WSJ on Janet Yellen

I enjoyed reading this WSJ article today about Janet Yellen, "Janet Yellen, a Top Contender at the Fed, Faces Test Over Easy Money," which is behind a subscriber firewall. Thanks to my dad for sending it along!

I had the privilege of serving as Janet's assistant on two trips to the OECD in Paris back during 1998 and 1999, when unemployment in the U.S. was dipping down toward 4.0 percent.  Those trips were a great education for me, a 25-year old Ph.D. student from Berkeley who was more than a little wet behind the ears.  Janet's preparedness, knowledge, and steady wisdom were inspiring.

Educated Chinese workers unemployed by choice

The Times reports on voluntary unemployment among two young Chinese workers (who happen to be dating) each with advanced education, who prefer to wait rather than take a factory job. Both report family support, which on the one hand is more strained than it would be in the U.S. because of more severe generational disparities in education, and on the other hand is less strained because of the one child policy.

Inside the late 2007 FOMC meetings

The New York Times published an article summarizing the FOMC meeting transcripts from fall 2007 that were recently released after the standard 5-year delay. Most notable to me were remarks attributed to Bernanke in the September meeting in which he argues for leaving the federal funds rate unchanged so as to avoid any appearance of a bailout of financial market participants.

Stiglitz on macro effects of inequality

Today Joe Stiglitz blogs about some costs of inequality and in particular why he feels it is responsible for the slow recovery. For me the notable statistic was that growth in the pre-crisis decade "was reliant" on the bottom 80 percent of households spending 110% of their incomes. Nothing like giving one hundred and ten percent.

SJSU and cyber-remediation

The Times published an article about Udacity and San Jose State University partnering to offer introductory and remedial classes online. If remediation can be more effectively achieved through cyber-learning, that seems like a development that is close to fully Pareto optimal, helping everyone and harming nobody.

George Will on foreign-born homesteaders

In a concise column yesterday, George Will recounts the Homestead Act of 1862 and its effect on immigration in the 19th century. Noteworthy elements are the statistics on the share foreign-born along the frontier in the Census of 1870, approaching 40 percent; and that less than a sixth of the land dispersed by 1904 had actually gone to homesteaders rather than "sharpies" (speculators, railroads). Love that word! Then Will closes with the oft-heard but worth repeating remark about the value of immigration in the context of an aging population with rising entitlements.

Reinhart and Rogoff on U.S. recovery

Another helpful post by Ezra Klein leads us to a discussion of the recent recession and recovery in historical context, courtesy of Carmen Reinhart and Ken Rogoff, who also provide an apples-to-oranges rebuttal of a recent blog post by John Taylor.

It's hard to disagree with either Reinhart and Rogoff that the level of GDP (per capita) is ultimately what we really care about, or with Taylor's implicit point that to get a higher level you need a faster growth rate during recovery. The level of GDP has remained low, unemployment high, and the growth rate of GDP hasn't been very rapid following this recession. But I think the time series graphs of levels of GDP provide a more compelling comparison than Taylor's growth rates.

It reminds me of how mystified undergraduates often feel in intermediate macroeconomics when they learn that growth is rapid in the neoclassical model following a cataclysmic destruction of capital.  I think their basic intuition, about why that's almost beside the point, is noteworthy.