Archive for the ‘Krugman’s Blog’ Category

Krugman’s blog, 9/19/14

September 20, 2014

There were three posts yesterday.  The first was “John Boehner’s Theory of the Leisure Class:”

And, I’m back — I’ve been in a grueling battle against deadlines, which is not quite over, so blogging may remain scarce for a while longer. But I’m sticking my toe in for the moment — and whaddya know, oops, he did it again. John Boehner says that unemployed Americans are pretty clearly malingerers, bums on welfare who have decided that they don’t feel like working:

“This idea that has been born, maybe out of the economy over the last couple years, that you know, I really don’t have to work. I don’t really want to do this. I think I’d rather just sit around. This is a very sick idea for our country,” he said.
“If you wanted something you worked for it,” Boehner said, adding, “Trust me, I did it all.”

I could point to the overwhelming economic evidence that nothing like this is happening — after all, if what we were seeing was a mass withdrawal of labor supply, we should be seeing wages for those still willing to work taking off. What we actually see is this:

 

I could also point to zero interest rates and low inflation as evidence that we’re living in a demand-constrained economy. I could ask how, exactly, Boehner believes that increased willingness to work would conjure more jobs into existence.

But what really gets me here is the fact that people like Boehner are so obviously disconnected from the lived experience of ordinary workers. I mean, I live a pretty rarefied existence, with job security and a nice income and a generally upscale social set — but even so I know a fair number of people who have spent months or years in desperate search of jobs that still aren’t there. How cut off (or oblivious) can someone be who thinks that it’s just because they don’t want to work?

When I see stuff like this, I always think of the opening of The Treasure of the Sierra Madre:

Anyone who is willing to work and is serious about it will certainly find a job. Only you must not go to the man who tells you this, for he has no job to offer and doesn’t know anyone who knows of a vacancy. This is exactly the reason why he gives you such generous advice, out of brotherly love, and to demonstrate how little he knows the world.

Yesterday’s second post was “Phoney Baloney (Personal and Trivial):”

Just to say: What is it with the huge lines waiting for the new iPhone? Yes, smartphones are quite useful and sometimes even fun; I’m not a heavy app user, but I’m still on the thing many times a day. But even if the iPhone 6 has nifty new features, how can you get so excited over something that is, when all is said and done, an incremental change?

OK, I guess there’s a social aspect — after all, I’ve never been able to get enthusiasm over cars, either. Although if there were flying cars on sale … but what we actually got was 140 characters.

Also, you kids get off my lawn.

And as usual the work week ended with music.  Here’s “Friday Night Music: Cheryl Wheeler, Summer Fly:”

Now that I’m revisiting … I couldn’t find a live performance with good sound, so here’s the record performance. I think this was my favorite song of hers; resonates with a lot:

 

Krugman’s blog, 9/15/14

September 16, 2014

There were three posts yesterday.  The first was “Cosmic Cato Koch Convergence:”

It’s one of those mornings when several small items I was thinking about blogging about have, oddly, merged into a single story.

I’ve been getting some mail in response to today’s column from people saying (by and large politely) that they predicted the crisis — by which, it turns out, they mean that they correctly diagnosed a housing bubble. Well, so did I — but I nonetheless don’t consider myself to have predicted the crisis, because I had no idea that the consequences of a burst bubble would be as cataclysmic as they were.

That said, even pointing out the bubble got you heckled; I still treasure the sneering piece by John Hinderaker insisting that the only reason I thought there was a bubble was because I hated Bush. Well, who knew — Hinderaker is still out there, as I learn from Bonddad (via the still invaluable Mark Thoma).

But why is he still out there? In part because being wrong is actually a virtue in the eyes of some people, as long as it’s the right kind of wrong. And those people have money and power: I’d actually forgotten about this, but the Koch brothers tried to install Hinderaker on the board of Cato, which they viewed as insufficiently hackish.

Still, think tanks are one thing; this doesn’t happen in the world of scholarship. Oh, wait. Via Daniel Kuehn, we know now that the Kochs sought to control economics hiring at Florida State University. And you have to wonder how much this sort of thing goes on — usually, one suspects, more subtly and implicitly, without as clear a paper trail.

In the 1940s moneyed interests made an initially successful effort to block the teaching of Keynesian economics, although Samuelson somehow slipped through. If you don’t think that similar things can happen now, you’re naive — and the rich are richer and more powerful now than they were then.

