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Matt Darling 🌐🏗️ Profile picture
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Jul 8 • 6 tweets • 2 min read
10% unemployment is disastrous.
Fortunately, I don't think this analysis is correct. It assumes that inflation expectations are baked in, and that we need Volcker shock equivalent monetary policy to get out of it. #BeyondTheNumbers
Very little evidence of that - as @paulkrugman has pointed out, all the measures of inflation expectations we have available point to low expected future inflation. #BeyondTheNumbers
That makes sense.

People get that the pandemic (and response to the pandemic) has meant weird economic times. #BeyondTheNumbers.
Longer critique here: niskanencenter.org/managing-the-m…

Basically, nothing suggests to me that we need a "shock". Just normal monetary policy. #BeyondTheNumbers.
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More from @besttrousers

Matt Darling 🌐🏗️ Profile picture
Jul 8
The FOMC faces difficult trade-offs, but it's hard to overstate the benefits of full employment. #BeyondTheNumbers
Full employment increases worker power:
Full employment reduces labor market discrimination.

For example, the gap between black and white unemployment, or the gap between college and non-college employment.
Read 4 tweets
Matt Darling 🌐🏗️ Profile picture
Jul 8
Everyone is very excited that we are seeing sustained job growth and did not enter a recession.

And while that is very much a good thing; we should have already known that. UI claims have stayed low, it's not like people were losing jobs. #BeyondTheNumbers
Some folks have talked about a "vibes" recession - I think that is partly what is going on here.

A lot of industries that are dependent on low interest rates (e.g. crypto) are having difficulty now; but that doesn't mean the economy as a *whole* is. #BeyondTheNumbers
On the other side, I'm concerned that prime age employment hasn't really budged in the last quarter. #BeyondTheNumbers
Read 6 tweets
Matt Darling 🌐🏗️ Profile picture
May 4
I have a new piece up at @NiskanenCenter, which digs into the data used in a recent @asdomash and @LHSummers essay, and suggests an alternative interpretation:

niskanencenter.org/managing-the-m… (1/18)
Here's the article I'm responding to: medium.com/@alex.domash/t… (2/18)
This is their key figure, showing the relationship between real wage growth and nominal wage growth (with a one-year lag).

They argue this suggests when nominal wage growth is too high (over ~4.4%) it's likely that real wages will drop.

(3/18)
Read 18 tweets
Matt Darling 🌐🏗️ Profile picture
May 4
"I have a new piece at @MilkenInstitute "Requiem for the Child Tax Credit".

I usually try to summarize articles with a tweet thread - but one this is a bit long, so I'm only going to quickly touch on the main themes.

milkenreview.org/articles/requi…"
One thing to note is that this was initially going to be a "History of welfare reform through AFDC and TANF and how it has led us to the CTC" piece.

It had to be written substantially earlier this year when that didn't happen 🫠
Theme #1: The hollow intellectual arguments for welfare reform in the 1990s.

A lot of the case for welfare reform was based on Charles Murray's "Losing Ground". But I think the book's arguments are very weak.
Read 14 tweets
Matt Darling 🌐🏗️ Profile picture
Apr 7
This is a good example of the precise problem @JerusalemDemsas was discussing.

The article (nydailynews.com/new-york/manha…) notes that more than 7,000 evictions were filed in March, but doesn't note that this is 40% of the pre-pandemic average.
You can get the data from @evictionlab evictionlab.org/eviction-track…
You can make the case that the pre-pandemic status quo was unacceptable - but not that we are currently experiencing an "eviction tsunami".
Read 4 tweets
Matt Darling 🌐🏗️ Profile picture
Apr 6
Looking forward to digging into this.

Lots of businesses have been built around the assumption that there's going to be a readily available supply of low wage workers available.

That's not the case right now; with luck it will not be the case going forward.
That means that some business models don't work right now; which can mean that they aren't bought into the goal of an expanding economy.

I talked about this last fall: niskanencenter.org/a-crisis-of-ab…
"lol, just raise wages" is the obvious retort to this.

But you can't "just raise wages" - need to have a business model that works around high wage employees.

Good example here: bloomberg.com/news/articles/…
Read 5 tweets

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