The Kauffman Foundation published its new quarterly survey of “leading economics bloggers” today and the general outlook from this group is that there’s “a bit of hope” twinkling on the horizon, according to the press release. The Capital Spectator is among those surveyed.
Daily Archives: February 17, 2011
History May (Or May Not Be) Your Guide
Economist James Hamilton reminds that we should recognize a distinction between claims that the Fed is printing money proper and crediting accounts at banks that are part of the Federal Reserve system. “These electronic credits, or reserve balances, are what has exploded since 2008,” Hamilton notes. Currency in circulation, by contrast, “has increased by 5.2% per year over the last two years, a bit below the average for the last decade.”
Consumer Prices Rise In January
In a time of soaring commodity prices, it’s no surprise to learn that consumer price inflation turned modestly higher last month. The debate is over what the latest jump in the CPI Index means for inflationary pressures down the road. Is there a new inflationary surge heading our way, as some analysts warn? Or is the firming of prices last month merely a sign that disinflation/deflationary trend of last year has been reversed and stabilized?
Research Review | 2.17.2011 | U.S. Labor Market
What Is the New Normal Unemployment Rate?
Justin Weidner and John Williams | San Francisco Fed | Feb 14, 2011
Mounting evidence suggests that structural factors may have increased the “normal” rate of unemployment to about 6.7%. Much of this increase is likely to be temporary. In particular, the extension of unemployment benefits probably accounts for about half of the increase. But, even with a 6.7% natural rate, current and forecasted levels of unemployment imply that significant labor market slack will persist for several years. It is important to stress that each of the methods used to estimate the natural rate is subject to considerable error, especially given the limited experience of very high unemployment in the post-World War II U.S. economy. As the recovery proceeds, we should develop a clearer picture of the new normal rate of unemployment.
