Fordham Economics Department

Graduate and undergraduate programs in New York City

CIPS-Pizza & Elephants bon voyage Party Thurs Dec 15th 7:30 & 9:30pm

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Please join us in E530 Dealy to say goodbye to students and faculty leaving before next week’s official Economics Party (same location .  Everyone is welcome to discuss Elephant shapes with plenty of Michaelanglo’s pizza. To mark this remarkable moment in history,  we review and discuss the Elephant diagram (briefly) starting with Chris Giles three minute FT video (not cats).  Does this now famous global growth incidence curve really explain recent populist backlash?  Is it an Elephant or a Mastodon?

Don’t worry there is a happy ending… average OECD middle class workers incomes did not actually fall, they gained less, perhaps relative deprivation matters too…

What can we do?  Nothing right now.  So please come share a wonderful festive-beverage with Michelangelo’s pizza, freshly delivered at 7:20 and 9:20pm…   (thanks finance guy).

If possible please RSVP to Anglea or gradecon@fordham.edu but come join us anyway, another pizza is just a phone call away. It will be fun.


Growth incidence curves were very rare a decade ago. Now we have a famous one that explains everything and looks like an elephant.  Or does it?  Come to the party and see.

Just in case you miss the party, here is the video and a few holiday readings (avoid the original 2015 World Bank article, they don’t even call it an elephant).  Here is the confusing Chris Giles video, but at least he  draws the elephant in real time…

Actually the best short summary is the Economists’ “Shooting an Elephant” which includes the real elephant photo above and this very clear chart, almost all we need really, except now we have a mastodon, not a modern elephant, as in the original.

More holiday reading: reassuring findings, but someone should have told the voters… Adam Corlett is thorough enough to elicit a response from  Lakner and Milanov the same month (September).

References (sorry, not very cheerful i know):

Corlett, Adam. (2016) “Examining an elephant: globalisation and the lower middle class of the rich world.” Resolution Foundation, London.

DESA, U. N(2013). “Inequality matters. Report on the World Social Situation 2013.” New York, United Nations.

Economist (2016) Global inequality: Shooting an elephant via@TheEconomist

Lakner, Christoph, and Branko Milanovic (2016). “Response to Adam Corlett’s “Examining an elephant: globalisation and the lower middle class of the rich world”.

Milanovic, Branko, and Christopher Lakner (2015) “Global Income Distribution: From the Fall of the Berlin Wall to the Great Recession” The World Bank Economic Review 30 (2): 203-232. doi: 10.1093/wber/lhv03 http://class.povertylectures.com/WB_publication.pdf

Milanovic, Branko (2011). Worlds apart: Measuring international and global inequality. Princeton University Press.

Milanovic, Branko (2016) Global inequality: A new approach for the age of globalization, Harvard University Press.

Piketty, Thomas(2014). “Capital in the 21st Century.” Cambridge: Harvard University Figures

Porter, Eduardo (2014). A global boom, but only for some. New York Times.

Porter, Eduardo (2016). On Trade, Angry Voters Have a Point, NY Times, March 16th Wynne, Mark A2011). “Will China ever become as rich as the US?” Economic Letter, 6.

Giles and Dannon (2016) Globalisation ‘not to blame’ for income woes, study says Financial Times, Sept 13th 2016 Video version

 

 

Kansas City Fed Economist speaks Tuesday 12-1pm on Monetary Policy Regime Switches.

