Category Archives: The dismal science

"Is international labor mobility necessarily good?"

Faithful readers, I hope you’ll forgive the comparatively skimpy posts this early morning. I had to spend some time with a buddy who had just learned that one of his closest friends is dying. Generally, I give trade economics a wide berth, because once you get past simple two-country, two factor models the discussion gets […]

Barry Ritholtz Squares the Circle on GDP Growth vs. Consumer Spending

The most puzzling element in the recent set of economic releases and revisions on GDP growth is the disconnect between overall growth and consumer spending. The initial release for the first quarter showed GDP growth of 1.3% despite a rise in consumer spending of 3.8%; the revisions released last week reduced GDP growth to a […]

Money Supply, Inflation, and the Emperor’s (i.e., Central Banker’s) Nakedness

The Financial Times on Monday had two stories on inflation, one a lengthy story, the other a a comment, “The problem with inflation indices,” by Gideon Munchau, triggered by the fact that the Bank of England missed its inflation targets of 2% by over a percentage point (their Consumer Price Index increased at an annualized […]

Dani Rodrik Looks at the Free Trade Math and Finds Some of It Wanting

The debate among Serious Economists about the benefits of free trade continues, and Dani Rodrik continues to take a dispassionate look at the data and the models. This post, although a bit geeky, is intriguing because Rodrik dissects an analysis cited by Bernanke in a recent speech, which found that the benefits of free trade […]

Trade: China Doesn’t Play by the Rules

Readers may have taken note about the robust debate among Serious Economists about free trade, provoked in large measure by Harvard economist Dani Rodrik holding some of his peers’ feet to the fire (note that Rodrik is not anti-free trade, but anti sloppy or dumbed down justifications). One continuing bone of contention between economists and […]

Inflation Targeting: The Fed’s Excuse to Ignore Asset Bubbles?

Kudos for an excellent post, “Inflation Targeting is Flawed,” by Michael Shedlock at Mish’s Global Economic Trend Analysis. Like many other observers, we’ve criticized the Fed’s failure to consider, or even acknowledge, asset price inflation in its monetary policy decisions. Instead, the Fed and other central bankers focus on traditional price inflation, and stick their […]

When Does Theory Say Free Trade is a Good Thing?

Dani Rodrik, if he thought it wasn’t beneath him, deserves an op-ed column at a well respected paper. He has managed to foment a good deal of lively debate among Serious Economists (the blogs involved include his, Brad DeLong’s, Mark Thoma’s, and Greg Mankiw’s) on the question of trade economics. For the most part, Dani […]

Estimating the Gains and Losses from Free Trade

Yesterday, our post “Costly Trade with China,” cited a study by the same name by the Economic Policy Institute which estimated the jobs lost to trade with China between 1997 and 2006 at 2.1 million. I wondered whether anyone had done the calculus as to what the offsets to these job losses might be, and […]

The Fed: The Need for a Paradigm Shift

Due to Paul Volcker’s having broken the back of inflation in the early 1980s, and Alan Greenspan performing what appears to be adequately on the substance of his job and masterfully at the showmanship, the Fed’s reputation is at an all time high. And that in and of itself is a danger sign. The Fed’s […]