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"EconWeekly" - 5 new articles

  1. Core inflation around the world
  2. Market crashes that never happened
  3. Graphic content: Unemployment rates town by town, in Spain
  4. Government consolidation, à la française
  5. More deep thoughts about macro models
  6. More Recent Articles
  7. Search EconWeekly
  8. Prior Mailing Archive

Core inflation around the world

I put together a chart of the 12-month percent change of measures of core inflation for a selection of countries. The definition of core inflation varies across countries.

Green (red) means lower (higher) inflation. The color scale is meaningful within rows only. So, for example, the deep-green that the U.K. shows for June 2015 means that the core inflation in that month is among the lowest observed in the U.K. between June 2012 and June 2015 (but not necessarily low across countries; in fact, Switzerland's is lower).

The two lines at the bottom, below the legend, show the median core inflation rate and a measure of cross-country dispersion (the median absolute deviation).

     Click on the picture to enlarge


Market crashes that never happened

Here's an article from on market analysts who kept predicting (incorrectly) that the stock market would crash.

(Hat tip to my old colleague and accomplished investment manager: P. M.  I'm not sure if I can say his name, since I got his pointer through LinkedIn.)

I love this table, towards the end of the article:

I'm not trying to say that bearish calls are nonsense. In fact, I'm bearish more often than bullish. But I'll stay away from specific market calls.

Graphic content: Unemployment rates town by town, in Spain

Beautiful map on unemployment rates on If you go to the website you can click on each town and see its name and unemployment rate.

Notice the clusters of high unemployment in Castilla La Mancha, Cádiz-Huelva-Sevilla, and León-Galicia.

The map, however, is misleading if you try to infer comparisons of regional unemployment. For instance, it would seem that Galicia's (northwest) unemployment rate is much, much higher than Catalonia's (northeast). Wrong: Galicia's jobless rate in 2015:Q1 was 21.8%, whereas Catalonia's was 20.1%.

Government consolidation, à la française

The Economist is running this article on the re-organization of French regions, whose number will be consolidated from 22 to 13 by Jan. 1, 2016.

The piece illustrates the difficulties of consolidating the government administration in a country with strong regional identities, and where civil servants have a rooted sense of entitlement.

Best passages and quotes from the article:
Far less clear is whether the merged region will bring budget savings. French public-sector jobs are protected, so there will be no headcount cull after the merger.
Those employed in Montpellier have been told they will not have to move to Toulouse. Nor will seats be cut in the merged regional assembly. And, as Mr Alary points out, there will also be extra costs, such as from merging the two regions’ incompatible computer systems.
“In practice,” says Jean-Jacques Pons, leader of the centre-right opposition in the regional assembly, “there won’t be economies of scale, or only at the margin.” No candidate in December’s regional elections wants to campaign on a cost-cutting platform.
And my favorite:
“We’ll have to drive nearly two hours up the motorway to get subsidies,” grumbles a town-hall employee in Picardy.

More deep thoughts about macro models

Jérémie Cohen-Setton at Bruegel does a great job, as usual, rounding up recent blog posts on a specific topic. This time: a critique of modern macro. Can the models built during the Great Moderation explain what happened after the Great Recession?

I would say that "raising the profile" of the financial sector within macro models helps--but I don't know whether a Copernican revolution is necessary. But, ultimately, we will always (literally, always) have to live with model uncertainty. Noah Smith makes this point well.

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