From the category archives:

Economics

What is the "long-term mean" of real estate as a % of GDP?

June 12, 2009

Felix Salmon's chart of the day comes by way of wcw and shows household assets as a percentage of GDP: Felix notes: If this line reverts to the long-term mean, the extra evaporation of housing equity would be utterly devastating. But is there any reason to believe that it won’t? But I wonder, what is [...]

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Irrational markets: V-shaped edition

June 8, 2009

The market shot up late this afternoon because Paul Krugman stated: “I would not be surprised if the official end of the U.S. recession ends up being, in retrospect, dated sometime this summer,” he said in a lecture today at the London School of Economics. “Things seem to be getting worse more slowly. There’s some [...]

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Bankruptcy law is such a nuisance

June 8, 2009

The White House tried to block the Indiana pension funds' appeal of the Chrysler sale from ever reaching the Supreme Court. U.S. Solicitor General Elena Kagan argued that the funds lack the standing to make their appeal, and that not only should their claims be dimsissed, but the Supreme Court does not even have the ability [...]

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Breaking down labor mobility

June 7, 2009

Great graphic from the NYT (click to zoom): (via LL)

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First 100 days (of the stimulus bill)

May 28, 2009

The White House is praising the stimulus bill, saying that it has created 150,000 jobs in its first 100 days. Unfortunately, in the last 100 days 9,000,000 people filed jobless claims for the first time. Thus, the stimulus bill has offset less than 2% of the jobs lost, or - to spin it positively - [...]

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On revisions, episode IV (A New Hope?)

May 28, 2009

Durable goods +1.9% vs 0.5%! Durables ex-transportation +0.8% vs -0.3%! Initial jobless claims 5k under expectations! The headlines looked pretty good at 8:30 am, until you took a look at the revisions. Indeed, today's economic numbers serve as yet more examples of creating the false perception of growth by changing the past. Durable goods orders were [...]

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Dead shoots?

May 22, 2009

Happily, I've only used the term "green shoots" one time in the brief history of TGR, and then only sarcastically in the title of this cartoon (which I stand by, as this post should make evident). The term has always struck me as ridiculous, and not solely because it was first uttered at a time [...]

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Charting value (maybe)

May 19, 2009

Silicon Valley Insider presented this as its Chart of the Day today, saying it indicates the success of Microsoft's "Laptop Hunter" ads: First of all, it takes some digging to learn what this scale even means, which brings us to a violation of charting rule #1: do not use a misleading axis! The true scale [...]

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Dynamically priced baseball tickets

May 18, 2009

Seven years ago, the Mets were among the first teams in MLB to adopt a tiered pricing system in which it costs more to see a game against a good opponent than a bad one. At the time, it was the most sophisticated such plan in baseball. Others included simple methods like charging more for [...]

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The case of the missing auto sales

May 13, 2009

April advance retail sales were announced much lower than expected, coming in at -0.4% vs the anticipated 0% month-over-month change. Auto sales constitute a large part of retail sales (around 20%, in fact), and so it can be informative to look at the retail number excluding autos to see the real trend in consumer behavior. [...]

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A textbook bailout

May 8, 2009

In response to thoughts that Ty Cowen's new economics textbook might threaten his income, Greg Mankiw amusingly responds: It is true that there is always entry into the textbook-writing business, which imperils incumbents like me. But I am not worried. I am one of the economics profession's leading producers of textbooks, I have an extensive [...]

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The "less is more" approach

May 4, 2009

When I was in school, we read a paper on "damaged goods" - products which a manufacturer has intentionally disabled in order to price discriminate or drive revenue elsewhere. Now, Jorge Garcia's blog (you may also know him as Hurley), demonstrates the phenomenon in the wild via this accidental economics lesson: Kudos Smarte Carte On the new design. [...]

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On the age of empiricism

May 1, 2009

Caught this on Rortybomb - Barry Eichengreen has penned an excellent piece on the role of models in academia and finance, as well as the growing importance of empiricism (a point with which I particularly empathize). An excerpt: Maybe so. But amid the pervading sense of gloom and doom, there is at least one reason for [...]

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The iTunes experiment

April 20, 2009

The first week of results on iTunes' tiered pricing are in and they are positive. According to a Billboard report, songs which experienced price hikes of 30% sold only 12.5% fewer units (only 6.9% fewer if you ignore "the expected second-week drop of Black Eyed Peas' Boom Pow Pow" - a wholly un-justified remark which [...]