Yesterday’s second post was “Replaying the 30s in Slow Motion:”

When the 2008 crisis struck, anyone who knew even a bit of history had nightmares about a replay of the 1930s — not just the depth of the depression, but the downward political spiral into dictatorship and war. But this time was different: the banking crisis was contained, the plunge in output and employment leveled out, and modern Europe’s democratic political culture proved more resilient than that of the interwar years. All clear!

Or maybe not.

In terms of the economics, an effective crisis response was followed by a wrong-headed turn to austerity and, in Europe, a combination of bad monetary policy with a currency system that in some ways is turning out to be worse than the gold standard. The result is that while the first few years of this crisis were far better than the 1930s, at this point Europe’s economic performance is actually worse than it was in 1935.

And the political scene is eroding. One European nation has already reached the point where its leader openly declares his intention to end liberal democracy; thanks to austerity, extremist parties are gaining ground in elections, with Sweden (which squandered its early success) the latest shocker; and of course separatist movements are scaring everyone.

We’re still nowhere like the 30s politically. But you do start to wonder whether self-congratulation over the political handling of Depression 2.0 will eventually look as foolish as the economic optimism of a few years ago.

The last post yesterday was “More Than My Head Talks:”

OK, I didn’t actually think I was giving a big talk this week, but one thing led to another and we will have a public lecture at Hunter College this Wednesday. I wonder what it will be about?

Krugman’s blog, 9/14/14

September 15, 2014

There was one post yesterday, “Wild Words, Brain Worms, and Civility:”

Noah Smith writes that one should not be rude about people you disagree with, because they might turn out to be right. Indeed; what possible purpose can be served by, say, referring to Austrian economics as a brain worm? Oh, wait.

Actually, I think that Noah was doing the right thing when he brought in the brain worms, and is off on the wrong track on the civility thing. So let me make the case for brain worms.

First, picturesque language, used right, serves an important purpose. “Words ought to be a little wild,” wrote John Maynard Keynes, “for they are the assaults of thoughts on the unthinking.” You could say, “I’m dubious about the case for expansionary austerity, which rests on questionable empirical evidence and zzzzzzzz…”; or you could accuse austerians of believing in the Confidence Fairy. Which do you think is more effective at challenging a really bad economic doctrine?

Beyond that, civility is a gesture of respect — and sure enough, the loudest demands for civility come from those who have done nothing to earn that respect. Noah felt (and was) justified in ridiculing the Austrians because they don’t argue in good faith; faced with a devastating failure of their prediction about inflation, they didn’t concede that they were wrong and try to explain why. Instead, they denied reality or tried to redefine the meaning of inflation.

And if you look at the uncivil remarks by people like, well, me, you’ll find that they are similarly aimed at people arguing in bad faith. I talk now and then about zombie and cockroach ideas. Zombies are ideas that should have been killed by evidence, but keep shambling along — e.g. the claim that all of Europe’s troubled debtors were fiscally irresponsible before the crisis; cockroaches are ideas that you thought we’d gotten rid of, but keep on coming back, like the claim that Keynes would never have called for fiscal stimulus in the face of current debt levels (Britain in the 1930s had much higher debt to GDP than it does now). Well, what I’m doing is going after bad-faith economics — economics that keeps trotting out claims that have already been discredited.

Nor are zombies and cockroaches the only kinds of bad faith; the worst, as far as I’m concerned, involves refusing to take responsibility for your actual statements. “The failure of high inflation to materialize doesn’t mean that I was wrong, because I only said that there was a risk of inflation”. “When I said that Obamacare spending adds a trillion dollars to the deficit, I wasn’t misleading readers, because I didn’t actually deny that the ACA as a whole reduces the deficit.” And of course, people who engage in that kind of bad faith screech loudly about civility when they’re caught at it.

When there’s an honest, good-faith economic debate — say, the ongoing controversy about the effects of quantitative easing — by all means let’s be civil. But in my experience demands for civility almost always come from people who have forfeited the right to the respect they demand.

Krugman’s blog, 9/12/14

September 13, 2014

There were two posts yesterday.  The first was “Maastricht in a Kilt:”

Simon Wren-Lewis says more clearly what I’ve been trying to get at with regard to the economics of Scottish independence. It would be one thing to make the sober case that independence is worth it despite the economic costs and risks; but the SNP has been claiming that there are no costs and risks, which is just wrong.

