!

Wasting a recession, African aid, principles courses, housing, stock predictions, and Krugman.

Simon Johnson echoes an idea from Rahm Emanuel: Don't let a recession go to waste. The idea is, essentially, that a recession is a time where more people are willing to back big change. I'm not sure how I feel about this--I'd be happy if things changed for the better, but how do I know I can trust legislators? Should interest groups have an opportunity to push the country around, while we're down? That being said, the five points that Emanuel listed seem like good ones, and people seem to trust this administration much more than the previous one.

A FT discussion on Africa: Is Aid Working? It's an interesting discussion, and I'm of the opinion is that aid can work, but more than giving money, steps must be taken to ensure and enhance the effectiveness of aid.

Scott Beaulier relays a message from Greg Mankiw. Despite the recent events, economics principles courses won't change significantly. The groundwork that those classes lay stays the same, though graduate courses will likely see change in the fields of financial economics or public choice.

A couple on housing. Six years of housing price gains have been wiped away in three years, in real terms. CalculatedRisk has graphs on that, as well as the price-to-rent and price-to-income ratios.

And a couple (more) on the recession: Political Calculations tries to predict changes in the stock market, based on recession probabilities. It should be interesting to watch June 16-23 and September 10-16. And, Krugman is somewhat optimistic in a recent statement, as he says the world economy is stabilizing. We've avoided catastrophe! Still, he frets about the nature of the recovery. I note this isn't getting more media coverage, like Krugman's previous, less optimistic predictions.

Maternity leave, Jamaica, Zimbabwe, the world, Venezuela, and the US federal budget

The Economic Policy Institute points out that the United States is severely lacking in maternity leave benefits. I wonder how that affects our national birth rate.

I've heard a lot about problems in Jamaica recently--I was surprised, and I think this article reflects why I was surprised. Socialism doesn't work.

The IMF provides an update on Zimbabwe. As you might expect, things aren't going so well there.

Simon Johnson reminds us that the rest of the world matters, too. Since the US economy is 20-25% of world output, they have an impact on us.

Speaking of the rest of the world, there's apparently some research showing how Venezuela's Chavez has hurt his opposition. This isn't a surprise to those who have been following Venezuela, but it's nice to see the research.

Lastly, the Obama Administration takes a jab at trimming the federal budget.

Excess demand for money, manufacturing news, grid parity, and Austrian BC theory

Nick Rowe on the importance of excess demand for money. This directly relates to what the Fed has been doing for quite some time to help the current crisis. Nick has had a lot of really good posts lately, it seems to me.

Mark Perry had optimistic news on the manufacturing front. It seems like these numbers will return to normal pretty soon, which makes me think that more focus will turn towards worsening labor numbers. Though, we're only six months or so away from the peak. Six months seems like a relatively short amount of time considering how long this had dragged out already.

John Quiggin reports that some solar power companies may be approaching grid parity, or the point where solar power is as cheap as conventional power.

Another good post from John Quiggin, he talks a little about the history of the Austrian Business Cycle, and why it isn't really taken seriously anymore by more empirical-minded economists.

Development, crowding out, NewDeal2.0, economic terminology, and China,

Here's a nice story about a UCLA grad student making a difference in the world.

The Skeptical Optimist points out that the "crowding out" theory is bunk.

Here's an interesting website providing commentary from political scientists, economists, historians, and more. NewDeal2.0.

Uwe Reinhardt tells writes an article mostly directed at economists, I think. Some our terminology shouldn't is misleading when used in public discourse. We should be careful in using it, and others should take it with a grain of salt.

Is the Chinese economic model more effecting than the US economic model? Uh, no. Despite China's growth, models show pretty clearly that underdeveloped economies will tend to have higher growth rates than developed economies. This isn't a function of types of economic systems.

Fuel efficiency, forecasts, gendered lob losses, April economic summary, and GDP growth rates

Fuel efficiency raises demand, not lower it. Efficiency lowers cost, which raises demand in the long run. I keep thinking that the short run effect should be modeled as a rise in supply, but the narrative doesn't quite fit.

Simeon Djankov says not to pay attention to the forecasts. They lag behind the news, and are thusly not worth much.

Job losses for different genders. Men have lost many more jobs than women, net. Women seem to have more recessioon-proof jobs.

April economic summary in graphs. It seems to me that most of them tell a similar story.

GDP growth rates for beginners. This is really a well-written and easy to understand post, I think.