Apricitas Economics

Apricitas Economics provides data-driven analysis on trends in economics, finance, and public policy, with a focus on monetary policy, banking crises, inflation, labor market dynamics, and the geopolitical implications of trade disputes. It explores the effects of these elements on the global economy and financial stability, leveraging current data and forecasting to outline economic outlooks and policy impacts.

Inflation and Disinflation Banking Crises and Financial Stability Trade Wars and Semiconductor Industry Economic Outlook and Growth Trends Labor Market Dynamics Real Estate and Housing Market Technological Advancements and AI Monetary Policy and Central Banking Entrepreneurship and Business Formation Geopolitical Economics and Sanctions

The hottest Substack posts of Apricitas Economics

And their main takeaways

Life After the Volcano

11 implied HN points • 08 Jan 22
  1. Young people who moved after a volcanic eruption had higher lifetime earnings and more education
  2. The US economy was expected to exit the pandemic stronger, but faced setbacks due to variants and supply chain issues
  3. Government responses to crises, such as the pandemic, led to economic benefits and improvements in state capacity

Banks Face a New Challenge

6 implied HN points • 18 Nov 22
  1. Commercial banks are facing new challenges with high inflation, rising interest rates, and Quantitative Tightening.
  2. Quantitative Tightening by the Federal Reserve is impacting bank reserves, interest rates, and financial conditions.
  3. Commercial banks are adjusting their assets, with a decrease in high-quality liquid assets and a rise in loans and leases.

The Inflation Outlook

10 implied HN points • 12 Jan 22
  1. Inflation has been high, with CPI increasing 7% year over year in December.
  2. Demand has shifted from services to goods due to the pandemic, impacting prices.
  3. There are signs that inflation may abate, with market-based measures of expectations retreating and aggregate incomes staying on-trend.

What's Going on With Housing Prices?

10 implied HN points • 18 Dec 21
  1. The US housing market is experiencing record-high prices and low inventory, causing a frenzy among buyers.
  2. Official government measurements of housing costs show a slowdown in price growth, while private data indicates significant rent increases.
  3. Understanding the nuances of home pricing, index construction, and market dynamics is crucial to make sense of the housing price trends.

Understanding Americans' Excess Savings

9 implied HN points • 15 Jan 22
  1. Americans have saved an extra $2.5 trillion since the start of the pandemic due to reduced spending and increased income.
  2. The rise in personal savings is linked to deficit-financed stimulus spending, impacting both households and corporations.
  3. Excess savings are held mostly by high-income Americans, influencing potential future spending and economic trends.
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The Life, Death, and Zombification of the Phillips Curve

9 implied HN points • 16 Oct 21
  1. The Phillips curve relationship between unemployment and inflation has become hard to spot and has almost completely broken down in the US over the last 20 years.
  2. Recent research suggests that the Phillips curve has always been relatively flat, and it may not be a robust framework for macroeconomic analysis.
  3. Using unemployment as a proxy for capacity utilization may not be reliable, and inflation is influenced by various factors beyond labor utilization, making the Phillips curve less relevant for monetary policy.

The Best of the Best: Who to Follow in 2022

8 implied HN points • 25 Dec 21
  1. The post lists various experts to follow for insights on economics and finance.
  2. Experts cover a range of topics such as global economy, public policy, labor market, and housing.
  3. The post expresses gratitude for the readers' support and shares plans for future content.

Korea's Trade Troubles

3 implied HN points • 17 Feb 23
  1. South Korea's economy initially rebounded strongly after the pandemic due to a good response and global demand for its manufacturing industries.
  2. Recent shifts in global demand have caused trouble for South Korea's exports, leading to challenges in international markets.
  3. Rising prices for key imports like energy have contributed to South Korea's trade deficit, impacting its overall economic output.

A Better Measure of the National Debt

8 implied HN points • 24 Jul 21
  1. Government debt is commonly measured in misleading ways, such as not excluding intragovernmental debt and Federal Reserve holdings.
  2. The best measure of the national debt focuses on interest expenses as a proportion of GDP, reflecting the true size and impact of the debt.
  3. Federal assets and liabilities need to be considered alongside the debt to provide a comprehensive understanding of the government's financial status.