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This Tuesday 12-1pm Andrew Foerster Economist at the Kansas City Fed will speak on “Optimal Monetary Policy Regime Switches.”  Dr. Foerster gained some notoriety for his 2014 Macro Bulletin on the The Asymmetric Effects of Uncertainty on Employment.    This analysis of how market volatility affects employment growth underlies what the Wall Street Journal Real Time Economics call the Fear Gauge (Figure 1 below).   As reported in a 2014 Kansas City Fed’s Macro Bulletin Foerster’s finds an asymmetric response of firms to uncertainty as measured by the VIX (Figure 2).  When uncertainty increases firms slow hiring, but after the VIX returns to normal levels firms are slow to return to previous hiring rates. This means a spike in the VIX can have significant and long lasting negative impact on employment.  His results suggest that the spike in the CBOE “fear” index triggered by the 2010 Euro crisis  led to a cumulative lost 400,000 jobs while the 2011-12 U.S. debt ceiling crisis cost even more jobs.  Without these jumps in CBOE volatility index the U.S. economy would have added almost about 16,000 more per month from 2010 to 2013 or a total of 600,000 jobs, suggesting this uncertainty slowed the slowed the U.S. recover from the 2008 Global Financial Crisis.

Department Seminar Note new Time: Tuesday, Feb 9, 12 – 1 pm

 Optimal Monetary Policy Regime Switches

Place: Economics Conference Room, Dealy Hall E-530

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San Francisco AEA Session surveys U.S. Economic Outlook

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A January 2nd session on the United States economic outlook organized and moderated by Fordham University’s Professor Dominick Salvatore was one of just seven sessions chosen by the AEA to be webcast on the AEA webpage . Professor Salvatore opened the session by arguing that though the U.S. recovery is the envy of Europe and Japan (Figure 2) post-recession GDP income growth has been slower in each of the past five recessions (Figure 1). Olivier Blanchard until recently chief economist at the IMF and now Senior Fellow at the Peterson Institute shows that the Phillips curve has flattened perhaps tempting policy makers to use inflation to bring down unemployment further, but warns the relationship has become less reliable, especially with very low interest rates. Stanley Fischer, Vice Chairman of the Federal Reserve Bank Board argues that since prudential regulation remains weak expansionary monetary policy may be needed to sustain recovery. Martin Feldstein says the U.S. economy is in fine shape with near full employment and core inflation nearing the target 2%. He remains concerned however with the potential burden of public debt as rates rise and transfers to the elderly increase. Columbia Professor Joseph Stiglitz argues that rising inequality and a failure to diagnose the true causes of the 2008 recession explain the anemic recover. Stanford’s John Taylor argued the U.S. has chosen to have a weak recovery by not pursuing economic reforms that we know work including tax and trade reforms, deregulation, etc.

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“Make the world a better place”… get a PhD in Economics…

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pickettySo, you want a PhD? Economics is among the top in terms of “high meaning*” and expected salary. Of course hard working multi-disciplinary economists like Thomas Piketty also become wealthy writing interesting books that combine meticulous research (hundreds of years of French tax records) the literature of the landed classes (Balzac, Jane Austin..) with original insights culled from economics, sociology and history. Even at 700 pages, Capital in the 21st Century is a good read and an better listen using online data and Figures). *”High Meaning” is the % of respondents who feel they “make the world a better place.”

Rank Major Degree Type Early Career Pay Mid-Career Pay % High Meaning
1 Electrical & Computer Engineering (ECE) PhD 102000 142000 0.61
2 Computer Engineering (CE) PhD 111000 139000 0.61
3 Chemical Engineering PhD 92300 138000 0.65
4 Biomedical Engineering (BME) PhD 86800 137000 0.84
5 Economics PhD 98200 134000 0.7
6 (tie) Electrical Engineering (EE) PhD 102000 133000 0.69
6 (tie) Organic Chemistry PhD 79000 133000 0.61
8 Computer Science (CS) & Engineering PhD 104000 132000 0.74
9 Pharmacology PhD 70200 131000 N/A
10 Physics PhD 88100 130000 0.63
11 Computer Science (CS) PhD 112000 129000 0.63
12 Statistics PhD 99900 128000 0.72
13 (tie) Mechanical Engineering (ME) PhD 87800 125000 0.66
13 (tie) Pharmacy PhD 103000 125000 N/A
15 (tie) Aerospace Engineering PhD 93300 123000 0.52

Source: PayScale Human Capital (2015). Highest Paying PhD Majors by Potential Salary: www.payscale.com/college-salary-report/majors-that-pay-you-back/phd