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2026-06-19

• Colorado’s Funeral Mistake
  by ? in Marginal Revolution, 2026-06-19 11:20:08 UTC

  Today about a quarter of the US workforce are required to have a license to work in their chosen profession, up from just 5 percent in 1950. Almost always the trend has been to add occupational licensing over time, but in 1983 Colorado did something unusu… [...]

2026-06-18

• AI versus the China Shock
  by Adam Ozimek in Agglomerations, 2026-06-18 10:31:34 UTC

  To hear an extended conversation about the themes in this post, please subscribe and listen to our podcast, The New Bazaar . The China Shock refers to the widespread job loss that certain workers and communities suffered because of the rapid rise of trade with China in the 2000s. The AI Shock refers to the same thing happening to white collar workers from the rise of Artificial Intelligence. For now, the AI Shock is merely a potential shock. But a number of economists , journalists , and other experts have drawn worrying parallels between these two shocks. We understand why. Across a large bod [...]

2026-06-15

• Who holds US Treasury securities overseas? : Data from the TIC system
  by ? in FRED blog, 2026-06-15 13:00:00 UTC

  The majority of Treasury securities are held by the American public and institutions , including the Federal Reserve. FRED recently added data from the Treasury International Capital (TIC) system. As the name implies, this dataset provides a global scope. In March 2026, the nine largest foreign holders of U.S. long- and short-term Treasury Securities were (in descending order) Japan United Kingdom China, Mainland France Canada Belgium Ireland Cayman Islands Luxembourg This May 2026 FEDS Note by Andrew McCallum et al. highlights that “these nine countries collectively hold about 45 percent o [...]

2026-06-10

• What bond market constraint?
  by Chris Dillow in Chris Dillow, 2026-06-10 08:39:06 UTC

  “The cost of government borrowing” writes MP Yuan Yang “constrains policy decisions”. She’s partly right, but this should not greatly trouble the left. First, we must recognise that to a large extent the bond market constraint is in fact an inflation constraint. If a government were to borrow significantly more, bond investors would fear that the higher aggregate demand would raise inflation. This would lead either to expectations of higher interest rates as the Bank of England tried to control inflation, or to fears that their gilts would be redeemed in pounds that were worth less. Either wou [...]

2026-06-08

• From Potential Output to Full Employment: A Paradigm Shift for Italian Fiscal Policy
  by Davide Romaniello, Antonella Stirati in INET Blog, 2026-06-08 16:38:41 UTC

  Europe’s new fiscal rules still bind policy to fragile estimates of potential output. For Italy, targeting lower unemployment could sustain stronger growth, improve deficit outcomes, and expose the self-defeating logic of austerity when debt is measured against a stagnating economy. 1. Introduction In 2024, the European Union introduced new fiscal rules. But the changes are more apparent than real and do not address the limitations highlighted by the European Fiscal Board in 2019. In a recent paper we critically examine the new rules and assess ho [...]

• Understanding the various US debt-to-GDP ratios : Similar data series tell slightly different stories
  by ? in FRED blog, 2026-06-08 13:00:00 UTC

  Headlines earlier this year reported that federal US debt exceeded the size of the US economy. Another way to put that: The US debt-to-GDP ratio is over 100%. Opinions and economic analysis vary about what a sustainable fiscal path looks like in the United States. And the multiple data series in FRED that track the US debt-to-GDP ratio also vary. This post provides some clarification and guidance on understanding this ratio in its many forms and expands the descriptions from a 2025 blog post on this topic. US public debt and intragovernmental transactions Our FRED graph above shows three data [...]

2026-06-04

• I'm kind of over the whole "Anti-monopoly" movement
  by Noah Smith in Noahpinion, 2026-06-04 05:52:29 UTC

  For many years, I was a big proponent of the idea that increased market power was harming the U.S. economy in various ways. In the 2010s, in the economics world, circumstantial evidence began piling up that implicated increased industrial concentration as the culprit in a variety of recent negative trends. Here’s what I wrote in 2017 , after reading a bunch of that evidence: [B]asically I see the case of the Market Power Story - or any big economic story like this - as detective work. We’re collecting circumstantial evidence, and while no piece of evidence is a smoking gun, each adds to the ov [...]

