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BlogJanuary Employment Report: Broader Effects of Seasonal Adjustment
(Click figure to enlarge.) Two Fridays ago, I blogged about some newly released Bureau of Labor Statistics (BLS) data from a monthly household survey. I was surprised later to see that Multiplier Effect was one of only a handful of websites to mention that non-seasonally adjusted data showed vastly different and perhaps more disturbing results [...] -
Blog
Mortgage Morass
The White House remedies for the mortgage meltdown have now been presented. Congress will debate the life extension, death, or rebirth of federal mortgage entities Fannie Mae and Freddie Mac during the coming weeks. When the noise has died down, don’t expect substantial change. But those who hope for genuine financial reform should, nonetheless, listen [...] -
One-Pager No. 8It’s Time to Rein In the Fed
The economic crisis that has gripped the US economy since 2007 has highlighted Congress’s limited oversight of the Federal Reserve, and the limited transparency of the Fed’s actions. And since a Fed promise is ultimately a Treasury promise that carries the full faith and credit of the US government, the question is, Should the Fed […] -
Working Paper No. 651Unit Labor Costs in the Eurozone
Current discussions about the need to reduce unit labor costs (especially through a significant reduction in nominal wages) in some countries of the eurozone (in particular, Greece, Ireland, Italy, Portugal, and Spain) to exit the crisis may not be a panacea. First, historically, there is no relationship between the growth of unit labor costs and […] -
Working Paper No. 651
Το μοναδιαίο κόστος εργασίας στην ευρωζώνη
Οι τρέχουσες εισηγήσεις σχετικά με την ανάγκη να μειωθεί το μοναδιαίο κόστος εργασίας (κυρίως μέσω δραστικών μειώσεων των ονομαστικών μισθών) σε ορισμένες χώρες της ευρωζώνης (ειδικότερα στην Ελλάδα, την Ιρλανδία, την Ιταλία, την Πορτογαλία και την Ισπανία) προκειμένου να βγουν από την κρίση οι εν λόγω χώρες μπορεί να μην είναι πανάκεια. Κατ\’ αρχάς, ιστορικά, […] -
Policy Notes No. 1What Happens if Germany Exits the Euro?
Like marriage, membership in the eurozone is supposed to be a lifetime commitment, “for better or for worse.” But as we know, divorce does occur, even if the marriage was entered into with the best of intentions. And the recent turmoil in Europe has given rise to the idea that the euro itself might also be reversible, and that […] -
Blog
Seasonal Adjustments Roughly Account for Reported Drop in Unemployment Rate
In Friday’s post, I pointed out that unemployment and employment numbers announced by the BLS had apparently been changed greatly by the process of adjusting for typical seasonal changes. These adjustments are meant to account, for example, for the fact that retail business is generally stronger than usual during the holiday season at the end of each [...] -
Blog
Beneath the Surface, Some Disappointing Unemployment Data
A note on the unemployment figures released earlier this morning by the Bureau of Labor Statistics (BLS), reporting the results of a January survey of U.S. households: The seasonally adjusted unemployment rate fell from 9.4 percent in December to 9.0 percent last month, a healthy improvement. On the other hand, before seasonal adjustment, the unemployment [...] -
Blog
A New Peek at the Secrets of the Fed?
In December, the Levy Institute issued a working paper that asked how the economy might be affected by the seemingly unusual fiscal and monetary policies implemented by the Fed and other central banks since 2008. The authors, Dimitri Papadimitriou and I, used a phrase that is not often spoken in this era by governments and central banks around the world: “monetizing the deficit.” This phrase traditionally describes the [...] -
Blog
Education, earnings and age in the Great Recession
Reading the back and forth between Brad deLong and David Leonhardt over the structural versus cyclical nature of unemployment during the Great Recession, a question nagged at me, spurred by this quote from Leonhardt: The data that the Bureau of Labor Statistics released on Thursday gives me a chance to explain why I disagree. In [...] -
Blog
Long-Term Interest Rates Brought Up to Date
Last summer, this blogger posted a graph showing the path followed by U.S. long-term interest rates since 1925. There has been some interest in a new and updated graph, especially in light of concerns that bond markets might soon demand higher yields as the economy expanded. One appears above. Reasons for apprehension about a possible [...] -
Working Paper No. 650
Fiscal Policy: Why Aggregate Demand Management Fails and What to Do about It
This paper argues for a fundamental reorientation of fiscal policy, from the current aggregate demand management model to a model that explicitly and directly targets the unemployed. Even though aggregate demand management has several important benefits in stabilizing an unstable economy, it also has a number of serious drawbacks that merit its reconsideration. The paper […]