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Inflation

Four Forces Facing the Global Economy

Olivier Blanchard | Posted 04.14.2015 | Business
Olivier Blanchard

Behind the numbers lies an unusually complex set of forces shaping the world economy. Some, such as the decline in the price of oil and the evolution of exchange rates, are highly visible. Some, from crisis legacies to lower potential growth, play more of behind-the-scenes role but are important nevertheless. Let me briefly review them.

The Terrible Twos: Central Bank Inflation Targets

Dean Baker | Posted 04.06.2015 | Business
Dean Baker

The March job numbers came in somewhat worse than most analysts had expected. The slower job growth was largely attributable to unusually bad weather in late February and early March, but most of the commentators seem to be missing this fact. Many are warning that the economy might be weaker than they thought. These warnings from commentators are in fact good news. They are good news first because it is almost certainly true that the economy is weaker than these analysts thought. Many had been making silly pronouncements about a new American boom that was not based in any real understanding of the economy. It's always best when the people who are determining economic policy have some idea of the actual state of the economy. The other reason the warnings are good news is that they may slow down the Federal Reserve Board's rush to raise interest rates.

On the Great Inflation Canard

Steve H. Hanke | Posted 04.02.2015 | World
Steve H. Hanke

Recall that the world of that era was one in which the fixed exchange rates ruled the roost. That's not today's world. Indeed, many important currencies now float. Since the world adopted a flexible exchange-rate "non-system", changes in inflation can strike like a lightning bolt.

The Abuse of Faculty at California's Public Universities

Stafford Betty | Posted 04.03.2015 | College
Stafford Betty

I have been teaching at Cal State Bakersfield, one of the 23 campuses of the once proud California State University (CSU) system, for over 40 years, and I've watched a steady erosion in faculty support since 2004.

Remember Inflation?

Terry Savage | Posted 03.30.2015 | Politics
Terry Savage

The inflationary period of the late 1970s is such ancient history that we even have people hoping that a "bit" of inflation -- in wages, in prices -- will help the economy grow. But here are five reminders from history about how inflation destroys savings and value.

Why the Global Economy Continues to Sputter

Kevin Price | Posted 03.19.2015 | Business
Kevin Price

Every part of an economy is aggressively pursuing the necessary capital to continue to grow. When governments crowd out that necessary capital in deficits, debt, and interest on the debt, economies cannot help but struggle where ever such policies exist.

No Excuse for Fed to Increase Unemployment by Raising Interest Rates: Movement to Hold Fed Accountable Gathers Steam

Mark Weisbrot | Posted 03.18.2015 | Politics
Mark Weisbrot

If America is to shed the title of "Land of Inequality," this is how it is going to happen: by more people becoming aware of how the Fed's monetary policy affects them and demanding that it change.

MENA's Misery Indices, a Story of Economic Failure

Steve H. Hanke | Posted 03.11.2015 | World
Steve H. Hanke

In my misery index, I calculate a ranking for all countries where suitable data exist. The misery index -- a simple sum of inflation, lending rates, and unemployment rates, minus year-on-year per capita GDP growth -- is used to construct a ranking for 108 countries.

Will The Fed Kill The Recovery Again?

Robert Kuttner | Posted 03.08.2015 | Politics
Robert Kuttner

For most of its history, the Federal Reserve has been dominated by bankers and orthodox economists, who kill the recovery at the first sign of inflationary risks. Happily, the Fed today is led by Janet Yellen, a very uncharacteristic Fed chair who spent most of her career as a labor economist, of all things. Yellen is aware of the changes in the structure of labor markets and is unlikely to jump the gun on raising rates, though it's always possible that she could be outvoted. The risk today is not that an improving jobs picture will set off inflation. It's that even tight labor markets, by themselves, will not generate enough pressure for wage increases, because workers have lost so much bargaining power.

Janet Yellen Gets the Need for Rising Wages. That's Why Republicans Are Out to Get Her.

Ian Reifowitz | Posted 03.03.2015 | Politics
Ian Reifowitz

To get back to that level and maybe even surpass it, we need someone in charge at the Federal Reserve who understands that creating conditions that increase the purchasing power of American workers' paychecks is a part of her mandate. From what she's said and done so far, it appears Janet Yellen is exactly that kind of Fed chair.

Ukraine Hyperinflates

Steve H. Hanke | Posted 02.27.2015 | World
Steve H. Hanke

Since the New Year, Ukraine's currency -- the hryvnia -- has collapsed, losing 51 percent of its value against the U.S. dollar. To put this rout into perspective, consider that the Russian ruble has only lost 8 percent against the greenback during the same period.

