Has the crisis changed economics?

The Economist has a by invitation discussion this week on how the economic crisis has changed economics, and by way the teaching of economics. It should be a good read.

US recession in international comparison

The New York Times posted the graphic below comparing the recession in the United States to other developed countries. The basic point is that the United States has not suffered as much as other countries - and has recovered more. Still, there is still a large part to cover to get back to where we were prior to the recession.

Best economic minds are not so good?

Michael Hirsh in Newsweek has a piece on the the failure of economists to come to terms with the crisis. The article is a good summary of the arguments made in longer pieces by economists and other writers. This article would be a good primer to use with students to introduce them to the intellectual crisis in economics brought about by the crisis. More about what Hirsh is talking about can be found in these two Krugman pieces: "How did Economists Get it so Wrong" and "The Slump Goes On: Why?".

Poverty Rate is up - highest since 1994

The new poverty rate numbers are out - and the news is bleak. While the unemployment numbers are depressing, the poverty numbers show the real brutal reality of this recession. The hard truth, 14.3% of the the America population is living under the poverty line. That is one in seven people. For children, one in five live in poverty. The time in poverty will scar people's lives for years. Keep in mind, these are the 2009 numbers. 2010 will most likely be worse. Here is the article from the New York Times. This is the graphic to go with it:

Fiscal Times

As a teacher, I am always on the lookout for a good source for thoughtful articles for my students. From Mark Thoma's blog, I just learned about a new on-line journal "The Fiscal Times". It looks pretty good and balanced, with a wide range of articles.

Check it out.

Why businesses are not hiring - AD

The chart below was from Paul Krugman's blog (he got it from Catherine Rampell) and it shows the reason what business say it the most important problem - looking back decades. Quiet simply it shows that the most pressing problem is the lack of sales (read lack of demand - not taxes or government policy).

Long Time Away

The start of the school year has been very busy and has kept me away from posting. Here are two articles that might be good to use in class. The first is from the Economic View column in the New York Times where Robert Frank discusses the role of infrastructure spending in the United States with a comparison to other countries. The basic point is our infrastructure has deteriorated and needs repair and right now might be the cheapest time to do this - not to mention, over the past few decades we have spend too little to make the improvements. The acticle does a good job with showing how the con opportunity cost affects government policy.

The second piece is by Paul Krugman and Robin Wells called, "The Slump Goes One: Why?" from the New York Review of Books. Pretty self explanatory in what it is covering.

Interactive historical unemployment graphic

The Wall Street Journal has a great interactive graphic showing the historical unemployment rate in the United States. The graphic provides an interesting way to look at severity of recessions and puts the current crisis in context.

Unemployment & Inflation - This time is different, not so much

Paul Krugman has good post on how high unemployment is affecting inflation unemployment in the way the Phillips curve would predict (he also has a good chart comparing this recession to earlier ones in regards to inflation and unemployment). He also notes alarm that the Fed seems to be ignoring this piece of economic theory.