2026-05-27

• The great helmsman?
  by Scott Sumner in The Pursuit of Happiness, 2026-05-27 16:36:31 UTC

  [Long time readers will recognize part 1—how to steer the (nominal) economy down the center of the road. Part 2 will look at how to move the road.] Part 1: The Great Helmsman So now we are being told that an increase in interest rates is a virtual certainty. Here’s Bloomberg : As Kevin Warsh takes the helm at the Federal Reserve, bond investors are betting he’ll prioritize the central bank’s inflation-fighting credibility over President Donald Trump’s push for lower interest rates. With the Iran war unleashing the biggest inflation surge since 2023, traders are pricing in that the Fed is vi [...]

2026-05-21

• How are benchmark borrowing costs measured? : A close look into the 10-year Treasury yield
  by ? in FRED blog, 2026-05-21 13:00:00 UTC

  The takeaway The market value of US Treasury securities is considered a benchmark for setting other borrowing costs, such as mortgages. It’s considered a benchmark because the US government has not failed to make good on its Treasury debt obligations. So it serves as a baseline for determining the value of other types of securities with higher default risks. Defining the value of Treasury securities Because of its importance to financial markets, the “market yield on US Treasury securities at 10-year constant maturity, quoted on an investment basis” is one of the most popular series in FRED. [...]

• Financial markets point to very data-dependent monetary policy
  by BankUnderground in Bank Underground, 2026-05-21 08:00:00 UTC

  Nades Raviraj and Danny Walker Big and uncertain shocks have pushed UK inflation above the 2% inflation target over the past few years. How did financial markets view the Monetary Policy Committee’s (MPC’s) monetary policy during this unprecedented period? We show that markets have come to perceive the MPC’s policy stance as increasingly dependent on data releases. In particular, the responsiveness of UK market rates in tight windows around data releases rose significantly from 2022 to 2025. Zooming out to longer time windows in between MPC meetings, the change in services inflation ex [...]

• Roundup #82: Staring in wonder at the world
  by Noah Smith in Noahpinion, 2026-05-21 06:51:31 UTC

  Photo by NASA via Wikimedia Commons I waited too long to do this roundup, and the amount of interesting stuff built up to truly vast proportions. So let’s get right to it. 1. Crime is down! I often get annoyed with people who trumpet falling crime in American cities. Often, these same people are silent in the years when crime rises — for example, 2015-2021. This means that all those cries of “Crime is down!” might only bring us back to where we were before. Also, even when crime falls in America, it still generally leaves us about 5x as violent as Europe . People who use crime drops to wave aw [...]

2026-05-19

• Words and deeds in the Indian exchange rate
  by Anurodh in Ajay Shah's blog, 2026-05-19 05:31:06 UTC

  by Rajeswari Sengupta and Ajay Shah. The most important price in any economy is the exchange rate. In India's case, this is the price of the Indian rupee against the US dollar. By default, the exchange rate is controlled by market forces. The policy stance of the government, towards the exchange rate, is termed 'the exchange rate regime'. This is one of the most consequential economic policy choices. In most advanced economies, the answer is straightforward: the exchange rate is set by financial markets, and the government stays out. In India, it is more complicated. The RBI regularly in [...]

2026-05-14

• The Great Forgetting
  by Scott Sumner in The Pursuit of Happiness, 2026-05-14 18:08:13 UTC

  Noah Smith has a very good post on development economics, which contains the following list: The field of economics doesn’t lack for big ideas about why countries go from poverty to riches. These include: Institutions: The idea that property rights, legal frameworks, and other systems of human organization are long-lasting (“sticky”) and are crucial for development Geography: The idea that countries’ natural endowments — navigable waterways, farmland, proximity to other regions, etc. — determine which place gets rich Human capital: The idea that skills — reading, math, etc. — and population [...]

2026-05-11

• The peculiar recent behavior of unemployment
  by ? in FRED blog, 2026-05-11 13:00:00 UTC

  Our FRED graph above shows that unemployment is almost always doing one of two things: (1) declining slowly during expansions or (2) rising rapidly during recessions. Friedman ( 1964 , 1993 ) compared this behavior to playing a musical instrument, describing it as a “plucking model” of unemployment. Over the past 3 years, however, the unemployment rate has done something it almost never does: It has risen slowly from a low level, but there has been no sharp rise accompanied by a recession. Our non-FRED graph below* illustrates how unusual this behavior is. The jagged red line is [...]

