Marginal and Average Explains Inflation Changes
The annualized month-to-month inflation (AMM) and the year over year rate (YOY) are the marginal and average. AMM > YOY, YOY should rise. Continue Reading →
Category Archives: Economic basics
Wall Street Journal Exchange Rate Fail
Wall Street Journal exchange rate fail. Ms. Feng thinks an exchange rate change from 7￥/$ to 6.9￥/$ is a ￥depreciation. That’s backwards. Continue Reading →
Money, Velocity, Levels, and Changes
Why did velocity decrease during the pandemic? What was the impact on monetary policy? How is the growth rate of M2 related to its level? Continue Reading →
Iowahawk Teaches Econ 1
If you never understood basic economics, David Burge (@IowahawkBlog) has put together a pretty convincing tutorial. Iowahawk teaches econ 1. Continue Reading →
Will There Be a Wine Shortage in 2021?
My guess: the global price elasticity for wine is -0.7. If 2021 output falls by 4.6%, the global price should rise by 6.5%. No wine shortage. Continue Reading →
Jason Furman on the Minimum Wage
Dr. Furman makes a basic mistake in the following thread about the minimum wage. See if you can spot the error. Continue Reading →
Robert Mundell 1932-2021
Robert Mundell passed away over the weekend of April 3. He was 88 years old. We have lost another giant of economics. Continue Reading →
The Optimum Quantity of IRS Tax Enforcement
Prof. Hamilton posted a thread on calculating the optimum quantity of IRS tax enforcement. That is less than 100% of potential revenue. Continue Reading →
Demand Curve Shifts
There are many factors that can cause demand curve shifts. I want to focus on two factors: income and the prices of related goods. Continue Reading →
Creative Destruction in Action: Competition for Amazon
We are witnessing an example of creative destruction in action: competition for Amazon. Walmart is moving into their territory in a big hurry. Continue Reading →