Monetary Economics Links

With the United States debt ceiling debate coming to a head, the recently released downward revisions of GDP data from the last few years, and talk of a second recession (or that there was never a recovery in the first place), I have been reading more than usual about monetary policy and macroeconomics. Here are some articles, posts, and other stuff I have been reading and found interesting enough to share here.

The "little depression" just got bigger by Brazilian economist Marcus Nunes

Recessions compared by GDP % change and employment % change

Greg Mankiw thinks Bernanke and the Fed have done a decent job

Scott Sumner on thinks Mankiw was too easy on Bernanke and that he should work for the Fed

Tim Harford's clever debt ceiling analogy

A letter to Timothy Geithner on what could happen if the debt ceiling isn't raised

NPR Planet Money Podcast: Would US credit rating downgrade matter?

Matt Yglesias on the difference between Inflation Targeting vs Price Level Targeting

Paul Krugman thinks more government spending is needed (I disagree, for long term concerns. Perhaps the optimist in me believes there are other ways to stimulate the economy... For starters, how about addressing all of the uncertainty related to the debt ceiling debate.)

Paul Krugman rips on the Maestro

Update: Tyler Cowen defends Greenspan

Apple has more cash in reserves than the US Treasury (this is all over the place a popular news story right now, but still amazing)

Update: A somewhat pessimistic view of the Sunday debt deal by Ezra Klein

I realize this compilation is somewhat all over the place, but it is worth reading.

Tim Harford on The Importance of Trial and Error

This TED Talk by economics writer Tim Harford is a snapshot of his new book, Adapt: Why Success Always Starts with Failure. If you find the talk interesting, I would highly recommend reading the book, which was thought-provoking and interesting throughout.

Corporate Profits Recover as Individuals Struggle

While corporate profits are recovering nicely, wages and salaries are stagnant. Check out recent posts at the Curious Capitalist here and Freakonomics here about how the current economic recovery strongly favors corporations and stockholders. The posts are based on this study from Northeastern University. The Great Recession differs greatly from recessions of the past, as does the current recovery.

To date, through the first quarter of 2011, the nation’s recovery from the 2007-2009 recession is both a jobless and a wageless recovery. (p. 23)

And here is a table comparing the current recovery to previous ones. (click to enlarge)

Center for Labor Market Studies, Northeastern University (p. 20)

 Hopefully, the recovery of jobs and wages will come with time, but how long this lag will be is debatable. Keep in mind, this recession was largely due to the sub-prime mortgage crash  - and resulting drop in home values - which is very different from prior recessions.

Signs of Economic Progress: China

In a recent discussion with a relative who does extensive business with the Taiwanese and Chinese, he talked about the changes he has witnessed occurring in China over the last decade. One story in particular stuck with me.

In a town in mainland China, there is a nice restaurant that he visits with his business partners on each trip. Ten years ago, the clientele were 90% Tiawanese and 10% Chinese. Now, he says, the clientele are 90% Chinese and 10% Tiawanese!

Although this is anecdotal evidence, and some of the changes could be due to changing demographics in the area, I think that this is also a sign of rising wages and a growing Chinese middle class. As a result of opening itself up to foreign investment and international trade, China continues to be one of the fastest growing economies in the world. Next step for the Chinese government, human rights.