As he says, the obvious parallel is the push for the euro; in pursuit of the political vision of European unity, leaders waved away the obvious economic problems. I don’t know how many times I encountered arguments along the lines of “You Americans are only raising these objections because you don’t want a competitor to the dollar”, which wasn’t the point at all. And sure enough, the euro has turned into one of the great economic disasters of history, dealing a devastating blow to the very cause of European unity it was supposed to serve.

It so happens that some of the economic issues involving Scottish independence are the same: euro enthusiasts insisted that there would be no problem in creating a unified currency without a unified government, the SNP is insisting that there is no problem with maintaining a unified currency while breaking up the United Kingdom. But there is even less excuse this time around, since we have the euro experience to enlighten us.

If Scottish voters won’t support independence unless they can keep the pound, then a Yes vote next week will have been won on false pretenses. Don’t go there!

Yesterday’s second post was musical, “Friday Night Music: Cheryl Wheeler:”

For some reason I’ve been taking a music trip down memory lane, back to the late 80s, when I was listening a lot to several singer-songwriters — Suzanne Vega, Shawn Colvin, Patty Griffin, and Cheryl Wheeler; this song is as gorgeous as I remembered:

Krugman’s blog, 9/11/14

September 12, 2014

There were two posts yesterday.  The first was “Mememe blogging:”

More of my Business Insider interview, this time about monetary policy, here.

Tomorrow there’s a conference on Rethinking Economics at NYU, live streaming here. I’ll be talking about bad macro with Willem Buiter and Jamie Galbraith from 1 to 2:30.

The second post yesterday was “Their Own Imaginary Keynes (Wonkish):”

Lars Syll approvingly quotes Hyman Minsky denouncing IS-LM analysis as an “obfuscation” of Keynes; Brad DeLong disagrees. As you might guess, so do I.

There are really two questions here. The less important is whether something like IS-LM — a static, equilibrium analysis of output and employment that takes expectations and financial conditions as given — does violence to the spirit of Keynes. Why isn’t this all that important? Because Keynes was a smart guy, not a prophet. The General Theory is interesting and inspiring, but not holy writ.

It’s also a protean work that contains a lot of different ideas, not necessarily consistent with each other. Still, when I read Minsky putting into Keynes’s mouth the claim that

Only a theory that was explicitly cyclical and overtly financial was capable of being useful

I have to wonder whether he really read the book! As I read the General Theory — and I’ve read it carefully — one of Keynes’s central insights was precisely that you wanted to step back from thinking about the business cycle. Previous thinkers had focused all their energy on trying to explain booms and busts; Keynes argued that the real thing that needed explanation was the way the economy seemed to spend prolonged periods in a state of underemployment:

[I]t is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable. Indeed it seems capable of remaining in a chronic condition of subnormal activity for a considerable period without any marked tendency either towards recovery or towards complete collapse.

So Keynes started with a, yes, equilibrium model of a depressed economy. He then went on to offer thoughts about how changes in animal spirits could alter this equilibrium; but he waited until Chapter 22 (!) to sketch out a story about the business cycle, and made it clear that this was not the centerpiece of his theory. Yes, I know that he later wrote an article claiming that it was all about the instability of expectations, but the book is what changed economics, and that’s not what it says.

The point is that Keynes very much made use of the method of temporary equilibrium — interpreting the state of the economy in the short run as if it were a static equilibrium with a lot of stuff taken provisionally as given — as a way to clarify thought. And the larger point is that he was right to do this.

When people like me use something like IS-LM, we’re not imagining that the IS curve is fixed in position for ever after. It’s a ceteris paribus thing, just like supply and demand. Assuming short-run equilibrium in some things — in this case interest rates and output — doesn’t mean that you’ve forgotten that things change, it’s just a way to clarify your thought. And the truth is that people who try to think in terms of everything being dynamic all at once almost always end up either confused or engaging in a lot of implicit theorizing they don’t even realize they’re doing.

In fact, IS-LM works just fine with Minksyism! At each point in time we think of r and y reaching a short-run equilibrium, but we also think of the IS curve moving over time as investors forget the past, leverage rises, and the Wile E. Coyote moment approaches.

I guess the problem is that too many economists have the wrong attitude toward models. They’re not Truth; they’re intuition pumps, gadgets you use to clarify your story. You go badly wrong when you take them too seriously, and either forget that they’re just models or reject them because the world isn’t that simple.

