Posts Tagged ‘Economics’
Lousy Legislators
The most active Congress, as measured by the number of bills passed into law, excluding private bills, was the 84th (1955-1956) which passed 1,028 bills. Eisenhower (R) was President; Lyndon Johnson (D) was Senate Majority Leader and Sam Rayburn (D) Speaker of the House. The least active was the 112th (2011-2012) which passed 238 bills.…
Read MoreHarmful Housing
Since housing is long-lived, when a city chronically loses population, the existing housing stock lowers house prices, preventing new construction and renovation activity, leading to deterioration in the housing stock. While cheap housing attracts the poor and slows population declines, it also makes it harder for the city (think Detroit) to turn its economic fortunes…
Read MoreFederal Reserve Flexibility
The just-released minutes of the Federal Reserve’s July meeting are a Rorschach test. For those reluctant to taper, there’s a nod to the still struggling labor market and the very low inflation rate. Conversely, others felt that the recent rise in interest rates would exert little restraint and that easier lending standards would help juice…
Read MoreHot Lots
In a move to streamline operations and cash in on the home building renaissance, Weyerhauser is selling its home-building unit. The prize, 27,000 lots including 18,000 in market-constrained litigation happy California, mostly in L.A. and San Diego. Assuming no goodwill, if the home-building unit sells for $3 billion, that’s just $110,000/lot. At $4 billion it’s…
Read MoreFly Away
Despite allowing Delta to buy Northwest, United to buy Continental, and Southwest to buy AirTran, the Department of Justice has come down hard against the US Airways-American merger. Years ago the industry was hemorrhaging money and it was in everyone’s interest to have a stable and profitable airline industry. Now that it is, reduced competition…
Read MoreFinancial Repression
While the Chinese government must rebalance its economy away from export and investment-led growth towards household consumption-led growth, the problem is that the combination of low wages, low interest rates on savings and an undervalued currency all conspire to keep the household share of Chinese GDP spectacularly low, constraining household spending. Reversing all these policies…
Read MoreWorth Less Used Cars
The Friday File: Wonder why driving a new car off the lot reduces its value by 25% or more? One reason has to do with the retail showroom price versus the resale/used price. The other has to do with car quality. Why return a new car unless it’s a lemon or suffered non-visible damage? Thus,…
Read MoreEthics for Economists
The Friday File: US academic economists (but not econ bloggers) are adopting a code of ethics requiring them to disclose conflicts of interest by reporting research-funding sources and material financial relationships. This is partly motivated by the documentary “Inside Job” winner of an Academy Award that highlighted the undisclosed consulting relationships of several very influential…
Read MoreNobel Prize Prognostications
With the Nobel in economics to be awarded next week, here’s my list of candidates: Bhagwati and Dixit for research in international trade, Barro and Romer for growth econ, Hart for transactional econ, Nordhaus and Weitzman for environmental econ, Fama and French for financial econ, Shiller and Thaler for behavioral econ, Diamond for financial intermediation,…
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