tag:blogger.com,1999:blog-2546602206734889307.post8765150452279112648..comments2024-03-29T12:16:15.785+00:00Comments on mainly macro: Adapting forward guidanceMainly Macrohttp://www.blogger.com/profile/09984575852247982901noreply@blogger.comBlogger6125tag:blogger.com,1999:blog-2546602206734889307.post-54653627288379897362014-01-28T09:10:33.066+00:002014-01-28T09:10:33.066+00:00"The composition of workers at this level is ..."The composition of workers at this level is beginning to be noticeable in real life. The chance of being served by a Brit in your Tesco Metro or Starbucks is increasing; the UPS delivery man is more likely to be a Brit."<br /><br />Not in London. Low wages and high costs are still a deterrent to inter-regional labour mobility.<br /><br />But the costs of poor job training and job creation for UK nationals during the Great Moderation is coming back to haunt us with the recovery.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-48274923895351123552014-01-26T14:34:51.026+00:002014-01-26T14:34:51.026+00:00"They can hardly be blamed for this. Zero pro..."They can hardly be blamed for this. Zero productivity growth for four years during a recession was puzzling, but continuing flat productivity when there is a recovery in output growth is in macroeconomic terms just weird"<br /><br />The answer might be staring us in the face.<br /><br />Hundreds of thousands of people are coming off welfare into work. Their productivity isn't going to be high until they improve their skills.<br /><br />The composition of workers at this level is beginning to be noticeable in real life. The chance of being served by a Brit in your Tesco Metro or Starbucks is increasing; the UPS delivery man is more likely to be a Brit.<br /><br />I apologise in advance for suggesting a non-complex solution.<br />Hoovernoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-61847340618644879982014-01-24T14:43:17.581+00:002014-01-24T14:43:17.581+00:00Zero productivity growth continuing is no surprise...Zero productivity growth continuing is no surprise at all.<br />'It is the competition stupid'.<br />EMs in particular China and India have catched up and are moving considerably faster than the developed world. And like what earlier happened at the bottom of the labourmarket is now increasingly happening at the middle part.<br />Of course 'back to normal' will correct something but the main issue is the competition is still much cheaper.<br /><br />First European victums were the Latinos Bros. Basically they are now a goner/write off. Now it is the turn of the Western frontrunners. Basically it is outsourcing but in a complicated way. Not only cheap production but also having to compete on an international market with say Chinese cies that have much lower labour costs, or compete as a local supplier to cies that compete on the international market.<br />Labourcosts (indirectly a huge part of productivity) are internationally seen way too high in the West compared to the new competition. There simply needs to be a correction.<br /><br />The problem is that Western Labourcosts is heavily related to consumption and therefor growth. Worldwide that should be compensated by wagesrise in the East. But that is a) delayed and b) unlikely enough to compensate that (overall lower).<br /><br />Riknoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-13199045016302624152014-01-24T12:37:14.984+00:002014-01-24T12:37:14.984+00:00Please, please, please stop trying to "fix&qu...Please, please, please stop trying to "fix" the supply-side with monetary policy.<br /><br />Monetary policy needs to provide a credible nominal anchor. Median wages are determined by the shape of the income distribution - that is a "real" variable.Britmousenoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-59500740495700521462014-01-24T11:47:29.686+00:002014-01-24T11:47:29.686+00:00Firstly, let's all accept Britmouse's poin...Firstly, let's all accept Britmouse's point on NGDP/nomial wages shall we!<br /><br />Secondly, I would suggest that if wages/earnings are to be targeted, that median rather than mean or aggregate is used? A 1% yoy increase in earnings is likely to hide significant distributional variation - i.e. it could well be that the wealthiest are seeing income growth of several percent, while low earners are being squeezed (I suspect this is the case but don't have data to hand).<br /><br />What is clear is that Mr Carney's forward guidance as originally formulated is no longer of much use - I believe he's making a speech today, look forward to Simon's blog - after an appropriate delay! - on that.Prateek Buchhttp://twitter.com/prateekbuchnoreply@blogger.comtag:blogger.com,1999:blog-2546602206734889307.post-39072004367575769962014-01-24T10:56:49.029+00:002014-01-24T10:56:49.029+00:00Shifting from one real target to another real targ...Shifting from one real target to another real target is just going from bad to worse. We can't target productivity with monetary policy.<br /><br />Private sector weekly earnings were soaring relative to market sector productivity in 2012, much more than 2% stronger. The current data has private sector total pay growing 5% stronger than market sector output/hour in four qs to 2012 Q3... and that's only after 2012 output has been revised up!<br /><br />Elephant in the room is still NGDP. Or just stick with nominal wages. But either of these are going to be basically incompatible with 2% CPI in the face of productivity shocks.Britmousenoreply@blogger.com