At 1:59 p.m. EDT Wednesday, investors and analysts around the world will be poring over their computer and television screens in anticipation of the Federal Reserve’s latest policy decision, which could influence U.S. interest rates as well as stock, bond and currency markets around the world. Yet a new survey suggests that many U.S. households don’t follow Fed actions that closely. Almost half of Americans surveyed, 44%, said they didn’t know when the Fed most recently short-term interest rates, according to the survey by the personal finance website WalletHub. For the record, the Fed has raised its benchmark federal-funds rate twice this year, in March and in June, bringing it to a range between 1% and 1.25%. It is likely to leave the rate unchanged Wednesday. That’s not to say that people don’t have an opinion about the expected impact from an increase in interest Continue reading "Markets on Tenterhooks for Fed Policy Decision, But Many Households Aren’t Paying Much Attention"
The mortgage interest deduction, a sacred cow in the U.S. tax code, does nothing to promote homeownership, according to an academic paper released Monday, a finding that undermines one of the core justifications for the tax break. Letting taxpayers deduct mortgage interest encourages them to buy bigger homes and more expensive homes – but it doesn’t change that fundamental decision about whether to buy in the first place. “Over multiple time periods, and considering multiple empirical strategies, we find no effect of the tax policy change on whether households own or rent,” wrote the authors, Jonathan Gruber of the Massachusetts Institute of Technology, Henrik Kleven of Princeton University and Amalie Jensen of the University of Copenhagen. The paper uses data from Denmark in the 1980s, where the combination of a tax policy change and available housing data allowed the authors to observe a sort of natural experiment. Denmark Continue reading "Mortgage Interest Tax Break Has ‘No Effect’ on Homeownership, Study Finds"
In the fresh versus processed food wars, fresh fruits and vegetables are winning, thanks in part to their relatively cheap price tags. Since November 2008, the consumption of fresh fruits has grown 16.2%, while consumption of fresh vegetables is up 20.6%. Consumption of processed fruits and vegetables increased only 9.9% during the same time period, notes Eugenio J. Alemán, Wells Fargo senior economist, in a new report. “Consumers have rationally reacted to much higher prices on the processed side in relation to the fresh side,” Mr. Alemán said in an interview. “In relative terms, fresh fruits and fresh vegetables are cheaper today than processed fruits and vegetables are.” Processed fruits and veggies are in the “freezer aisle,” while fresh are not frozen, according to the Bureau of Economic Analysis. Prices of fresh fruits and fresh vegetables were on an upward trajectory leading up to the 2008 Continue reading "Eating Fresh Fruits and Veggies Is Easy When They’re Relatively Cheap"
- Multi-party kleptocracies rather than illiberal democracies - globalinequality
- U.S. Inflation Remains Low, and That’s a Problem - The New York Times
- Mobility Report Cards: The Role of Colleges in Intergenerational Mobility - NBER
- Achieving Statistical Significance with Covariates (Updated) - Marc Bellemare
- The Other Trilemma: Governing Global Finance - Cecchetti & Schoenholtz
- Shopping costs and one-stop shoppers intensify competition - VoxEU
- On the Origin of "Frequentist" Statistics - No Hesitations
- Agglomeration benefits versus firm selection - VoxEU
- Hayek, Deflation and Nihilism - Uneasy Money
- A Firming Recovery - Maurice Obstfeld
- The Marathon Game - Cheap Talk
- Norwegian Tax Law - EconoSpeak
- Lexit - mainly macro
"The latest round of falsehoods about health care, combined with the defamation of the C.B.O., may be gaining some political traction":
Health Care Is Still in Danger, by Paul Krugman, NY Times: Will Senate Republicans try to destroy health care under cover of a constitutional crisis? That’s a serious question, based in part on what happened in the House...
As you may remember, back in March attempts to repeal and replace the Affordable Care Act seemed dead after the Congressional Budget Office released a devastating assessment..., the House Republican bill would lead to 23 million more uninsured Americans. Faced with intense media scrutiny and an outpouring of public opposition, House leaders pulled their bill, and the debate seemed over.
But then media attention moved on to presidential tweets and other outrages — and with the spotlight off, House leaders bullied and bribed enough holdouts toContinue reading "Paul Krugman: Health Care Is Still in Danger"
- Some Pundit Meta On Our Twin Crises - Paul Krugman
- Fake News With Reporting on Disability - Dean Baker
- The ideology of "the market" - Stumbling and Mumbling
- The untapped potential of humanitarian economics - VoxEU
- Is Productivity Growth Becoming Irrelevant? - Adair Turner
- A new model of organization? - Understanding Society
- Refugees have little effect on native worker wages - VoxEU
- Markets Opened as Guild Monopolies Declined in the 16th Century - ProMarket
- Cronyism, & the demand for redistribution - Stumbling and Mumbling
- Can the Fed and ECB Work Together To Reduce Imbalances? - Brad Setser
Rhode Island hit a long-awaited milestone this year. The Ocean State finally has more jobs than it did before the nation tumbled into recession last decade. But nonfarm payrolls in June still lagged high-water marks set in 2008 or earlier in eight states struggling against headwinds like population loss and the manufacturing sector’s long-term decline: Alabama, Connecticut, Illinois, Michigan, Mississippi, New Mexico, Ohio and Wyoming. At the same time, unemployment rates were at all-time lows in six states, a mix of regions that are experiencing strong growth and other places with slower job gains and possible worker outflows: Arkansas, California, Colorado, North Dakota, Tennessee and Washington. Records for state unemployment rates go back to 1976. The U.S. as a whole appears to be at or near what economists consider full employment. But the latest data highlight the uneven state of local labor Continue reading "These Eight States Still Haven’t Regained All Their Lost Jobs"