Wednesday , August 21 2019
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Tag Archives: Uncategorized

The stock market is not the economy : Taking a “random walk” through the data

[embedded content] Does the stock market tell us anything about the economy? The stock market seems to react continually to various data and economic news, and many of us follow its day-to-day changes, especially if we’re invested in it. But do fluctuations in the stock market actually reflect economic health? The best measure we have for measuring total economic activity is GDP. But GDP is measured only quarterly and with a considerable lag. With the help of FRED, though, we can look...

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Paychecks at the top, at the bottom, and in the middle : A look at the distribution of wage income

[embedded content] Let’s consider the topic of income disparity by looking at some data from our friends at the Bureau of Labor Statistics—or, as we like to call them, the BLS. (Just to clarify: Top incomes are increasing more than others not so much because of regular labor income, but largely because of capital income, various bonuses, and the like. That said, in this post we’ll stick with the distribution of regular wage income.) The BLS’s Current Population Survey provides weekly...

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Dismantling and devolving the pernicious union

In recent blog posts, I have been advancing ideas that respond to the frightending dysfunction in the UK polity. 1.  Separation of Northern Ireland, Scotland, and Wales into individual, independent countries embedded into the EU, and England levered to tether itself as a non member in name only, or rejoining at some point. 2.  Membership of the euro and aspects of the ‘ever closer political union’ that the UK has thus far been exempted from. Using the same logic, regional devolution...

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Brexit: the mutually inconsistent views of the desirable anchor and the stormy constitutional sea

One feature of Brexit from the perspective of those who see political and economic benefits to remaining a member of the EU is that there is no safe, perpetual compromise position. There are soft versions of Brexit in which almost all the economic benefits of membership are reaped [for example by remaining in the single market and customs union].  But once we leave it becomes much easier to take further steps away from the EU, and the UK’s economic trading relations, regulatory...

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The give and take of technology : Changes in U.S. imports and exports of intellectual property

[embedded content] The U.S. creates many technological innovations that the rest of the world wants to use. The FRED graph above tracks how much technology the U.S. exported to the rest of the world from 2002 to 2018 (blue line), as measured by payments the world made for the use of U.S. intellectual property (IP). These payments, in the form of royalties and licensing fees, increased from $67 billion to about $118 billion, showing that the U.S. has substantially increased the knowledge...

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Asymmetric radicalization of Leavers and [most other] Remainers

A striking feature of the post Referendum period is the radicalization of Leavers.   Amongst leading protagonists, many supported remaining in the EU’s single market during the campaign.  Subsequently, the focus shifted towards leaving the single market and customs union in order to fulfil a revised definition of true Brexit by enabling an independent trade policy.  Now, control of the Governing party rests with a faction that openly embraces leaving the European Union without a deal,...

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The changing calculus of Scottish Independence

Much was made of the first poll in favour of Scottish independence.  The calculus is changing.  I would argue that for a variety of reasons, independence is now more attractive. Relative to 2014, the first benefit is removing Scotland from the influence of two polar opposite, but pernicious political offerings, from Labour and the Tories.  During the 2014 referendum, major parties in the UK all pretty much lived within the rules of acceptable discourse, and were led by groups with...

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Capital’s gain is lately labour’s loss : The global decline in the labour share of income

[embedded content] The GDP of a country reflects, among other things, the total payments to all factors of production. For a long time, the share of payments to labour* relative to total payments to all factors of production was relatively stable. In recent decades, the share of payments to labour has been trending down in many countries, which FRED can help us illustrate. The first graph shows that the share of labour compensation in GDP has been declining for several countries around...

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Lewis Goodall’s ‘Remainers are rubbish’ conclusion.

Lewis Goodall, Political Correspondent for Sky, wrote a thread on Twitter today concluding with a familiar line that Remainers are not good at politics.  They ‘may as well pack up and go home’.  They are ’embarrassingly bad at politics’.   The mental connection made is with the commentary that first began in the aftermath of the Referendum victory for Leave by recalling the spectacle of a babble of liberal economists talking conditional forecasts on the one hand, and Leave posters with...

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Live by the barrel, die by the barrel : Connections between oil production, oil dependency, and economic growth

[embedded content] In every introductory macroeconomics course, oil is used as the classic example of a negative price shock. Professors tend to discuss the 1973 oil price shock triggered by the Arab-Israeli conflict and the 1979 oil price shock caused by the Iranian Revolution as reasons for rising inflation and falling global output—connecting these shocks to models about investment and aggregate supply and demand. More recent literature, including this presentation by St. Louis Fed...

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