The increase in MMMFs is an increase in the supply of loanable funds, but not the supply of money. I.e., it is a velocity relationship. Consequently, the demand for money is falling / velocity rising.
EPOP and LFPR are affected by immigration. With the recent large influx, there might be some inconsistencies?
Long-term money flows, the volume and velocity of money, are decelerating. Short-term money flows, the proxy for the real output of goods and services, doesn't show much deceleration now until the 1st qtr. of 2025.
Is there a specific reason you isolate the 25-54 year cohort? The complete LFPR and E/POP data shows a slightly different story (i.e., worsening E/POP over the past few months). Cutting the younger group tracks (it's rather small), but the 38 million employed over 54 seems considerable.
"People say that “to reduce inflation, unemployment has to rise”. However, it is the Fed, through its control of NGDP growth that affects inflation and unemployment."
That´s the best argument for having the Fed ditch its interest rate targeting procedure and concentrate instead on stabilizing NGDP growth! "
I agree about the first and fail to see how it leads to the second as a conclusion.
I see it as policy => price change (inflation/disinflation) => real income change(employment/unemployment).
To "target" NGDP looks to me like a confusion of the target with the multiplicand of the ultimate objective WITH the target).
I do not see the question of whether we are "in" recession or not as interesting. The interesting question is how far are we from real income maximization? This is near to being the same thing as how fare are we from "maximum" employment. So closely observing labor market conditions is an important part of judging whether policy is giving us the proper amount of inflation for real income maximization.
You and I always seem to agree on the policy be get there via different routes. :) [On of the differences is I pay LOTS of attention to movements in expected inflation.]
The increase in MMMFs is an increase in the supply of loanable funds, but not the supply of money. I.e., it is a velocity relationship. Consequently, the demand for money is falling / velocity rising.
https://www.zerohedge.com/markets/money-market-fund-assets-hit-another-new-record-high-domestic-bank-depos-surge-pre-svb
EPOP and LFPR are affected by immigration. With the recent large influx, there might be some inconsistencies?
Long-term money flows, the volume and velocity of money, are decelerating. Short-term money flows, the proxy for the real output of goods and services, doesn't show much deceleration now until the 1st qtr. of 2025.
Is there a specific reason you isolate the 25-54 year cohort? The complete LFPR and E/POP data shows a slightly different story (i.e., worsening E/POP over the past few months). Cutting the younger group tracks (it's rather small), but the 38 million employed over 54 seems considerable.
Yes, you minimize composition effects.
"People say that “to reduce inflation, unemployment has to rise”. However, it is the Fed, through its control of NGDP growth that affects inflation and unemployment."
That´s the best argument for having the Fed ditch its interest rate targeting procedure and concentrate instead on stabilizing NGDP growth! "
I agree about the first and fail to see how it leads to the second as a conclusion.
I see it as policy => price change (inflation/disinflation) => real income change(employment/unemployment).
To "target" NGDP looks to me like a confusion of the target with the multiplicand of the ultimate objective WITH the target).
I do not see the question of whether we are "in" recession or not as interesting. The interesting question is how far are we from real income maximization? This is near to being the same thing as how fare are we from "maximum" employment. So closely observing labor market conditions is an important part of judging whether policy is giving us the proper amount of inflation for real income maximization.
You and I always seem to agree on the policy be get there via different routes. :) [On of the differences is I pay LOTS of attention to movements in expected inflation.]
Back in March, I argued that the Economy was fast approaching equilibrium:
https://marcusnunes.substack.com/p/is-the-economy-approaching-equilibrium
On inflation expectations, I´m closer to Jeremy Rudds views:
https://www.federalreserve.gov/econres/feds/files/2021062pap.pdf
"Economists and economic policymakers believe that households’ and firms’ expectations of
future inflation are a key determinant of actual inflation. A review of the relevant theoretical
and empirical literature suggests that this belief rests on extremely shaky foundations, and a
case is made that adhering to it uncritically could easily lead to serious policy errors."