Krugman’s blog, 9/10/14

September 11, 2014

There was one post yesterday, “Even More on Scotland:”

I’m going on Channel 4 in a couple of hours, and doing more homework. One thing that is likely to come up is the fact that some reputable economists (pdf) have concluded that Scotland-on-the-pound would be OK. What’s my answer?

It is, in short, that this analysis doesn’t seem to reflect the unpleasant things we’ve learned from the euro crisis. To be blunt, the reassurances from the working group sound like the kind of thing euro defenders used to say pre-2010. Unfortunately, we’ve discovered that sharing a currency without sharing a government is a lot more dangerous than even euro skeptics realized.

We are told, for example, that Scotland need not worry because its fiscal position is relatively strong. But that was true — or appeared to be true — of Spain and Ireland before the euro crisis. What we’ve learned, alas, is that a seemingly strong fiscal position can evaporate very fast in a crisis — especially if banks need to be bailed out. In that context, it’s interesting to note that Scotland’s banks are very big relative to the size of the country, because they serve much of the UK. Nothing wrong with that as long as you have a political union; but without, what’s to prevent an Irish-type situation in which a small country is trying to bail out big banks?

We’re also told that the Bank of England would of course provide liquidity — in effect, act as lender of last resort — to Scottish banks. Are we sure about this? It took the ECB years to step up to the plate in the euro crisis, in part because it turned out that you needed a lender of last resort to governments as well as fInancial institutions; even now, the ECB’s efforts rely to an important extent on a bluff, in the sense that nobody knows what would happen if OMT were actually required. Assuming that England — possibly an England run by a Conservative-UKIP coalition! — would be there when needed is a big leap of faith.

An earlier version of this blog post misspelled the given name of the president of the National Front in France. It is Marine Le Pen, not Marie.

Let me say that I do understand why some people would like to be out of David Cameron’s UK — just as some of us coastal liberals occasionally wonder what America could be like without the old Confederacy. But getting currency realities right is crucial. The European project is a noble idea, and the euro is a grand gesture in support of that idea — but the willingness to ignore macroeconomics for the sake of that grand gesture may end up making Marine Le Pen president of France. You really have to get these things right, or else.

Krugman’s blog, 9/9/14

September 10, 2014

There were two posts yesterday.  The first was “Scotland and the Euro Omen:”

Let me restate and possibly clarify the points from yesterday’s column:

Declaring Scotland independent would mean a big disruption of existing economic and financial arrangements. As Simon Wren-Lewis says, the preponderance of professional economic opinion is that this disruption would leave Scotland worse off, but that is a point we can argue. However, that is not the argument the independence movement is making; what they have been telling voters is that there would be no disruption — in particular, that Scots could continue using the pound, and that this would pose no problem.

This is an astonishing claim to make at this point in history. Economists (starting with my late colleague and friend Peter Kenen) have long argued that sharing a currency without fiscal integration is problematic; the creation of the euro put that theory to the test. And the results have been far worse than even the harshest critics of the euro imagined, with euro Europe doing worse at this point than Western Europe did in the 1930s:

And an independent Scotland using the British pound would arguably be in even worse shape. Europe has somewhat stabilized recently thanks to Mario Draghi’s support for debtor countries — but Draghi is able to do this, in large part, because he is answerable to the whole euro area, not just Germany. An independent Scotland would be dependent on the kindness of the Bank of, um, England, with no say whatsoever in that bank’s policy.

I’ve read quite a lot of the independence literature, and it shows no appreciation for the dangers involved. What Scottish voters should do is look hard at the experience, just across the North Sea, of divorcing currency from statehood; it’s not encouraging.

Yesterday’s second post was “The Structural Fetish:”

The FT has a pretty decent article on the emerging doctrine of “Draghinomics”, which looks a lot like Blanchardnomics, which looks a lot like Krugmanomics — hey, we all studied macro at MIT in the mid 1970s. But I was struck by this bit:

One other senior eurozone official attending the Italian forum which gathers together policy makers, business people and academics said: “Structural reforms are key. Those countries that have made these efforts are performing better: Ireland, Spain and Portugal. Italy and France should think a little bit about this.”

Yep, Spain offers a useful lesson for France:

For those of us not part of the structural reform cult, the story of Spain is this: the country experienced a full-scale depression when its housing bubble burst; this depression has led to a gradual, painful “internal devaluation” as labor costs come down, making Spain more competitive within Europe; and as a result, Spain is finally starting a slight recovery, with its growth rate in recent quarters (but only in recent quarters) higher than France. To see this as a triumph of structural reform requires preconceptions so strong it’s hard to see why you would even bother looking at data.