The Skills Gap Misery Index

Dr. Bill R. Path | Posted 04.14.2015 | Politics
Dr. Bill R. Path

If we cannot even agree on the existence of a skills gap, we will never agree upon a solution to the skills gap. Rather than being perpetually engaged in an argument over its existence, we need to be engaged in a dialogue about how to combat it.

Good Deflation: A 'Tax Cut' for Working Families

Robert Rosenkranz | Posted 04.05.2015 | Business
Robert Rosenkranz

The conventional wisdom, embraced by the Fed and by most economic commentators, is that deflation is bad. But is there an exception when "deflation" is triggered by a dramatic decline in the price of oil?

5 Steps For Making Equities Your Best Friend In Retirement

Jonathan K. DeYoe | Posted 04.04.2015 | Money
Jonathan K. DeYoe

How do you make an asset allocation decision today with imperfect information about what tomorrow holds? By making friends with equities.

The Too-Much-of-a-Good-Thing Economy

Richard Barrington | Posted 04.04.2015 | Business
Richard Barrington

You know the old expression "Be careful what you wish for; it may actually come true"? Well, somewhere there are a bunch of early-1980s economists who may now be regretting what they wished for 35 years ago.

Fed Upgrades The Economy, But Will Be 'Patient' Raising Rates

Reuters | Posted 01.28.2015 | Business

WASHINGTON, Jan 28 (Reuters) - The Federal Reserve on Wednesday said the U.S. economy was expanding "at a solid pace" as it largely looked through wea...

The ECB's Not-So-Sweet 16th

Kermit Schoenholtz | Posted 03.15.2015 | Business
Kermit Schoenholtz

If the ECB is willing to use all its available tools without limit, there is little reason to doubt that it can hit its inflation target of close to 2%. However, making that policy commitment credible remains a great challenge because of the controversy and dissent about acquiring risky government debt.

Thinking About Money

Tom F. Driver | Posted 02.28.2015 | Money
Tom F. Driver

There was a danger that eveerybody might want to take their money out of banks at the same time, in which case the banks would collapse. So Roosevelt (FDR) closed them temporarily to let panic cool down.

Speak Up and Give Back if You Want the Economy to Improve

Anthony W. Orlando | Posted 02.25.2015 | Politics
Anthony W. Orlando

No one is arguing for complete equality of income. Not even close. We celebrate the success of the One Percent, and rightly so. All we ask, especially in this time of giving, is for the compassion, the humility, the shared experience that existed only a few decades ago.

CNBC's Jim Cramer: Make Money, Don't Moralize

Timothy J. Barnett | Posted 02.21.2015 | Politics
Timothy J. Barnett

Once a nation turns its back on a resolute determination to cultivate moral deservedness, political and financial superintendency passes to those who gain power illegitimately--a fact described eloquently by President Theodore Roosevelt.

7 Questions About the Recent Oil Price Slump

Olivier Blanchard | Posted 02.21.2015 | Business
Olivier Blanchard

Oil prices have plunged recently, affecting everyone: producers, exporters, governments, and consumers.  Overall, we see this as a shot in the arm for the global economy. There is, however, much more to this complex and evolving story.

Economic Policy Myths of 2014: Dead and Enduring

Dean Baker | Posted 02.14.2015 | Business
Dean Baker

Two myths that caused great confusion over the last several years are now headed to the trash bin of history. Unfortunately, many of our great national myths have survived 2014.

Fed Shouldn't Be Raising Interest Rates Any Time Soon

Mark Weisbrot | Posted 02.07.2015 | Politics
Mark Weisbrot

With inflation still running at 1.7 percent and downside risks such as the slowing world economy, there's no excuse for the Fed to be throwing people out of work by raising interest rates. Let's hope that public pressure and an improved debate over Fed policy can keep this country moving toward full employment.

Republicans Just Don't Get It, Part II

Harlan Green | Posted 01.31.2015 | Business
Harlan Green

Instead of finding ways to increase our productive capacity and boost household incomes, which are the real wealth creators, Republicans continue to benefit the few at the top of the food chain, most of whom are only interested in enriching themselves.

Jobless Rate Falls to 5.8 Percent -- Why Be So Unhappy?

Harlan Green | Posted 01.09.2015 | Politics
Harlan Green

Job creation in October marked the ninth straight month the economy has added 200,000 jobs or more, a feat last accomplished in 1994. The U.S. has created some 2.3 million jobs this year and is on track for the biggest gain in almost a decade.