- Afternoon Must-Read: Narayana Kocherlakota: 'Persistently Below-Target Inflation Rate is a Signal That the U.S. Economy is Not Taking Advantage of all of its Available Resources' - Washington Center for Equitable Growth
- Nick Bunker: The shifts in household debt and the need for more data - Washington Center for Equitable Growth
- Nick Bunker: Weekend reading - Washington Center for Equitable Growth
- Over at Grasping Reality: Alexander Hamilton at the Constitutional Convention: Weekend Reading - Washington Center for Equitable Growth
- Just What Is Europe's Economic Destiny?: (Late) Friday Focus for August 15, 2014 - Washington Center for Equitable Growth
- Money, Prices, and Coordination Failures: (Late) Thursday Focus for August 14, 2014 - Washington Center for Equitable Growth
- Morning Must-Read: Noah Smith: Silicon Valley Can Solve the Big Problems - Washington Center for Equitable Growth
- Afternoon Must-Read: Josh Lehner: Squaring Fed Policy - Washington Center for Equitable Growth
- Evening Must-Read: Alan Blinder and Mark Watson: Presidents and the U.S. Economy: An Econometric Exploration - Washington Center for Equitable Growth
Must- and Shall-Reads:
Narayana Kocherlakota: "Congress has charged the FOMC with making monetary policy so as to promote price stability and maximum employment....Let me start with price stability. The FOMC has translated the price stability objective into an inflation rate goal of 2 percent per year. This inflation rate target refers to the personal consumption expenditures, or PCE, price index... [which] currently stands at 1.6 percent.... In fact, the inflation rate has averaged 1.6 percent since the start of the recession six and a half years ago, and inflation is expected to remain low for some time.... The second FOMC goal is to promote maximum employment.... Progress in the decline of the unemployment rate masks continued weakness in labor markets.... A persistently below-target inflation rate is a signal that the U.S. economy is not taking advantage of all of its available resources.... There are many people in this country who want to work more hours, and our society is deprived of their production..."
Noah Smith: Silicon Valley Can Solve the Big Problems: "I am annoyed when writers accuse Silicon Valley (by which they mean the entire tech industry) of not solving big problems. Presumably, these tech critics want venture capitalists and entrepreneurs to take us into space, solve the global energy crunch or invent new labor-saving devices. And presumably they aren't satisfied that SpaceX, Tesla, SolarCity, and the Google Self-Driving Car project, among others, are working.... What critics of Silicon Valley’s vision fail to realize, though, is that the really big problems aren't the hard ones or the spectacular ones. The really big problems are things that affect the quality of human life.... The problems of this higher rung of Maslow’s ladder are exactly the ones that tech companies like Facebook and Match.com have begun to crack. Consider the impact of dating sites on the lives of divorced people. For a young person, dating sites--OKCupid or Tinder--are a marginal improvement over the old singles scene.... But for divorced middle-aged people, who are often socially isolated and occupied with work, meeting people is a much more daunting task. For these people, dating sites are a godsend.... Most of what people in the developed world want in life has to do with other human beings, not with the physical world around us. Peter Thiel, one of the founders of PayPal, famously griped that “We wanted flying cars, instead we got 140 characters.” But I guarantee you that if I had a flying car, after the first few days I would stop gawking at the scenery and start tweeting. I believe that the advent of social technology is a huge step toward solving the really big, really tough problems... connect[ing] with old friends and meet[ing] romantic partners.... Mars is just a ball of rock and ice. Here on Earth, there are much vaster worlds to explore: the worlds in other people’s minds.... Those Silicon Valley nerds, with their hoodies and their silly jargon, are building us the ships to explore those universes, and in the process changing what it means to live a full and complete human life. To me, that’s a big idea.
Josh Lehner: Graph of the Week: Squaring Fed Policy "The following compares the Fed’s own forecasts for nominal GDP (actually real GDP + PCE) on a 2 year ahead basis. Most forecasters, including the Fed, have performed relatively well on a 1 year ahead basis but keep calling for an improvement “next year” which has largely not materialized at the national level. Some states, such as Oregon, have seen acceleration in job growth but others have decelerated at the same time leaving U.S. growth at consistent rates...
