Sunday, March 09, 2008
An Answer to Greg Mankiw's Question?
by Ken Houghton
We will leave aside for the moment whether or not inflation targeting is a good thing for a democratic society. (That I phrase the question in that form tells you the answer to which I'm inclined, I suppose, but I can be convinced.) Instead, N. Gregory Mankiw yesterday asked Whatever Happened to Inflation Targeting? , which we have to concede would be a fair question, given Fed statements.
I leave it to the Thoma/Duy (who have started related discussions here [Duy] and here [Thoma]) and Hamilton/Chinn discussants to try to answer Mankiw's question directly.
Indirectly, though, I followed Mankiw's link to the Cleveland Fed, who post this graphic on Household Inflation Expectations, based on University of Michigan Consumer Survey (gated entry here).
So, if we were asked what has happened, the clear answer from the public would be "nothing." The target may be off, but the expectations appear to have been mostly in the same range since (at least) the end of 2006. It is just that the adjusted TIPS rate is (finally?) approaching those expectations.
Thomas Sargent's speech at the AEA this year was All About the Glories of Inflation Targeting.
We will leave aside for the moment whether or not inflation targeting is a good thing for a democratic society. (That I phrase the question in that form tells you the answer to which I'm inclined, I suppose, but I can be convinced.) Instead, N. Gregory Mankiw yesterday asked Whatever Happened to Inflation Targeting? , which we have to concede would be a fair question, given Fed statements.
I leave it to the Thoma/Duy (who have started related discussions here [Duy] and here [Thoma]) and Hamilton/Chinn discussants to try to answer Mankiw's question directly.
Indirectly, though, I followed Mankiw's link to the Cleveland Fed, who post this graphic on Household Inflation Expectations, based on University of Michigan Consumer Survey (gated entry here).
So, if we were asked what has happened, the clear answer from the public would be "nothing." The target may be off, but the expectations appear to have been mostly in the same range since (at least) the end of 2006. It is just that the adjusted TIPS rate is (finally?) approaching those expectations.
Labels: Economics, full employment, Inflation, rational expectations
Tuesday, February 12, 2008
Marshall Jevons confirms part of my suspicion
by Ken Houghton
(For context, it was common belief among my cohorts in the Government Practice at PwC that government employment would decline by about 30% in the next 20 years. Since that was ca. 2001, we're more than 1/3 of the way there.)
Fortunately, Marshall Jevons presents the evidence graphically. What might have been expected to be a 7-10% decline is nowhere to be found.
So not only are they pouring sand in the gas tank, they are adding to the weight of the car. And heavier cars, as any physicist or Stata user can tell you, get lower performance.
If I weren't still buried in health data, with a side trip to MLB, one of the things I wanted to work out was whether the current "Small Government Republican" administration would have positive job growth without its additions of government jobs.
(For context, it was common belief among my cohorts in the Government Practice at PwC that government employment would decline by about 30% in the next 20 years. Since that was ca. 2001, we're more than 1/3 of the way there.)
Fortunately, Marshall Jevons presents the evidence graphically. What might have been expected to be a 7-10% decline is nowhere to be found.
So not only are they pouring sand in the gas tank, they are adding to the weight of the car. And heavier cars, as any physicist or Stata user can tell you, get lower performance.
Labels: full employment, governance, Republicans, Statistics
Tuesday, January 29, 2008
Jessica Hagy Explains why most Labor Utilization Models are Flawed
by Ken Houghton
Read the whole thing. (It won't take long.)
Labels: Economics, full employment, lump of labor
Thursday, May 03, 2007
Transitions Post
by Ken Houghton
Multiple transitions recently: pretty much everything except marriage/divorce and buying a new house (though we did complete the refi). A few more to come, so posting will be spotty.
But, especially since Tom referenced it, I want to post the beginning of this "lost post":
Tom dealt quite well with the absurdity of Cuban's example. Music videos, after all, are charged back to the artist, no less. But the question of how to make content "available" is rather more expansive than Cuban allows.
For instance, the first thing the folks of my hometown (defined as the place from which one graduated high school) were told when Visteon (nee Ford) announced they were closing the plant (to which many of our families were relocated ca. 1966-1968) is that the town is Valuable because of its Workers.
You know, the same Workers who are now out of jobs because Visteon decided they couldn't get enough value from the plant. So all that "available" content remains unused.*
This is hardly a unique situation. Check out any of Save the Rustbelt's posts about Ohio at AngryBear. What is interesting is that the first thing the Consultants do is come in and assure the workers (read: voters) that It's Not Their Fault.
Which is a good message. And, especially in this case, largely True. (The unemployed workers, after all, are not the Ford executives whose CF strategy put the company in its current situation.)
More later.
*Update: Apparently, there is now a plan for an ethanol processing plant. Considering the cost, in both senses, of using ethanol as fuel (as Tom has documented), this will allow the workers to Demonstrate their Value only if one double-counts the government subsidy. So much for Proud and Independent.
We're back at Willow Valley, which in the intervening year has moved on to offering free WiFi in all areas. (And now on to Hershey Park, with the same amenity.)
Multiple transitions recently: pretty much everything except marriage/divorce and buying a new house (though we did complete the refi). A few more to come, so posting will be spotty.
But, especially since Tom referenced it, I want to post the beginning of this "lost post":
It's no secret that I disagree with Mark Cuban on the details of IP costing and benefits. (This and $2.00 gets you on the NYC subway, which I take much more often than Mr. Cuban, in part because he has made a lot of money from IP.) But we are completely agreed on the principle: if your content isn't available, no one will pay for it.
It's the reverse of that I want to consider today.
Tom dealt quite well with the absurdity of Cuban's example. Music videos, after all, are charged back to the artist, no less. But the question of how to make content "available" is rather more expansive than Cuban allows.
For instance, the first thing the folks of my hometown (defined as the place from which one graduated high school) were told when Visteon (nee Ford) announced they were closing the plant (to which many of our families were relocated ca. 1966-1968) is that the town is Valuable because of its Workers.
You know, the same Workers who are now out of jobs because Visteon decided they couldn't get enough value from the plant. So all that "available" content remains unused.*
This is hardly a unique situation. Check out any of Save the Rustbelt's posts about Ohio at AngryBear. What is interesting is that the first thing the Consultants do is come in and assure the workers (read: voters) that It's Not Their Fault.
Which is a good message. And, especially in this case, largely True. (The unemployed workers, after all, are not the Ford executives whose CF strategy put the company in its current situation.)
More later.
*Update: Apparently, there is now a plan for an ethanol processing plant. Considering the cost, in both senses, of using ethanol as fuel (as Tom has documented), this will allow the workers to Demonstrate their Value only if one double-counts the government subsidy. So much for Proud and Independent.
Labels: Economic Development, full employment, Hershey Park, Intellectual Property, just life, refinance, Willow Valley