• Why can’t we just print more money?
  by Dalton,A in LSE Review of Books, 2026-05-11 10:02:57 UTC

  Modern Monetary Theory (MMT) claims that governments could fill revenue gaps for key projects like unemployment programmes and energy security without raising taxes: they could simply print more money, with certain precautions in place. But could this really work? Emmanuel Maggiori draws on his new book, If You Can Just Print Money, Why Do I Pay Taxes? to interrogate MMT’s boldest claims. If You Can Just Print Money, Why Do I Pay Taxes? Modern Monetary Theory Distilled and Debunked in Plain English. Emmanuel Maggiori. Wiley. 2026. Modern monetary theory (MMT) is a seductive econo [...]

2026-05-08

• Did inequality trigger the rise of populism?
  by Tibor Rutar in Political Economy, Stats, and Society, 2026-05-08 11:02:50 UTC

  In a 2019 Foreign Affairs piece, Francis Fukuyama threw his weight behind the standard economic story for the rise of populism over the past two decades and the onset of the democratic recession. Here’s how he put it: I concur with the commonplace judgment that the rise of populism has been triggered by globalization and the consequent massive increase in inequality in many rich countries. I really like the guy, especially his attitude toward liberalism and his distaste of illiberals and authoritarians. More importantly, I agree with several of his key ideas from The End of History and the Las [...]

2026-05-06

• Could development economics be more useful?
  by Noah Smith in Noahpinion, 2026-05-06 06:08:15 UTC

  Source: Jesús Fernández-Villaverde The above image is from a recent tweet by University of Pennsylvania economist Jesús Fernández-Villaverde (henceforth referred to as “JFV”), in which he criticizes the field of development economics for ignoring the big questions. He writes: A fundamental lesson from my posts these last two weeks on modernization, industrial policy, and development is that development economics should be about understanding why South Korea got rich but Bolivia did not. The current field has largely given up on that question. Sharply identified RCTs on small micro programs are [...]

2026-04-29

• Simplifying the Regulation of Small Nuclear Reactors
  by Matthew E. Kahn in Environmental and Urban Economics, 2026-04-29 11:47:36 UTC

  If the Chernobyl and Three Mile Island nuclear power accidents hadn’t occurred, how much electricity would be generated each year using nuclear power? Regulations were triggered by these shocks and these regulations have slowed the growth of clean nuclear power and nuclear power innovation. M y 2007 paper on rare disasters as regulatory catalysts explores this point. Few PHD students enter this field because they don’t expect that there is demand for their services. This ugly Catch 22 creates a self-fulfilling prophesy. Nuclear power would be safer if more talent enters the field but yo [...]

2026-04-16

• The cost of markets
  by Chris Dillow in Chris Dillow, 2026-04-16 08:17:59 UTC

  There is, wrote (pdf) Ronald Coase, “a cost of using the price mechanism.” It comprises such things as discovering suppliers; finding the best prices; forecasting future changes in one’s requirements; and negotiating and enforcing contracts. It is because of these costs that companies exist. They, in effect, replace the market with a hierarchical relationship. Rather than finding a contractor for every job the employer can simply tell an employee what to do. Instead of looking for a supplier of parts, the company can make them itself. And rather than worry about having to renegotiate contracts [...]

2026-04-10

• Monetary Tightening and the Price Puzzle in Asian Economies
  by a.kumar@soton.ac.uk (Abhishek Kumar) in Asia Economics Blog, 2026-04-10 11:24:24 UTC

  In theory, an exogenous increase in the policy interest rate should lead to a decline in inflation, assuming the demand side effects dominate the supply side effects. However, for emerging market economies many empirical studies based on structural vector autoregressions (SVARs) find that an increase in the policy rate is followed by a rise in prices, a phenomenon known as the price puzzle (e.g., Sims, 1992 ). One explanation for this puzzle is the misidentification of monetary policy shocks ( Ramey (2016) . To address this issue, some studies have incorporated proxies for inflation expectatio [...]

