Karl Smith on what stage the economy is in

Karl Smith at Modeled Behavior graphs employment in three ways:

He also comments:

This period is crucial for the US economy because we have not yet hit “the kick.” That is, growth is not feeding on itself. This is – by my lights – all very basic depreciation of capital effects.
Once, the economy emerges from the Liquidity Trap then growth can self-feed. More jobs means more cars and homes, means more jobs . . .

- Tyler

More on Generational Income Elasticity (Great Gatsby Curve)

Thanks to Marginal Revolution for leading me to a post that talks more about the correlations behind the “Great Gatsby Curve,” which I have discussed before. This led me to look at the correlations for Generational Income Elasticity for the countries originally studied by Miles Corak (page 45) and create the table below.

Perhaps I’ll expand this list later or do more with it, but I thought this was at least worth sharing.

- Tyler

A quick thought on poverty and marriage (i.e. socially constructive behavior)

The economics blog rolls this week are teeming with debate over Charles Murray’s new book Coming Apart: The State of White America, 1960-2010. To name only a few, Paul Krugman, Tyler Cowen, David Frum, and Bryan Caplan have all been a part of the discussion. The crux of the debate (and frankly it’s a little hard to follow who is arguing for what and on which side) lies in the question of causality in relationship between socioeconomic class, education, psychological predispositions and factors, and earnings. Krugman has a nice graph that depicts the stipulated fact by all sides:

From my perspective, no one (except Cowen to some extent) has been willing to say that there are a combination of factors with various levels of circular causality contributing to a general decline in the traditional structure and values of family units particularly in lower socioeconomic strata. Some of the causes are earnings, some are predispositions, some are genetic, some are part of the poverty cycle, and the list goes on beyond these I’m sure. Perhaps someone else has already articulated this feeling better than I have here, but I haven’t seen it yet.

Charles Blahous simultaneously gets and misses a point

The graph after the jump doesn’t paint a pretty picture as a somewhat likely scenario of future budgetary behavior.

Is unemployment really over 10%?

The Financial Times‘ Alphaville blog provides a chart showing an alternative measure of unemployment that currently has the UR at 10.3% making it essentially stagnant for two years. The chart is below; the implications are likely significant.

- Tyler