Suchergebnisse

The uniquely quirky way "shelter" costs are estimated by the US Bureau of Labor Statistics commands such a huge share of the Consumer Price Index (CPI) that it has overwhelmed everything else for nearly two years.

Inverted yield curves can easily be fixed in a week or two.

The smart takeaway from Larry Summers' misleading comparison of recent events with the oil crises of 1973–1982, and from his June 2022 cheerleading for a 5–10 percent unemployment rate, is that Fed Chairman Powell should look elsewhere for advice.

Alan Reynolds


A paper on "Managing Disinflation" was recently presented at Chicago Booth by former Fed Governor Frederic Mishkin, and four distinguished co‐​authors. "There is no post‐​1950 precedent for a sizable central‐​bank induced disinflation," they concluded, "that does not entail substantial economic sacrifice [unemployment] or recession."[1] That was, of course, cheerleading for the familiar "Phillips Curve" theory, which claims low unemployment causes high inflation by raising wages, so high inflation can only be reduced by higher unemployment.







The Phillips Curve is the heart and soul of the Federal Reserve's forecasting model. It is the reason Fed Chair Powell keeps fretting about "tight labor markets" as the reason the FOMC can never stop pushing short‐​term interest rates above long‐​term rates until another "hard landing" pushes the unemployment rate above 4.5 percent.
According to the "Managing Disinflations" and endless lectures by Fed officials, the reduction of inflation since last June could not have happened. After 15 months in which the CPI inflation rate averaged 8.5 percent (and the fed funds rate was tiny), it has now fallen to 3.1 percent for 11 months. Did that happen because the unemployment rate went up? On the contrary, unemployment fell from 4.5 percent to 3.6 percent.
But the Fed and academic economists are not easily dissuaded by troublesome facts. They just keep on searching for new ways of explaining why the theory is still right, but the world has gone wrong.


[1] Stephen G. Cecchetti, Michael E. Feroli, Peter Hooper, Frederic S. Mishkin, and Kermit L. Schoenholtz. "Managing Disinflation" (February 2023) Table 2.1. https://​www​.chicago​b​ooth​.edu/​-​/​m​e​d​i​a​/​r​e​s​e​a​r​c​h​/​i​g​m​/​d​o​c​s​/​u​s​m​p​f​-​2​0​2​3​-​confe…

"Lagged OER and rent overstated inflation by more than two percentage points over the past ten months – raising it to 3.3 percent from 0.6 percent." ~ Alan Reynolds

Intro -- Contents -- Illustrations -- Series Foreword by Wesley B. Truitt -- Introduction -- 1. Concepts and Measures -- 2. Work Matters -- 3. A Vanishing Middle Class? -- 4. The Wage Stagnation Thesis -- 5. The Top 1 Percent -- 6. CEOs and Celebrities -- 7. Wealth Is Not Distributed -- 8. Consumption Inequality, Lifetime Income, and Mobility -- 9. Causes and Cures -- Glossary -- Online Resources -- Index -- TABLES 1.1 Distribution of Persons by Family Type -- TABLES 1.2 Census Bureau Gini Ratios for Pretax, Pretransfer Money Income -- TABLES 1.3 Comparison of Income Distributions Producing the Same Gini Index -- TABLES 1.4 Before-Tax Household Income (in 2004 Dollars) -- TABLES 2.1 Average Household Income by Quintile (and Top 5 Percent) Census Bureau (Estimates in 2004 Dollars) -- TABLES 2.2 Average After-Tax Household Income by Quintile (and Top 5 Percent) Congressional Budget Office (Estimates in 2003 Dollars) -- TABLES 4.1 Full-Time Wage and Salary Workers, 2004 -- TABLES 4.2 Ownership of Consumer Goods -- TABLES 5.1 Estimated Income Share of Top 1 Percent -- TABLES 5.2 Dew-Becker and Gordon Estimates of Labor Income (Billions in 2000 Dollars) -- TABLES 5.3 Distribution of Tax-Deferred Account Holders by Marginal Tax Rates, 1998 -- TABLES 5.4 Shares of Pretax Personal Income -- TABLES 7.1 Percent of Baby Boomers with Net Worth above 250,000 (in 2001 Dollars) -- TABLES 7.2 The Composition of Household Wealth in 1995 (Percent of Gross Assets) -- TABLES 8.1 Alternative Measures of Inequality (Gini Coefficients) -- TABLES 8.2 Increase in Mean Disposable Income Needed to Move to a Higher Group in 1992-1994 -- TABLES 9.1 Number of Manufacturing Jobs (Thousands) -- TABLES 9.2 Average Hourly Earnings in December 2005 by Production or Nonsupervisory Workers -- TABLES 9.3 Maximum Marginal Tax Rates on Individual Income.

G‐7 economies raised tax rates in the 1990s, unlike the 1980s. Yet many developing nations continued to bring their highest tax rates down. Economic growth among 19 countries with low or falling tax rates averaged 5.8% a year from 1990 to 1996, up from 4.5% in the preceding decade. At the same time, annual GDP growth among G‐7 countries slowed to 1.7%, down from 2.9%.