A healthy debate is happening about whether the standard measure of national economic well-being--per capita GDP--is sufficient for that purpose.  One problem is that per capita GDP does nothing to take into account how broadly affluence is enjoyed.  If, to give an extreme example, a country of 1000 people had GDP of $1 billion (let's call it Witallia), its per capita GDP would be $1 million, which sounds great.  But if the country has one person who makes $1 billion and the remainder make nothing, it is not doing very well. The standard measure of inequality is the GINI coefficient.  If a c ..read more

I check out mortgage rates at least once a week, because, well, it is my job to know what they are.  Recently, I have been expecting to see mortgage rates fall a lot, because 10-year Treasury Yields have fallen a lot.  But they haven't.  Here is the spread of 30-year mortgages over 10-year Treasuries: As you can see, the spread is at its highest level in at least five years (BTW, 10-year Treasuries are from Fridays, and the Freddie PMMS is from Thursdays, but still...).  I am eagerly awaiting next week to see if this continues ..read more

This took me back (with pleasure) to my graduate school days.  I have been privileged to learn from many amazing people, but I think I learned more from Professor Brock than anyone else (and I think I learned only about 1/3 of what he tried to teach me ..read more

After reading Biyamen Applebaum's thought-provoking piece in the NYT today, I thought about how economists measure well-being, and how measures other than GDP per capita better reflect social welfare.  One obvious measure is median disposable income--a good representation of middle-class affluence, in that it is at the middle, and is not skewed by the top end of the distribution. After looking at OECD data that I myself adjusted for exchange rates, a Wikipedia article based on OECD data, a Mises report also based on OECD data, and World Population Review, the consensus ranking of the US for m ..read more

Has the median man made progress economically since 1980?  Not really.  While male median income rose (in 2017 $) from $35,589 to $40,396, or 13.5 percent,  this modest increase masks the fact that the share of men in their peak earnings years has increased, and that earnings at the median within peak earnings years categories have decreased. Share in Age Category Median Earnings (2017 $) 1980 2017 1980 2017 15-24 0.216 0.120  $13,057  $13,734 25-34 0.232 0.183  $44,252  $40,575 35-44 0.161 0.167  $56,911  $52,403 45-54 0.136 0.169  $56,732  $53,985 ..read more

Using one of the world's most useful websites, FRED, I drew a graph of rent CPI and all CPI going back to the beginning of the series. Until 1984, rent growth and CPI growth pretty much matched each other, meaning inflation adjusted rents stayed nearly constant.  And then, a departure began between the two: rents have been rising faster than inflation, and the difference between he two is accelerating. In a well functioning housing market, rents should stay fairly constant across time.  If rents rise above inflation, builders have incentive to build, until they create enough vacancy that r ..read more

I think the answer is yes.  Suppose you are a young person, early in your earnings years.    Your employer offers you a one to one 401(k) match on, say, 5 percent of your income.  The employer match gives you a guaranteed 100 percent immediate return on your investment (I know of no other deal like this).  But after paying rent, college (or other school) debt, utilities and food, you haven't got five percent of your income left over.  Should you take on credit card debt to finance the 401(k) contribution? If (and that is a big if) you are a prime borrower, the answer is likely yes.  Suppose y ..read more

It's a chat about Robert Galbraith's Career of Evil.  Panelists Lisa Schweitzer and Aubrey Hicks made is work ..read more

Geoffrey Heal computes the cost of going entirely to renewables by the year 2050.  The paper is short and to the point.  His computations are: US GDP is currently a shade under $20 trillion.  If Heal is correct, this means the cost of going to all renewables is ~ 11 basis points per year over the next 31 years.  It is hard to imagine that the negative externalities of fossil fuel are less than 11 bps.  Heal also argues that costs will, if anything, be lower than the computed costs. Imagine--it is possible to stop greenhouse gas emission while improving the economy ..read more

I just had a major home repair that illustrated (1) that law of one price doesn't always hold and (2) people should shop for expensive things. The expensive thing was a new roof on my vintage 1911 house.  That the place needed a new roof (including a tear-off of the old roof) was not a question.  I call up a handyman I know and like, and I got a quote of X.  His work is good, but it turns out he is not bonded and doesn't always see the need for permits.  So I decided to investigate further. I call up roofing company A, and I get a quote of 3X.  But, as the salesman told me, "if I act now ..read more