Krugman’s blog, 9/8/14

September 9, 2014

There were two posts yesterday.  The first was “The Trillion Dollar Zombie:”

I’ve often remarked on the remarkable tenacity of the inflationista doctrine (Santellinomics? CNBCnomics?) among investors, given the fact that believing the people who have been warning about soaring inflation and interest rates would have lost you a lot of money. How much money? Cordell Eddings at BrookingsBloomberg puts a number to it: $1 trillion in gains on U.S. government bonds since QE began. Actually, this is arguably a low estimate; if you really believed in this stuff, you wouldn’t just have failed to hold US debt, you would have bet against it — as, for example, John Paulson (as described in the article) and Eric Cantor did.

And let’s be clear: those of us who understood the nature of liquidity traps predicted low rates of both interest and inflation from the beginning — in the face of loud declarations that this was absurd, that big deficits and rapid expansion of the monetary base would of course be inflationary. This has to be one of the most dramatic examples in the history of economics of a surprising, successful prediction.

Yet as far as I can tell, not one of the people who signed the infamous 2010 letter accusing Bernanke of debasing the dollar has admitted having been wrong, or shown even a hint of reconsidering. More to the point, perhaps, the doctrine has retained much of its hold. Look at the comments on that Bloomberg piece; most of them either declare that we do too have high inflation, but the feds are hiding it in Area 51, or that the data don’t matter because the Fed is manipulating rates (hey, it can do that without adverse consequences? Then why not?)

As I’ve written on a number of occasions, I think it’s fundamentally about affinity fraud. The consumers of this stuff like the attitude of the inflationistas — their hostility to helping the poor, their disdain for snooty professors, etc. And so they trust them no matter how bad their past results have been.

Yesterday’s second post was “My Head Talks About Minimum Wages:”

I did an interview over at Business Insider, and various pieces will be appearing over the next few days. The discussion of minimum wages is here.

Krugman’s blog, 9/6/14

September 7, 2014

There was one post yesterday, “A Note on the Dynamics of Misinformation:”

Very busy, so no substantive posting today. But I did want to share a thought from the past few days. I posted about the surprisingly good news, at least so far, on Obamacare premiums for 2015 — and as usual was met with a wall of rage from the right. The idea that this thing might be working inspires a level of anger nothing else (except maybe climate science) matches.

No news there. Nor is it news that such people know things that ain’t so. But there’s something I’ve noticed from the combination of reactions to what I write and researching past coverage of Obamacare. It goes like this: a lot of the untrue beliefs people have about Obamacare come not so much from outright false reporting as from selective reporting. Every suggestion of bad news gets highlighted — especially, of course, but not only by Fox, the WSJ, etc.. But when it turns out that the news wasn’t really that bad, these sources just move on. There are claims that millions of people are losing coverage — headlines! When it turns out not to be true — crickets! Some experts claim that premiums will rise by double digits — big news! Actual premium numbers come in and they’re surprisingly low — not mentioned.

The result is that most news consumers — who form impressions rather than trying to work out details — have the sense that it’s been all bad news. This is true even for people who don’t rely on Fox — I get asked about the scary premium hikes by people on the Upper West Side! And of course for those who do get their news from Fox, well, they know, just know, that Obamacare has reduced the number of Americans with insurance and caused premiums to double or something, even though even their favorite news source isn’t saying such things.

We need a term for beliefs based on reports that have been superseded; maybe fossils instead of zombies. Anyway, it’s striking.

Krugman’s blog, 9/5/14

September 6, 2014

There were five posts yesterday.  The first was “Obamacare Life Spiral:”

 

Ezra Klein directs us to the latest from the Kaiser Family Foundation, which asks what the average Obamacare 2015 premium increase will be for those places for which we have full information — and finds that premiums will actually decline slightly. Ezra tries to get us to appreciate just how good the Obamacare news has been with a thought experiment:

Imagine taking a time machine back to 2010 and telling Republicans in Congress, who were arguing that the CBO was wildly underestimating Obamacare’s cost, that the law would be cheaper than predicted and, at least in the states that accepted its Medicaid dollars, cover more people than the Congressional Budget Office thought. After the laughing and mocking and the calling of security, let’s say you offered this prediction in the form a of a bet. What odds do you think Obamacare’s critics would have offered? 2:1? 5:1? 10:1?

