Why Inflation Stays Low Even Though Unemployment Is Down

January 3, 2018

To long-time baseball fans, the Phillips Curve sounds like a tribute to A.W. Phillips, a New Zealand-born economist who in 1958 noticed that wage growth is strong when the jobless rate is low. (Yes, kind of obvious to the layman.) American economist Paul Samuelson later made a bolder restatement of the Phillips Curve, saying that overall inflation—not just wage growth—is higher when labor markets are tight. Except the Phillips Curve hasn’t…

Read More >>

The U.S. Economy Is Finally Living Up to Lowered Expectations

December 9, 2017

People are cheering that the U.S. economy is finally back to operating at its full potential, eight years after the global financial crisis ended. “U.S. Economy Reaches Its Potential Output for First Time in Decade,” the headlined its Congressional Budget Office, Federal Reserve Bank of St. Louis This chart makes the point. The red line represents gross domestic product. It just managed to cross the blue line, which is the Congressional Budget Office’s…

Read More >>

Demanding a Bachelors Degree for a Middle-Skill Job Is Just Plain Dumb

October 29, 2017

Ever wonder why employers demand advanced credentials for jobs that don’t seem to require them? So did Joseph Fuller, a professor of management practice at Harvard Business School. He co-led a study that found it’s “a substantive and widespread phenomenon that is making the U.S. labor market more inefficient.” To take one egregious example, two-thirds of job postings for production supervisors require a four-year college degree—even though only 1 in 6 people already…

Read More >>