Using the pinch-point graph to estimate what prices would have been had inventories been lower at the end of 1998 is a blunt tool. We must assume that other variables in the market would not change. For instance, market sentiment can have a significant impact on prices. At a given level of inventories, if the outlook for the future is for a market deficit, then prices will tend to be high – or above the trend line.
Well-documented “demographic” changes have often been eclipsed by even more significant “psychographic” changes, and affluence, education, travel, media, globalization and new communications and information technology have allowed Canadians to transcend traditional demographic categories to define and redefine themselves in new ways.
Good, stable jobs with high earnings started to disappear from the United States economy in the late 1970s. The loss of the majority of these jobs resulted from structural changes, not cyclical variations in the manufacturing sector. Robert Forrant, of the University of Massachusetts Lowell, studies the machine tool industry's role in the decline of the US manufacturing base, focusing on Japan's ability to surpass the United States in efficient production and the adoption of new technology.
Traditional economic models have largely failed to account adequately for the roles of moneyand finance in economic operations. For example, traditional models assume an exogenouslydetermined, fixed money stock and ignore the outcomes of spending changes that result fromchanges in bank loans. As such, traditional models take place outside of historical time and haveno role for institutions in determining economic outcomes other than to promote optimizingbehavior. In this working paper, Distinguished Scholar Wynne Godley presents a formalizedstock-flow model consistent with the ideas of Keynes, Kaldor, and especially Hicks. Godley'smodel takes place in historical time and under conditions of uncertainty and incorporates a rolefor the financial sector in providing funding for both capital investment and firm operations,should expectations prove false. The model was subjected to numerical simulation and foundsolvable and stable.
This paper uses industrial wage data and a systematic if unconventional selection of methods to examine changes in the inter-industry structure of wages between 1920 and 1947. We first sort among the available data on wage change by industry and occupation for blocs that exhibit common patterns of wage changes over time, reducing the 83 time series available to us into eight distinct groups. Following this, we present a systematic decomposition of the sources of wage variation across groups and through time. The fact that our cluster analysis relies on wage-change observations in percentage form implies that our discriminant analysis produces eigenvectors in time-series format; thus each eigenvector is itself an artificially constructed economic time series. We identify four such forces that together explain 97 percent of the variance in wage change across groups, and identify variables in the historical record that appear to correspond closely to these forces.
The Great Recession had a tremendous impact on low-income Americans, in particular black and Latino Americans. The losses in terms of employment and earnings are matched only by the losses in terms of real wealth. In many ways, however, these losses are merely a continuation of trends that have been unfolding for more than two decades. We examine the changes in overall economic well-being and inequality as well as changes in racial economic inequality over the Great Recession, using the period from 1989 to 2007 for historical context. We find that while racial inequality increased from 1989 to 2010, during the Great Recession racial inequality in terms of the Levy Institute Measure of Economic Well-Being (LIMEW) decreased. We find that changes in base income, taxes, and income from nonhome wealth during the Great Recession produced declines in overall inequality, while only taxes reduced between-group racial inequality.
This paper describes the transformations in federal classification of ethno-racial information since the civil rights era of the 1960s. These changes were introduced in the censuses of 1980 and 2000, and we anticipate another major change in the 2020 Census. The most important changes in 1980 introduced the Hispanic Origin and Ancestry questions and the elimination of two questions on parental birthplace. The latter decision has made it impossible to adequately track the progress of the new second generation. The change in 2000 allowed respondents to declare origins in more than one race; the anticipated change for 2020 will create a single question covering race and Hispanic Origin—or, stated more broadly, race and ethnic origin. We show that the 1980 changes created problems in race and ethnic classification that required a “fix,” and the transformation anticipated for 2020 will be that fix. Creating the unified question in the manner the Census Bureau is testing will accomplish by far the hardest part of what we believe should be done. However, we suggest two additional changes of a much simpler nature: restoring the parental birthplace questions (to the annual American Community Survey) and possibly eliminating the Ancestry question (the information it gathered will apparently now be obtained in the single race-and-ethnicity question). The paper is historical in focus. It surveys how the classification system prior to 1980 dealt with the tension between ethno-racial continuity and assimilation (differently for each major type of group); how the political pressures producing the changes of 1980 and 2000 changed the treatment of that tension; and, finally, the building pressure for a further change.
The Federal Reserve has been criticized for not forestalling the financial crisis of 2007–09, and for its unconventional monetary policies that have followed. Its critics have raised questions as to whom, if anyone, reins in the Federal Reserve if and when its policies are misguided or abusive. This paper traces the principal changes in governance of the Federal Reserve over its history. These changes have, for the most part, developed in the wake of economic upheavals, when Fed policy has been challenged. The aim is to identify relevant issues regarding governance and to establish a basis for change, if needed. It describes the governance mechanism established by the Federal Reserve Act in 1913, traces the passing of this mechanism in the 1920s and 1930s, and assays congressional efforts to expand oversight in the 1970s. It also considers the changes in Fed policies induced by the financial crisis of 2007–09 and the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. It concludes that the original internal governance mechanism, a system of checks and balances that aimed to protect all the important interest groups in the country, faded in the 1920s and was never adequately replaced. In light of the Federal Reserve’s continued growth in power and influence, this deficiency constitutes a threat not only to “stakeholders” but also to the independence of the Federal Reserve itself.
On the , Peter Thiel, co-founder of PayPal, early investor in Facebook, and president of Clarium Capital, discusses the stagnation of technological innovation. Thiel gives reasons why innovation has slowed recently — offering examples of stalled sectors such as space exploration, transportation, energy, and biotechnology — while pointing out that growth in internet-based technologies is a notable exception. He aslo comments on political undercurrents of Silicon Valley, government regulation, privacy and Facebook, and his new fellowship program that will pay potential entrepreneurs to “stop out” of school for two years.
The aim of the paper is to provide an overview of the current stock-flow consistent (SFC) literature. Indeed, we feel the SFC approach has recently led to a blossoming literature, requiring a new summary after the work of Dos Santos (2006) and, above all, after the publication of the main reference work on the methodology, Godley and Lavoie’s (2007). The paper is developed along the following lines. First, a brief historical analysis investigates the roots of this class of models that can be traced as far back as 1949 and the work of Copeland. Second, the competing points of view regarding some of its main controversial aspects are underlined and used to classify the different methodological approaches followed in using these models. Namely, we discuss (1) how the models are solved, (2) the treatment of time and its implication, and (3) the need—or not—of microfoundations. These results are then used in the third section of the paper to develop a bifocal perspective, which allows us to divide the literature reviewed according to both its subject and the methodology. We explore various topics such as financialization, exchange rate modeling, policy implication, the need for a common framework within the post-Keynesian literature, and the empirical use of SFC models. Finally, the conclusions present some hypotheses (and wishes) over the possible lines of development of the stock-flow consistent models.