But you don’t have to go back to 2010. Look at John Cochrane in late 2013, taking it for granted that Obamacare would implode in a death spiral within a few months. Look at The Hill just four months ago, telling us that double-digit premium hikes were coming.

One question we might ask here is, why is the news so good? The answer, I’d suggest — although I hope the real experts will weigh in — is that we’re actually seeing the opposite of a death spiral; call it a life spiral. For one thing, the huge surge in enrollments late in the day meant that the risk pool this year is better than insurers expected, and they now expect 2015 to be better still. Also, importantly, big enrollments mean that more insurers are entering the market, increasing competition. And, of course, the better the deal the more people will sign up: success feeds success.

Another question we might ask: Is our conservatives learning? Are those who bought into the death spiral stories, who seized on every hint of bad news, asking themselves how they got it so wrong? Are they, maybe, considering the possibility that they’re listening to the wrong people, that maybe Jon Gruber knows what he’s talking about and John Goodman is a hack?

Hahahaha.

Yesterday’s second post was “Simply Unacceptable:”

Chris Dillow makes a good point about economics and maybe public affairs in general: There is often a tendency to go for simple stories that aren’t true –as H.L. Mencken said, “For every complex problem there is an answer that is clear, simple, and wrong.” But it also often happens that the answer is simple, but people refuse to accept that simple answer. That is, the reverse of Mencken’s proposition also applies: For every simple problem there is an answer that is murky, complex, and wrong.

Dillow uses stock-picking as an example; I find myself thinking (surprise) about macroeconomics. Why is output so low and jobs so scarce? The simple answer is inadequate demand — and every piece of evidence we have is consistent with that answer. But Very Serious People pretty much refuse to accept that simple answer; it must be a workforce with the wrong skills (so where are the premium wages for workers with the right skills?), geographic mismatch (where are the states with booming wages?), and so on. It must, they insist, be a difficult problem with no easy answers — when everything says that “spend more” is the answer, full stop.

A lot of this is political — demand-side stories are inconvenient for those who want to use the slump as an excuse to dismantle social protections etc. But I don’t think that’s all of it; there is a deep desire on the part of people who want to sound serious to believe that big problems must have deep roots, and require many hours of solemn deliberation by bipartisan panels.

So how do you know whether public discourse on an issue is ignoring the complexities or introducing gratuitous complexity? Do your homework! It’s really that simple.

The third post yesterday was “Elizabeth II (and Me):”

Well, they messed up the livestream of my dialogue with Elizabeth Warren, but here it is as video on demand.

Yay!  I can’t urge you strongly enough to watch this.  Fourth up yesterday was “The Beveridge That Refreshes:”

Claims that there is a huge “skills gap”, that much of our unemployment is structural, reflecting an inadequately prepared work force or something like that, generally rest on claims that we have an unusual situation in which many jobs are vacant even as many workers remain unemployed. For example, at the beginning of this year Jaime Dimon co-authored a piece on the alleged skills gap that began,

Today, nearly 11 million Americans are unemployed. Yet, at the same time, 4 million jobs sit unfilled. This is the “skills gap”—the gulf between the skills job seekers currently have and the skills employers need to fill their open positions.

Of course, there are always both unfilled job openings and unemployed workers; claims of an exceptional skills gap would only have some justification if the tradeoff between unemployment and vacancies — the so-called Beveridge curve — had worsened substantially. And for a while there were many claims that this had in fact happened.

But some analysts argued that this was a misreading of the data — the Beveridge curve always looks worse during a recession and the early stages of recovery, then returns to normal as recovery proceeds. And sure enough, researchers at the Cleveland Fed find that the supposed shift in the Beveridge curve has vanished:

 

And, refreshingly, they even indulge in a bit of discreet and forgivable snark:

Observers have followed the Beveridge curve during the recession and the recovery to glean some insight into potential structural changes in the labor market. Whether or not a shift implies an actual structural change—specifically, a decline in the matching efficiency of the labor market—is still debatable. However, one thing is clear: there is no shift to begin with.

He ended the week, as usual, with music.  Here’s “Friday Night Music: Lucius Covers Lennon:”

I was going to do something clever and all, but my heart wasn’t in it after a very tough week. Here’s one of my favorite bands doing a lovely cover:


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