CERF Blog

Here’s what the OECD has to say about the global economy: But the global economy can be characterised (sic) as only achieving a muddling-through “B-minus ” grade. Global growth in the first quarter of 2015 was weaker than in any quarter since the crisis. And although this softness is seen as transitory, productivity growth continues… Read more

I saw this Kaufman Foundation article that argues that, by reducing the downside risks, an aggressive government-provided safety net promoted entrepreneurship, jobs, and economic growth.  If one follows the links, there is some empirical support for the argument. So, I figured that if I looked at data across countries, high-support countries would dominate new-business data.  When… Read more

Since the dismal first-quarter GDP was revised down, we’ve heard all sorts of excuses.  These include bad winter weather and problems in the seasonal adjustment process.  The bad-winter excuse has been popular for several winters now.  Of course, as I’ve said before, strong economies absorb bad winters with minimal impact on output, GDP. Now, we hear… Read more

The California Center for Jobs and the Economy has released a report comparing Los Angeles County’s economy with the Bay Area’s growth.  Needless to say, Los Angeles doesn’t look good in the comparisons. Early on, they not that Los Angeles’ economy has been almost unique in not creating jobs: In their March 2014 report, UCLA… Read more

This analysis suggest that low oil prices will likely persist.  It seems that U.S. firms are more competitive than previously thought: But U.S. firms haven’t assumed that role as readily as the Saudis would have hoped. Rather, they’ve been hard at work innovating their way to profitability even at $65 per barrel. True, shale growth… Read more

The folks at Chapman University have produced an important new paper.  We’ve said for a long time that reducing California’s Carbon Emissions is both expensive and futile, if the goal is to reduce global atmospheric carbon.  Here’s what the report has to say: This paper demonstrates that even the complete elimination of state GHG emissions will have no… Read more

It’s generally agreed that excessively lax lending standards were major contributors to the financial crisis that precipitated the Great Recession.  So, Washington wants to do it again, only more.  Here’s part of what Investors.com has to say: In a just-released federal report, the administration portrays these “credit invisibles” as victims of a traditional credit-scoring system.… Read more

It is.  Corporate welfare sustains inefficient old firms while impeding innovative new firms.  In this Forbes piece, George Leef discusses the use of tax waivers or direct subsidies to attract firms to a city or state.  As he points out politicians of all stripes do this: One of the great bipartisan follies of American politics is the idea… Read more

Tyler Cowen has a piece in the New York Times today.  He’s arguing that fundamental weaknesses and dysfunctions may be causing permanent changes, a reset: The debate over the economy these days isn’t just about income inequality and what should or should not be done about it. Perhaps the most crucial issue is whether economies will… Read more

During the buildup to the financial crisis, mortgage underwriting standards weakened dramatically.  Although there have long been loans made with low or no down payments, or to people with FICO scores below 660 or even 600, or to people who did not wish to provide full documentation, it was rare to find loans made that… Read more

Here’s a great idea from Amity Shlaes: Suggestion: Postpone the tax talk, and, instead, push the candidates on bailouts. Force them to declare whether they consider themselves to be “Austrian” or neo-Keynesian.” Let them say whether, come the next crisis, they’d wing it, à la Hank Paulson, or actually put forward a plan. Clear the… Read more

People are always writing about the best places to to buy homes, retire, get a job, etc..   Only one problem, thought.  These are always backwards looking, and things change.  In this case, they changed before the report could by published: The (best) metropolitan area for flipping a house was Baltimore-Towson, Md., where the average… Read more

Two new reports came out today indicating that the U.S. economy is weaker and more fragile than we thought. Productivity dropped for the second consecutive quarter, and hiring slowed. It appears that a weak global economy and the United States increasingly onerous regulatory environment is more than offsetting and stimulus from lower oil prices.

Financial innovations often involve complex quantitative models that can be used to perform difficult computations, like valuing complex derivatives, and to enable great new products and capabilities, like passive index fund investing, hedging interest rate or credit risk, or developing a sustainable financial plan.  But you have to be careful.  Sometimes the complexity inherent in… Read more

After writing about retirement savings and spending for the past couple of years, I thought it was about time to take a look at what others have written on these subjects; here is what I found. 4% Withdrawal Rate A seminal contribution to this literature was made by William Bengen (1994) with his analysis of… Read more