Worthwhile Reads – June 17th, 2015

Catching up on some worthwhile links from the past few months:

What Motivates Us

Two economists at the St. Louis Federal Reserve Bank—William Emmons and Bryan Noeth—examine the fate of the middle class:

“The median income of the demographically defined middle class… is 16% lower now than it was in 1989…. The sociologically defined middle-class family ranked at the 55th percentile of U.S. income earners in 1989; by 2013 it had fallen to the 45th percentile…”

Patience—for the Fed—is a Virtue

Noting that core inflation has been stuck between 1.3% and 1.7% since mid-2012, and isn’t forecast to reach 2% until 2017, former Vice Chair of the Federal Reserve Alan Blinder counseled patience for the Fed in raising interest rates in April. Given that he presided over some of the roaring 1990s, he should know.

Kocherlakota the Great

“Minneapolis Fed President Narayana Kocherlakota on Tuesday laid out a case for waiting until the second half of 2016 to start raising interest rates…”

Why Chance the Downside Risk?

Ryan Cooper notes in The Week the dire consequences of not Fixing the Jobs—and the potentially mammoth gains from doing so:

“A permanent 1.45 percentage point decline in America’s nominal growth path would be indescribably disastrous. As Brad DeLong calculates, by 2014 the cumulative lost output of the Great Recession through that year amounted to roughly $60,000 per person. If nothing restores the trend, the amount lost could reach into the hundreds of thousands, per person.”
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