The Fed’s Flow of Funds (FOF) report shows that household sector net worth is approximately $60 trillion.  This wealth in concentrated in households headed by people aged 50 or older.  After all, for most people it takes time to build up wealth in the form of stocks, bonds, real estate and other tangible assets.  The… Read more

The title of this post is the title of a paper by Madeline Zavodny.  In the paper, Zavodny tests  to see if immigrants, especially educated immigrants, create jobs for resident Americans or take jobs away from them.  She finds big positive impacts.  That is, her work indicates that educated immigrants create jobs for resident Americans.… Read more

A couple weeks ago the Federal Reserve announced results of the latest Comprehensive Capital Analysis and Review (CCAR), aka stress test, for large banks.  The stress scenario included 13% unemployment, a 50% drop in stock prices and a further 20% drop in housing prices.  Basically, the scenario is a severe double dip recession.  In order… Read more

Last week the Federal Reserve released the Flow of Funds (FOF) report for the quarter ended December 31, 2012.  The report showed that household sector net worth increased by $1.2 trillion during the quarter to $58.5 trillion.  The financial crisis and subsequent recession has been marked by an enormous decline in household net worth, due… Read more

One of the more revered rules of thumb in retirement planning is that retirees can be comfortable in spending 4% per year of their accumulated net worth.  While the origin of this rule is not certain, it has been popularized by financial planning expert William Bengen in a series of articles dating back to the… Read more

Brian Caplan was writing about the Charter Cities, which he likes as a second-best choice because: The first-best solution to global poverty, therefore, is for the First World to allow much higher levels of immigration.  Unfortunately, despite its low absolute level (annual U.S. immigration is well under 1% of its population), immigration is already extremely unpopular.  For… Read more

Veronique de Rugy is a provocative woman, and a smart one.  Here’s what she said in a piece on women: Improving the lot of American women means lowering marginal tax rates, abolishing many workplace regulations, increasing the number of low-skilled immigrants, and ending the drug war. That’s what we call counter intuitive, but she makes… Read more

Economists assume that people attempt to smooth consumption over time.  The data are consistent with this assumption.  If you follow a cohort of people over a number of years, you will observe that their income will fluctuate a lot more than does their consumption.  Income generally rises sharply early in peoples’ careers, peaks out in… Read more

Shelly Sullivan has a piece, Cap-and-trade is not a budget solution, in Capital Weekly.  It’s well worth reading.  She’s correct, of course, but she fails to mention a key p0int: When most economists support cap-and-trade schemes,  the point is to use the proceeds to offset existing discretionary taxes.  That would minimize the economic costs of the regulation.  California’s proposal,… Read more

The FDIC’s quarterly banking report, QBR, came out yesterday. This report contains one of the CERF Indicators, which are a set of special economic indicators that we began tracking in the aftermath of the “Great Recession”. The CERF Indicator in the QBR report is net bank charge-offs. The other CERF Indicators are: the home ownership… Read more