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Unemployment map

April 20, 2009

Slate has an interactive map which illustrates job losses by county throughout the US over the last two years. It's very sobering to watch the red circles (representing losses) explode in late 2008.

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"Bright" ideas

April 20, 2009

It's hard to believe FT Alphaville is taking this seriously, but they are: markets and sunspot cycles. Apparantly, as this very convincing graph shows, recessions correspond with the regular sunspot cycle: As this plainly demonstrates, there is a perfect correlation with sunspots and recessions. Except for that little recession in the 1930's, but that one doesn't count, [...]

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Where green shoots come from

April 17, 2009

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The Modeling Problem

April 16, 2009

Mike at Rortybomb has a post on the pros and cons of MBAs. Among his cons is the following: They just wrote a post about MBA students being owned by their models. The general idea underneath this is that these models are too complicated to understand, and taught to be something that is true rather [...]

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China: Where Information Flows Freely

April 16, 2009

Floyd Norris on China's reported GDP figures: China is becoming the world’s most energy-efficient economy. Or maybe its statisticians are just the most creative. Essentially, for the past decade China's GDP has grown at a slightly slower rate than its electricity usage (which makes sense, since production requires energy). This year, GDP growth contracted sharply [...]

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On revisions, episode III

April 6, 2009

Or: Yet More Ways to Lie With Statistics. Last Thursday, the month-over-month percent change in factory orders for February was announced at 1.8%. The expected number was 1.5%. Sounds like good news, right? Unfortunately, the January number was revised from -1.9% to -3.5% in the same release. The easiest way to make a month-over-month change [...]

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On revisions, episode II

April 4, 2009

It occurs to me in looking at the revised payroll numbers that each month's revision creates the illusion of a bottom having occurred in that month, since the revisions to past months are almost always below the reported number of the most recent month. But it is widely accepted that the employment bottom will lag other indicators, [...]

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Policy & Depression

April 4, 2009

UCLA Economist Lee Ohanian, who recently published a paper on the role of the New Deal in prolonging the Great Depression (I covered it here), wrote to Professor Mankiw with a preview of his follow-up implicating Hoover's policies as well: I conclude that the Depression is the consequence of government programs and policies, including those [...]

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Economics 101: Market Failure (PPIP edition)

March 25, 2009

Back in Ec 10 we discussed the two principal forms of market failure: moral hazard and adverse selection. Both are forms of information asymmetries, and lead to a loss of surplus and general lack of efficient resource allocation. Moral hazard is the idea that if someone knows they are protected from risk, they will behave in [...]

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Worst Weekend: Roundup

March 23, 2009

Unusually, the NYTimes published three opinions this weekend which all slammed Obama - from authors who usually gush about the administration. I don't back off my own opinion that the Times editorial writers are a bunch of pseudo-populist fair-weather fans, but as usual they manage some salient points in their rants: Let's kick it off with [...]

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57% of the deficit, visualized

March 14, 2009

Believe it or not, this next little pile is $1 million dollars (100 packets of $10,000). You could stuff that into a grocery bag and walk around with it. ...continued at What does one TRILLION dollars look like?

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What would McKinsey say?

March 11, 2009

The NYTimes' Economix blog has a new post by Ed Glaeser, which reexamines my favorite Dr. Suess book, The Lorax, through a neo-classical lens. Revealingly, it's titled "The Lorax Was Wrong: Skyscrapers Are Green." And while I found the whole thing a bit overdone, I did enjoy one piece of the analysis: Over the protests [...]

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Krugman vs Mankiw... again

March 11, 2009

They're still at it! Mankiw explains on his blog (provacatively titled "Wanna bet some of that Nobel money?"): Paul Krugman suggests that my skepticism about the administration's growth forecast over the next few years is somehow "evil." Well, Paul, if you are so confident in this forecast, would you like to place a wager on it and take advantage [...]

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A sense of despair

February 27, 2009

For once, I agree with Paul Krugman when he writes: There’s so much to like about where Obama is going — health care, transparency in government, ending the war in Iraq. And the stimulus bill is OK, though not big enough. But on the question of fixing the banks, many of us are feeling a [...]

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RIAA just can't get it together

February 26, 2009

MB makes an excellent point on "why everyone hates the music industry." I could not agree more. Is there any more idiotic corporate group? Oh... yes.

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More homes!

February 24, 2009

Excerpt from Obama's speech to Congress: That’s what this is about. It’s not about helping banks – it’s about helping people. Because when credit is available again, that young family can finally buy a new home. And then some company will hire workers to build it. And then those workers will have money to spend, [...]

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