Jeffrey Pfeffer: Ten Tips for Building Stronger Networks in Work and Life: "Face Time Counts... Find a Mutual Connection... Create a Robust Network...Be Specific... Be Diverse... Do What You Say You Will... Be Genuine... Think Long-term... Consider Your Approach... Stay in Touch and Give Back..."
Alan Blinder and Mark Watson: Presidents and the U.S. Economy: An Econometric Exploration "The U.S. economy has grown faster—and scored higher on many other macroeconomic metrics--when the President of the United States is a Democrat rather than a Republican. For many measures, including real GDP growth (on which we concentrate), the performance gap is both large and statistically significant, despite the fact that postwar history includes only 16 complete presidential terms. This paper asks why. The answer is not found in technical time series matters (such as differential trends or mean reversion), nor in systematically more expansionary monetary or fiscal policy under Democrats. Rather, it appears that the Democratic edge stems mainly from more benign oil shocks, superior TFP performance, a more favorable international environment, and perhaps more optimistic consumer expectations about the near- term future. Many other potential explanations are examined but fail to explain the partisan growth gap."
Philip R. Lane and Gian-Maria Milesi-Ferretti: Global Imbalances and External Adjustment after the Crisis: "This paper... reviews the recent dynamics of global imbalances... with a special focus on the shifting position of Latin America in the global distribution... examines the cross-country variation in external adjustment over 2008-2012.... Pre-crisis external imbalances have strong predictive power for post-crisis macroeconomic outcomes, allowing for variation across different exchange rate regimes. We emphasize that the bulk of external adjustment has taken the form of 'expenditure reduction', with 'expenditure switching' only playing a limited role..."
Former Sen. Bob Smith (R-NH): Scott Brown's Primary Opponent Blasts Fox's Glowing Coverage Of The Former Fox Employee: "They've totally ignored us. They've shut us down. We've made every effort to get on any of the shows, or at least have a comment. We've tried with [Fox host Sean] Hannity, we've tried with Baier, we've tried with, you name it... we've just been totally shut down. And I mean shut down. I mean we don't even get call backs.... I think that's not good reporting. It's very shoddy reporting. They're not doing any background, they haven't talked to me, or anybody from my team. They haven't talked to my campaign manager.... I don't think it's illogical or unreasonable to include me and frankly the other candidate, Mr. Rubens, who's been running as well for quite some time and I mean we're both very credible candidates.... I'm a conservative Republican so when the attacks come, if it comes from The New York Times or whatever, you know, okay, I expect it. "But when it comes from your own -- well I don't want to say my own, it's not my own media, but when it comes from what's supposed to be conservative media, or at minimally it's supposed to be fair and balanced, that's my point. That it's not fair and balanced.... I know the facts because I'm directly involved, I'm wondering how many other times are they saying something's fair and balanced when it's not?"
Sahil Kapur: Rick Perry's Border Ad Foreshadows Brutal GOP Primary In 2016: "Remember when Republicans wanted to woo Latino voters? It seems like an eternity ago. Far from taking party elders' advice last year to warm up to comprehensive immigration reform, Republican presidential hopefuls are moving in the opposite direction, already competing over who would be more aggressive at cracking down on illegal immigration..."
And Over Here:
- Alexander Hamilton at the Constitutional Convention: Weekend Reading (Brad DeLong's Grasping Reality...)
- Liveblogging World War II: August 16, 1944: Falaise Pocket (Brad DeLong's Grasping Reality...)
- Morning Must-Read: Noah Smith: Silicon Valley Can Solve the Big Problems (Brad DeLong's Grasping Reality...)
- For the Weekend... (Brad DeLong's Grasping Reality...)
- Hoisted from the Archives from 2008: Conservatism and Its Absence of Contents (Brad DeLong's Grasping Reality...)
- The Heritage Foundation, Stephen Moore, and the Kansas City Star: Live from La Farine CCCX: August 15, 2014 (Brad DeLong's Grasping Reality...)
- Liveblogging World War I: August 15, 1914: Régiment de Sambre-et-Meuse (Brad DeLong's Grasping Reality...)
- Afternoon Must-Read: Josh Lehner: Squaring Fed Policy (Brad DeLong's Grasping Reality...)
