I've written before about the alarming consensus developing in certain wonkish circles that suddenly labor markets are tightening up, and accelerating inflation is just waiting in the wings. Paul Krugman has now weighed in several times against these "inflationistas," and his latest effort is the most comprehensive.
He adduces four arguments: First, measured wage growth is probably to some extent a statistical artifact representing the fact that during bad weather hourly workers, who are paid less, tend to be idled — making measured wages only seem to increase. Second, if you look closely at the data, the case for wage growth even existing at all is barely there. Third, wage increases are well below what they were before the financial crisis, and everything we've learned since then suggests that a greater fraction of GDP coming in the form of wages would be highly beneficial.
The fourth is especially interesting, though:
Fourth, there's good reason to believe that everyone is working with the wrong paradigm here. Ever since the 1970s, textbook macroeconomics — reflecting the experience of the 1970s — has assumed an "accelerationist" framework, in which low unemployment leads not just to rising wages but to an ever-rising rate of wage increase. But the actual data haven't looked like that for a long time. Since the mid-1990s, in fact, they have looked much more like an old-fashioned Phillips curve, with a relationship between the unemployment rate and the level of wage increase, not the rate of change of wage increase. [New York Times]
This brings to mind a Steve Randy Waldman post arguing that the economics profession has completely misinterpreted the 1970s, and the accelerationist view was wrong even back then. By this reading, inflation is even less of a concern than people assume. If true, this loads the policy scale even more heavily on the side of stimulating like mad.
Of course, as Krugman says, regardless of who is actually right about this, the relative risks involved clearly militate on the side of stimulus. One doesn't have to buy the Waldman view of the '70s for that — it will hold regardless.
In other words: Damn the inflation, Captain Yellen, full speed ahead! Ryan Cooper
Scientist who discovered ozone layer hole: 'We are still inflicting major changes on the atmosphere'
Thirty years after three British scientists discovered a hole in the ozone layer over Antarctica, one of them says humans are still "inflicting major changes on the atmosphere."
"Then, it was chlorofluorocarbons; today it is greenhouse gases," Jon Shanklin of the British Antarctic Survey told The Guardian. "The ozone hole story tells us that it is very easy to cause major changes to the atmosphere — it only took about 10 years to develop — but it is very difficult to restore equilibrium. Unfortunately, we don't seem to have learned that lesson."
In 1985, Shanklin, along with colleagues Brian Gardiner and the late Joe Farman, discovered manmade chemicals were depleting the ozone in the upper atmosphere, allowing cancer-causing radiation to reach the earth. Their work led to the Montreal Protocol, an international treaty that banned CFCs and has been called "the single most successful international agreement to date."
But Shanklin now notes that "the CFCs we put up there will take a long time to dissipate," and that the ozone layer is far from fully recovered.
Speaking on Russia's state-run Rossiya channel on Saturday, President Vladimir Putin admitted that Moscow and Washington have "disagreements," but that "there is something that unites us, that forces us to work together," Reuters reports.
"I mean general efforts directed at making the world economy more democratic, measured and balanced, so that the world order is more democratic," Putin said. "We have a common agenda."
His comments come two days after he told a Russian phone-in show that the United States wants "not allies, but vassals," and is behaving like the former Soviet Union in its overreaching foreign policy. Sarah Eberspacher
A new report from the United Nations on Friday says at least 120,000 people have been displaced due to ongoing violence in Yemen (an Oxfam report put the minimum number closer to 121,000).
"This is in addition to the 300,000-plus Yemenis already displaced by previous violence," Adrian Edwards, a spokesperson for the UNHCR, said in a statement reported by NPR. "It's feared this figure could rise significantly if violence continues."
The number of displaced persons has escalated since Saudi-led airstrikes began against the Houthi rebels more than three weeks ago. Iran submitted a four-point peace plan to the U.N. on Friday, but Reuters reports that other international diplomats have dismissed the country's claims of brokering peace, saying Iran, which has backed the Houthi rebels in the conflict, is not a neutral party. Sarah Eberspacher
You can plan the perfect IMAX event to drum up interest for your teaser trailer, but sometimes (all of the time), the internet is going to ignore your carefully laid out plans.
Such was the case for Batman v. Superman: Dawn of Justice director Zack Snyder, who countered an online leak of the upcoming film's trailer by releasing the real deal on Friday night. As his tweet accurately claims, Warner Bros.' version is neither blurry nor pirated. Watch Ben Affleck's Batman and Henry Cavill's Superman square off, sans IMAX, in the video, below. —Sarah Eberspacher
Afghan President Ashraf Ghani said that the Islamic State claimed its militants were behind a series of attacks on the city of Jalalabad that killed at least 33 people and injured more than 100 on Saturday.
"Today the deadly attack in Nangarhar Province, who claimed responsibility?” asked Ghani while speaking on national television. "Taliban did not claim responsibility, but Daesh claimed responsibility." The New York Times notes that Daesh is the Arabic pronunciation of ISIS.
Several explosions occurred near the New Kabul Bank branch, as government workers lined up to collect their paychecks. The deadliest attack involved a suicide bomber wearing a vest packed with explosives. Officials said all of the victims were civilians.
Kareem Abdul-Jabbar, the most prolific scorer in NBA history, underwent successful quadruple-bypass surgery in Los Angeles, according to a statement released Friday by UCLA Health. Abdul-Jabbar had the procedure done Thursday at the Ronald Reagan UCLA Medical Center after being admitted there with cardiovascular disease earlier this week.
Abdul-Jabbar is the NBA's all-time leading scorer and is most known for his 14 seasons with the Los Angeles Lakers during the "Showtime" era. In his 20 years in the NBA, Abdul-Jabbar won six championships and was named league MVP six times. He is expected to make a full recovery. Kimberly Alters
A San Diego man trying to board a bus in his wheelchair was stripped of his transit pass because he didn't have proper "proof" of his disability. A transit cop told Joey Canales, 31, that he wasn't carrying the proper paperwork and confiscated the pass. "My disability is not hidden," Canales told the officer, who also issued him a ticket.