Capitalism and the Surplus Economy

7 implied HN points • 02 Oct 21
  1. Capitalism won over extreme centralized planning of the Soviet Union, now standing alone as a system.
  2. In a capitalist economy, firms are constrained by profit and demand rather than resources.
  3. Surplus of inventories, capacity, and workers are common in capitalism due to firms' focus on profitability and uncertain consumer demand.

The Inherent Flaws in Inflation Measurements

7 implied HN points • 25 Sep 21
  1. Inflation measurement is complex and imperfect due to difficulties in pricing and quality adjustments.
  2. Different inflation indexes like CPI and PCEPI have significant methodological differences and impact on the economy.
  3. Business behavior, demand shocks, and market reflexivity can lead to temporary spikes in prices, affecting inflation dynamics.

Yes, Inflation is Transitory

7 implied HN points • 21 Aug 21
  1. Today's inflation is driven by abnormal, pandemic-related price increases and is not a result of monetary policy.
  2. Federal Reserve's policy aims for short-term above-trend inflation to improve labor market; they should continue expansionary stance.
  3. Current high inflation is transitory; distinguishing pandemic-driven from future framework-driven inflation is crucial for economic recovery.

The State of America's Labor Market

3 implied HN points • 07 Dec 22
  1. Employment in key sectors of the labor market is stagnating or shrinking due to various factors like rising mortgage rates and shifts in consumption habits.
  2. Wage growth remains uncertain due to discrepancies between household and business surveys, affecting the future path of inflation.
  3. Industries like education & health services and leisure & hospitality have seen robust job growth, while others are struggling to recover to pre-pandemic levels.

Tight Monetary Policy, Not Loose Monetary Policy, Has Exacerbated Inequality

7 implied HN points • 17 Jul 21
  1. Tight monetary policy, not loose monetary policy, has worsened inequality over the last 15 years.
  2. Monetary policy being too tight was a critical cause of the great recession and contributed to low economic growth and high unemployment.
  3. There is no direct connection between expansionary monetary policy and increased stock and real estate returns; the primary chain is supporting economic growth, not asset price inflation.

The Yield Curve is a Policy Choice

6 implied HN points • 23 Oct 21
  1. The Federal Reserve controls short term interest rates, expected future interest rates, term premium, and liquidity premium, making the yield curve a policy choice.
  2. Yield Curve Control (YCC) can be an effective tool for central banks to influence long term interest rates by setting yield targets.
  3. Understanding the Federal Reserve's ability to impact bond risk premiums and expected future interest rates is crucial for interpreting the yield curve in the context of monetary policy.

The Fault in R-Stars: The Problems in Policymaking Based on "Natural" Rates

6 implied HN points • 18 Sep 21
  1. Policymakers have put too much faith in unobservable 'natural' rate estimates, leading to catastrophic results.
  2. Estimates of 'natural' rates like NAIRU are problematic as they are based on unreliable data and lack predictive power.
  3. Policy should focus more on data-driven decision-making rather than relying heavily on inaccurate 'natural' rate estimates.

To Understand This Winter's Job Market, Focus on Layoffs

5 implied HN points • 07 Jan 22
  1. Focus on layoffs to understand the winter job market.
  2. High demand may lead to firms retaining seasonal workers instead of laying them off.
  3. The fight against COVID-19 continues to impact employment despite strong labor market conditions.

The Interpersonal Economy - Automation, Employment, and You

6 implied HN points • 14 Aug 21
  1. Automation in the modern economy does not necessarily eliminate human jobs, but rather changes the types of jobs and increases productivity.
  2. The shift towards a post-industrial economy has led to the growth of service sector jobs, with a focus on knowledge industries and interpersonal services.
  3. As automation grows, the future of work will likely involve a strong emphasis on interpersonal skills, alongside knowledge-based professions, creating opportunities for new types of jobs and economic growth.