- Statement from Missouri Gov. Jay Nixon (D) and from the St. Louis Post-Dispatch: Live from La Farine CCCIX: August 14, 2014 (Brad DeLong's Grasping Reality...)
- Liveblogging World War II: August 14, 1944: Operation Tractable (Brad DeLong's Grasping Reality...)
- Evening Must-Read: Alan Blinder and Mark Watson: Presidents and the U.S. Economy: An Econometric Exploration (Brad DeLong's Grasping Reality...)
- Wesley Lowery et al.: Even before Michael Brown’s slaying in Ferguson, racial questions hung over police
- Rob Beschizza: Video of Ferguson police gassing news crew and dismantling their equipment
- Richard A. Berk David A. Freedman: Statistical Assumptions as Empirical Commitments
- Felipe Ossa: The Ultimate Stimulusat NYC Fringe 2014, Aug. 9-23
- Sunshine LeMontree: I Had a Brain Tumor
Should Be Aware of:
Economist: The euro-zone economy: Cyclical stagnation: "The new GDP figures are yet more evidence that the euro-zone economy is in a bad way.... It is not only that growth is evaporating; inflation is also extraordinarily low. In July it was only 0.4%, far below the target of just below 2% set by the European Central Bank (ECB).... Deflation would be particularly grave for the euro area because both private and public debt is so high in many of the 18 countries that share the single currency.... The ECB’s critics say that this is not enough and urge the central bank to introduce quantitative easing—creating money to buy financial assets. The ECB is likely to hold off; it seems to consider QE as a weapon of last resort..."
Harold Pollack: The disparaging stranger: Kevin Williamson visits East Saint Louis: "In 2014 America, does one really have to say that you shouldn’t deploy primate metaphors to describe a nine-year-old black boy, that it’s needlessly disparaging to describe that child as 'a three-fifths-scale Snoop Dog', that snide comments about the coiffed-ness of a child’s hair are best avoided, particularly if that child belongs to a different cultural or ethnic group from your own? Given the National Review’s checkered history on several racial matters, its writers and editors might be a tad more careful.... What most disturbs me about this column is the lack of context and the utter psychological distance between the writer and the people he is ostensibly depicts.... His column is ostensibly concerned with Illinois Governor Pat Quinn.... If Quinn did make policy mistakes regarding East St. Louis, you wouldn’t learn about them in Williamson’s piece, which is entirely consumed with one colorful but oddly un-illuminating anecdote. Indeed Williamson has managed to experience more weird, scary, rather implausible encounters with black people than I’ve accumulated in many years of public health work in poor African-American communities.... Williamson is the disdainful stranger. He parachutes in. He has fleeting, superficial encounters with random strangers who personify pejorative, politically-incorrect stereotypes about the pathology of lower-class urban life. In East Saint Louis, as anyplace else, people have real stories to tell. You have to engage them to hear them. You have to want to hear these stories, too."
Jonathan Chait: The Nation Denies Existence of Ukraine: "Why everybody is wrong about Russia, except Russia, which is oh so right. The highlight is... the 'fallacies' for which the West has fallen: '—Fallacy No. 2: There exists a nation called "Ukraine" and a "Ukrainian people" who yearn to escape centuries of Russian influence and to join the West. Fact: As every informed person knows, Ukraine is a country long divided by ethnic, linguistic, religious, cultural, economic and political differences—particularly its western and eastern regions, but not only. When the current crisis began in 2013, Ukraine had one state, but it was not a single people or a united nation. Some of these divisions were made worse after 1991 by corrupt elite, but most of them had developed over centuries.' There are two points here. First, is there, in fact, a nation called 'Ukraine'? Yes, there is. You can look it up. It's right there on the U.N. member state list, between Uganda and United Arab Emirates. And that really ought to settle the question. Countries have recognized borders, and you can't just send goons into some other country's territory and take it for yourself because you don't like their government. It is true that the people inhabiting Ukraine are divided linguistically, religiously, culturally, economically, and politically. That is also true of many, many other countries in the world. That does not obviate the fact that there is such a thing as 'Ukrainian people'. And second, even if it were not the case — even if Ukraine were nothing more than a polyglot collection of individuals who had absolutely nothing in common with each other — this would not give Russia any justification for hacking off chunks of the country through the use or threat of force."