Ryan Avent

The Fed needs to buy more Treasury bonds and securities. As money in circulation rises, so too will the value of spending.… More »

Transportation secretary Ray LaHood has been having himself a nice little trip around Europe over the past few days to see what he can learn from folks who know how to do rail right. The Spanish leg of the journey, which included a nice tour of the country's new high-speed rail network, prompted coverage from the New York Times, which noted:As has happened elsewhere, the high-speed train is stealing passengers from the airlines: The 2.5-hour route between Madrid…… More »

Today's must-read analysis comes from Tim Duy, who collects various circulating thoughts on the state of the macroeconomy into a remarkably clear post. Here's his bottom line:… More »

Fun new research:In this paper we investigate whether peers' behavior influences the choice of college major, thus contributing to the mismatch of skills in the labor market. Using a newly constructed dataset, we are able to identify the endogenous effect of peers on such decisions through a novel identification strategy that solves the common econometric problems of studies of social interactions. Results show that, indeed, one is more likely to choose a major…… More »

Daniel beat me to the punch on Simon Johnson's latest writing, but hopefully he won't mind if I add a few additional thoughts. As Daniel notes, Johnson is worried about inflation, primarily because he thinks America has become a lot more like an emerging market than your standard developed nation. Johnson writes:… More »

When telling a story, it's important to talk about past events in the past tense and present events in the present tense. Otherwise readers are likely to get very confused. This is true for economic stories, just as it is for fairy tales and mystery novels. Let's explore an example. Joe Weisenthal writes:… More »

It's extremely easy to get very deep in the weeds very quickly when talking about what's happening in the market for government bonds. "Steepening yield curve," is one of those signal phrases that informs 99% of the population that what follows will be intelligible or uninteresting, or both. But recent moves in the market for government debt have exercised insiders. Across the Curve's John Jansen got the blogosphere's attention, for instance, by writing:Maybe the…… More »

As Daniel Indiviglio mentions, the idea of a national sales tax -- similar to the value-added tax (VAT) typical in European countries -- has grown more popular in America as the scope of the federal government's budget mess has become clear. Daniel is quite skeptical that such a tax could be adopted in the short term:Don't get me wrong: a VAT has benefits as well -- particularly if you aren't bothered by the poor paying a greater share of their income to taxes. I…… More »

I'm a recovery optimist -- to me, the shoots are always greener -- but when I get nervous about the prospects for a strong return to growth, it's usually because I've been looking at oil prices. This is a personal hobbyhorse. Americans rely on oil to do a lot of stuff. Commute, obviously. To run errands, including those to pick up various goods shipped across the country by truck. To operate lawnmowers and gas grills and use any of the many, many household chemical…… More »

Really, it is. I'd just like to address a few additional comments from Will Wilkinson. He writes:Ryan evidently believes it is almost obvious that the structure of the strategic problem in securing global climate policy coordination is less complex than the problem of putting together standard-issue public goods, like a system of roads. In the case of global climate policy coordination, we're talking not about diffuse millions but a mere "handful of great powers,"…… More »

The Phoenix metropolitan area marks the easternmost edge of the smoking crater that is the epicenter of the housing bust. While nearly every market in America experienced at least a little frothiness in home prices during the bubble, Phoenix, along with Las Vegas, and California's Inland Empire, stumbled into a perfect bubble storm -- bubble conditions reflective of the tight housing markets along the coast combined with building rules facilitating a huge spike in…… More »

Greg Mankiw likes linking to this analysis (PDF) of employer-provided health coverage from CBO's Doug Elmendorf, in which it is said:[T]he costs of providing health insurance to their workers are not a competitive disadvantage for U.S.-based firms.He's done it before, and he does it again today. His goal is to demonstrate that the market sets total compensation levels, such that larger employer benefits must be accompanied by wage reductions, other things equal.…… More »

I know, that title promises all the verve of a library's reference room. Apologies, but my entry last week on how to think about the climate bill drew a few responses, and I thought I'd take the time to answer. First, to the main point of my post -- that if we can avoid imposing serious costs on other nations at a reasonable costs to ourselves, we should -- Jim Manzi replied:… More »

Tyler Cowen sent out the call for a cost-benefit analysis of the Waxman-Markey (W-M) climate bill making its way through Congress, and Jim Manzi (lately of the Atlantic, also of the American Scene and National Review) has responded. I have tangled with Jim on climate policy a number of times. We disagree very much about what ought to be done, but Manzi is a very rigorous thinker and worth engaging. And because he is so rigorous in his approach, his analysis of the…… More »

Megan has been making her case for allowing the perennially fiscally stressed state of California to default on its debt, should it come to that. It wouldn't be fun, she says (and really, it wouldn't), but saving California would eliminate the possibility of real reform of the state's budget process, which is absolutely necessary. It would also open up a giant can of moral hazard worms, which would wriggle their way through the mud of state and local budgets around…… More »

The New York Times' Andrew Martin has a big story today on how credit card companies are worried that Congress is going to put the kibosh on their big money making center -- big borrowers and balance carriers -- leading them to try and squeeze more out of the folks who pay off their bills every month. Ezra Klein remarks:The credit card industry, in recent years, has developed something of a tiered model. Good customers are treated extremely well. There are rewards…… More »

A lot of folks out there seem to be pretty worried about inflation, despite the fact that price levels have been flat for months and there's considerably slack in the economy. Some even manage to worry about hyperinflation, that is, extremely rapid and uncontrolled increase in the price level. This strikes me as extremely wrongheaded. It fails to place the current American debt-load in any kind of historical context, and more importantly, it posits a world where…… More »

A revealing disclosure -- one of the ways I've amused myself in recent months has been by tracking the movement of crude oil futures relative to stock indexes. As best I can tell, the two tend to like traveling in the same direction; oil rises when stocks rise and declines when stocks decline. This isn't too difficult to understand. Stocks jump on positive economic news, which also happens to boost expectations for future oil demand.… More »

It's hard to get too far into a discussion about what to do with the nation's large and troubled banks without someone bringing up Japan (or Sweden; they're both popular). In debates over bank policy, Japan has taken on talismanic properties, making it a sufficient answer to just about any difficult question. Why shouldn't we prop up struggling banks? Japan. Why should we nationalize insolvent institutions? Japan. What will happen if we ignore the lessons of Japan?…… More »