Industrial America is Fighting Back

5 implied HN points • 04 Dec 21
  1. American manufacturing faced severe setbacks after the 2008 recession but is now rebounding due to a surge in consumer demand for goods.
  2. While American fixed investment has recovered post-COVID, it still lags behind pre-recession trends, with service industries impacting the shortfall more than manufacturers.
  3. The American manufacturing sector is showing signs of growth, particularly in areas such as transportation, oil and gas production, high-tech manufacturing, and industrial machinery, indicating a positive trend for the economy.

Why We Shouldn't Doom Over Labor Force Participation

5 implied HN points • 27 Nov 21
  1. Labor force participation rate may not be a reliable indicator of a permanent shift in the job market.
  2. Factors like retirements and parents needing to care for children may be temporary setbacks in employment.
  3. Historically, jobs lost during economic downturns have shown a strong potential for recovery over time.

Americans are Quitting Their Jobs: Here's Why That's a Good Thing

5 implied HN points • 13 Nov 21
  1. The tight labor market has led to a 'Great Reshuffling' of workers, with more Americans quitting for better job opportunities.
  2. The increase in quits is not just limited to high-paying industries or large companies, as younger workers in lower-paying industries are leaving their jobs at record rates.
  3. The Great Reshuffling is driving higher wage growth, decreasing inequality, and creating a more competitive labor market where employers are now competing for workers.

Rivalry, Innovation, and Speedrunning

4 implied HN points • 09 Oct 21
  1. Speedrunners use glitches to beat games fast.
  2. Decline in demand leads to lower investments in productivity.
  3. Competition drives rapid diffusion of innovations.

Student Loans are Bad Taxes

4 implied HN points • 11 Sep 21
  1. Student loans can be seen as a form of tax on former students, affecting low-income individuals disproportionately.
  2. The student loan system in the United States is flawed and needs reform to be fair and sustainable for students.
  3. Reforming the student loan system includes eliminating or capping interest rates, providing direct cash allowances, and expanding tuition-free education options.

Video Games, Price Architecture, and the Zero Marginal Cost Revolution

4 implied HN points • 28 Aug 21
  1. Video games are at the forefront of new pricing models, including zero marginal cost, leading to new ways of pricing goods and services.
  2. In the video game market, prices are influenced by anchoring and signaling effects, as well as practices like price discrimination and product differentiation.
  3. The zero marginal cost revolution in video games has resulted in complex price architectures and diverse revenue streams through methods such as microtransactions, subscriptions, and DLC.

Keep Enhanced Unemployment - Forever

4 implied HN points • 03 Jul 21
  1. Enhanced unemployment benefits were crucial for the recovery post-pandemic.
  2. Unemployment insurance supports income growth and helps maintain aggregate demand.
  3. Enhancing unemployment benefits has minimal effects on workers' employment incentives.

Fight Inflation - With Housing

4 implied HN points • 19 Jun 21
  1. Housing plays a significant role in inflation, impacting the economy and consumer budgets.
  2. Supply constraints in housing, caused by zoning regulations, contribute to rising housing prices.
  3. Solving the housing crisis can have wide-ranging positive effects on the economy and society.

What to Expect When You're Expecting Inflation

4 implied HN points • 12 Jun 21
  1. Inflation expectations play a crucial role in economic behavior.
  2. TIPS help measure expected inflation based on Treasury securities.
  3. Models and surveys help provide better estimates of inflation expectations.

The Borrower of Last Resort

3 implied HN points • 11 Dec 21
  1. Government debt-to-GDP ratios don't show the full picture of public debt - net interest costs as a percent of GDP are a better measure of the size of public liabilities.
  2. Shifts in economic fundamentals have led to record-high debt and record-low net interest payments, making fiscal authorities play a key role in stimulating credit and monetary growth.
  3. Low interest rates are driven by factors like ageing populations, income inequality, and fiscal stimulus, and central governments now often act as the borrower of last resort to maintain economic growth.

CPI Inflation Was 6.8% Over the Last Year. What's Driving Red Hot Inflation?

3 implied HN points • 10 Dec 21
  1. CPI inflation was 6.8% over the last year influenced by energy prices, cars, gasoline, and housing.
  2. Inflation is driven by unprecedented price increases in the goods sector where consumers spend a large share of their income.
  3. Household formation and a rebound in rent prices are impacting CPI and headline inflation measures.

