Here’s an excellent piece by Ben Leubsdorf on how the Phillip’s curve–long a workhorse of macro-policy–is not much help these days in trying to quantify the relationship between slack and inflation. From the piece: In an influential 1958 paper, [A. W. Phillips (a Kiwi, btw!–JB)] hypothesized that employers will bid up wages when workers are scarce,… Read more
Something odd is happening in the U.S. job market. The rate of unemployment is falling, and doing so pretty quickly (see first figure), to levels approaching the Federal Reserve’s estimate of full employment. That is, the Fed says full employment corresponds to a jobless rate of 5.1 percent and the unemployment rate last month clocked… Read more
I recently posted a “letter to the Fed” wherein I questioned the rationale for raising interest rates given a variety of economic developments that I argued offer no compelling reasons to tap the brakes on growth. Here’s a point I made in that post, regarding GDP growth: “the current economy is like a slow runner… Read more
Over at PostEverything, with some pretty striking graphics.
7/31/15 Dear Chair Yellen, First, you’re one of my heroes, and not just because of how much I’ve learned from your economic analysis over the years, but also because my daughters are growing up in a world where the world’s chief economist is the same gender they are. Second, I just don’t get what seems… Read more