2026-04-09

• "In it for themselves"
  by Chris Dillow in Chris Dillow, 2026-04-09 07:54:12 UTC

  “MPs are all in it for themselves and are out of touch with the real world.” I don’t know how true these cliched sentiments are; like Elizabeth I, I have no window into people’s souls. But I know something else - that they are irrelevant. Almost everybody in work is in it for themselves. Doctors, binmen, guys on the checkout at Lidl - none would be there if they weren’t being paid. And do you care what a dentist or mechanic knows about the real world? No. Why, then, do we put our trust into these people who are all in it for themselves and are out of touch with the real world? And why, so ofte [...]

2026-04-01

• Evaluating India's Energy Ambitions: Evidence from Electricity Generation Project-Level Data
  by Anurodh in Ajay Shah's blog, 2026-04-01 08:10:00 UTC

  by Upasa Borah, Akshay Jaitly and Renuka Sane . India's electricity demand has been growing rapidly, at 9% per annum since 2021 . Meeting this demand by 2030 would require around 777 GW of installed capacity, as estimated by the Central Electricity Authority (CEA). At the same time, India has committed to achieving 500 GW of installed non-fossil capacity by 2030. A study by CEEW (2025) finds that meeting this target would require adding around 56 GW of non-fossil capacity every year between 2025 and 2030, failing which India would need an additional 10 GW of coal-based capacity to meet future [...]

2026-03-30

• Transforming Corporate Governance to Improve Access to Medicines in the Global South
  by Padmashree Gehl Sampath, Öner Tulum, William Lazonick in INET Blog, 2026-03-30 15:41:00 UTC

  Affordable medicines remain out of reach for millions because pharmaceutical innovation is organized around value extraction, not public health. How do shareholder-driven governance and fragmented global health financing reinforce inequity, and what structural reforms are needed to reverse it? Every year, millions of people die in the Global South from causes that are entirely preventable. Many of these deaths could be averted with timely and affordable access to medicines. According to the World Health Organization (WHO), of the roughly 2.7 billi [...]

2026-03-25

• Neutral Rates of Interest in East Asia: The Interplay between Business and Financial Cycles
  by psiklos@wlu.ca (Pierre L. Siklos) in Asia Economics Blog, 2026-03-25 06:41:28 UTC

  Co-authors:  Dora Xia and Hongyi Chen   Evaluating the stance of monetary policy for the open economies of East Asia requires a different approach than that developed for the US.  In recent years, the discussion has centered around the concept of the neutral real interest rate, or r*. A commonly used definition of r* is the interest rate that prevails when economic slack is zero and inflation is stable. Observers then ask, by comparing r* with the existing policy rate, whether current monetary conditions are too accommodative or too restrictive. The neutral rate of interest is inherently unobs [...]

2026-03-19

• Electricity prices have increased and vary by region : The latest BLS data and recent research
  by ? in FRED blog, 2026-03-19 13:00:00 UTC

  Residential electricity prices have increased steeply in recent months, and there are noticeable geographical differences in prices. Our FRED graph above uses data from the US Bureau of Labor Statistics (BLS) to show just how high and variable electricity prices are: Between April 2020 and January 2026, country-wide average electricity prices increased by 44.4% . The average price of electricity was highest in the Northeast Census Region, at $0.265 per kilowatt-hour (kWh), and lowest in the South Census Region, at $0.164 per kWh. (For the states in the various Census regions, see this map .) [...]

• Sorry, right-wingers, higher inequality doesn't boost economic growth
  by Tibor Rutar in Political Economy, Stats, and Society, 2026-03-19 12:03:15 UTC

  It’s a classic talking point on the right that a country needs more inequality to grow faster. It’s one of the ostensible reasons why the dog-eat-dog US is ahead of egalitarian Europe. The basic idea, which I admit is intuitively plausible, is that relatively high inequality incentivizes effort and specifically rewards risk-taking. It should also just generally channel resources toward the most productive members of society, who then save and invest more. Hence, economic growth should get a boost. Conversely, too much equality dulls the entrepreneurial spirit or makes people slack off. And it’ [...]