The US Added 210,000 Jobs In November: Here are the Challenges Still Facing the Labor Market

3 implied HN points • 03 Dec 21
  1. The US added 210,000 jobs in November and unemployment rate decreased to 4.2%.
  2. The prime age employment-population ratio in the US is 78.8%, lagging behind peer nations due to different job support focus.
  3. Challenges in the labor market include sectors like leisure/hospitality facing slow growth and changes in employment patterns due to pandemic impact.

The Car Crisis

3 implied HN points • 20 Nov 21
  1. Cars are crucial to American life, with high demand and supply chain disruptions causing economic impacts.
  2. Shortage of vehicles is due to factors like supply chain issues, semiconductor shortages, and pandemic-induced demand.
  3. Rising demand for cars is linked to factors like increased personal travel, reduced use of public transportation, and school bus shortages.

CPI Inflation Was 6.2% Over the Last Year. What Does Future Inflation Have In Store?

3 implied HN points • 10 Nov 21
  1. Future inflation dynamics will differ from current inflation dynamics
  2. Current inflation driven by significant price growth in goods sector, expected to be transitory as supply chains normalize and spending shifts to services
  3. Rising service sector prices crucially depend on wage growth to support long-term increases

Stabilizing an Unstable Coin

3 implied HN points • 04 Sep 21
  1. Stablecoins are pegged to stable assets like the dollar and require centralized entities to manage these assets.
  2. Stablecoins like Tether have rapidly grown but face legal and financial risks due to lack of full backing and reserve composition.
  3. Partially collateralized stablecoins can face serious risks like the collapse seen with TITAN, highlighting the need for stronger regulatory oversight.

An International Comparison of National Debt

3 implied HN points • 31 Jul 21
  1. Comparing national debts between countries requires considering unique government structures and central bank factors.
  2. Using net interest expenses as a percentage of GDP is a clearer way to measure and compare national debts.
  3. Central bank policies play a significant role in determining the cost of debt and can impact economic growth in high-income countries.

Households Are Extremely Illiquid

3 implied HN points • 10 Jul 21
  1. American households have little savings, which is critical for understanding the economy.
  2. Most Americans do not have a 3-month emergency fund, especially in lower income households.
  3. Household illiquidity can lead to economic collapse during crises due to decreased spending and increased delinquencies.

Housing On the Margins

3 implied HN points • 26 Jun 21
  1. Restrictive zoning regulations raise housing costs and hinder economic activity.
  2. Local homeowner interests often prevent construction of new housing due to zoning politics.
  3. Aligning individual homeowner benefits with societal housing needs is a challenge in zoning policies.

Apricitas - an Econ Blog

3 implied HN points • 06 Jun 21
  1. The blog 'Apricitas - an Econ Blog' emphasizes the human aspect of economics.
  2. The blog aims to improve understanding of economic processes to make real-life improvements.
  3. The name 'Apricitas' represents positivity, optimism, and seeking truth through evidence.

Economics and Policy for a Better World

3 implied HN points • 06 Jun 21
  1. The focus is on Economics and Policy for creating a better world
  2. The author, Joseph Politano, provides insights on monetary policy, labor markets, business, finance, and more
  3. Readers can subscribe to get data-driven economic insights every Saturday

The Federal Reserve is Tapering Again. Did They Get it Right This Time?

2 implied HN points • 06 Nov 21
  1. The Federal Reserve is tapering its Quantitative Easing program, tightening monetary policy by slowing down its bond-buying.
  2. The focus should be on keeping nominal incomes on target to guide the economy back to full employment.
  3. Tightening monetary policy may be slightly premature due to risks in nominal output, declining fiscal stimulus, and the risk of getting stuck at 0% interest rates.

The October Employment Situation

2 implied HN points • 05 Nov 21
  1. In October, the US added 531,000 jobs and the unemployment rate dropped to 4.6%.
  2. The prime age employment-population ratio increased slightly but still lags behind pre-pandemic levels.
  3. Employment in leisure and hospitality sectors is still struggling to reach pre-pandemic levels, despite some recovery.