This week the Washington Post ran an article declaring High interest rates, rising inflation: The economy still isn’t normal.  But what is normal? This is 30 year mortgage rates since the 1970s Here is the inflation rate since the 1950s Here is the unemployment rate since the 1950s At 3.8 percent the unemployment rate is at levels that we had not seen since the late 1960s. The rate of inflation of 3.5% is also low in comparison to much of recent economic history.  When I first began to study economics in the 1980s the combination would have been regarded as m ..read more

 Christine Exley graduated from UMW in 2009. She went on to earn a Ph. D. in economics from Stanford University. She taught for several years at Harvard Business School and is currently associate professor in the Department of Economics at the University of Michigan. Christine has published extensively in the top journals in economics. Examples of recent work include The Gender Gap in Confidence: Expected But Not Accounted For and  Nonprofits in Good Times and Bad ..read more

 Sierra Latham graduated from UMW in 2009. Since then she has earned masters degrees as Georgetown University and University of Chicago, worked at the Urban Institute and for the City of Alexandria. She is currently a Senior Research Analyst at the Federal Reserve Bank of Richmond. Here is some recent work she has done on  Measuring Poverty  and Regional Housing Supply ..read more

 Alli graduated in 2018 and is currently an assistant manager at the Federal Reserve Bank in Kansas City.  Here is a recent article she coauthored on small business lending ..read more

  Paul Rhode has an important new paper in the January issue of Explorations in Economic History ("What fraction of antebellum US national product did the enslaved produce?." 2024. Explorations in Economic History 91). Rhode frames the argument against Ed Baptist’s claim that “almost half of the economic activity in the United States in 1836, derived directly or indirectly from cotton produced by the million-odd slaves…”, which has been not just repeated but exaggerated by others. It was easy to show that Baptist’s claim had no foundation in either theory or evidence and was pur ..read more

   I recently listened to Rick Hornbeck on the Chicago Booth Review Podcast in the episode An Economist Debunks Gone With the Wind Its kind of  a silly name for the episode, but Hornbeck does a great job of describing important research by himself and and Trevon Logan. The paper calls for a significant reconceptualization of the economics of slavery. Hornbeck and Logan present slavery as a giant externality in which the labor of enslaved people was dramatically misallocated because slave holders did not have to take into consideration the full cost of their decisions. Conseque ..read more

  I got an email notification last week for a new episode of Bishop Barron’s Word on Fire podcast  asking  Is There a Catholic Antidote to the Crisis in Higher Education “According to Fortune magazine, overall undergraduate enrollment experienced the steepest rate of decline on record from 2019 to 2022, and it has only worsened since then. There are several explanations, but one cause is entirely self-imposed: most universities and colleges have now replaced education with ideology, subverting the search for truth with political indoctrination. In this epis ..read more

  Planet Money has a nice story about rum production (The billion dollar war behind U.S. rum) in Puerto Rico and the Virgin Islands, particularly the consequences of Virgin Islands deal to lure Captain Morgan away from Puerto Rico. It should be of interest to anyone paying attention to Youngkin’s attempts to lure the Capitals and Wizards away from D.C. It is also a nice example of a real world prisoners dilemma type game ..read more

  This is from The New York Times article Why Big Banks (and Some Odd Allies) Oppose a Plan to Protect Banks: “Regulators are calling for an increase in the amount of capital — cash-like assets — that banks have to hold to tide them over in an emergency to avoid needing a taxpayer-funded bailout like the one in the 2008 financial crisis.”   No! No! No! No! No! Bank capital is not “cash like assets.” Those are reserves. Reserves are money that banks keep either as cash or as deposits with other banks. They are cash like assets. And there are reserve requirements regarding the percenta ..read more

  I was listening to a recent episode of Hidden Brain the other day about anomalies, specifically things that are supposedly anomalies in economic theory. The guest was Richard Thaler, who is famous as a behavioral economist and Nobel Prize winner. The discussion reminded me of some of the problems that I have with some work that is described as behavioral economics. One of the stories he told was about Richard Rosett, a professor of his when he was in graduate school at the University of Rochester. Rosett collected wine. He wouldn’t spend more than $20 or $30 on a bottle, but sometimes a ..read more