Author Archives: dougunderscorehart

A Quick Update: Where Have I Been?

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Its been a while since I’ve published anything here so I thought I’d take a little bit of time while I have it to throw out an update, and let anyone who is curious know that I have not in fact fallen off of the face of the Earth.

What have I been up to you may ask? I have had a research project in the works for some time now which I hope to be sharing with you soon, however it has been slow in coming due to a scarcity of data, a more abstract concept and increasing demands for my attention elsewhere. In addition to increasing demands from my day job I have also taken up learning to program in the software programming language of Python, which as someone who does not come from an IT background has been somewhat of a challenge and has taken up much of my free time as of late.

While I expect to remain entrenched in the process of picking up the finer nuances of the Python language for at least the next month or so, I hope also to be able to set aside some time to bring some more updates to this somewhat neglected site in the coming weeks on topics both familiar and new. So for anyone curious to learn about what the U.S. economy can be expected to do in the beginning of 2016, or about the equitability of purchasing naming rights to major league sports venues, stay tuned! It (hopefully) won’t be long.

2015 U.S. Economic Growth Forecast Update

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After conducting some diagnostic work on my forecasting models for U.S. GDP growth and getting a clearer picture of the strengths and weaknesses of my models, its time to update my predictions for the remainder of the year, as well as take a quick look at how my previous predictions regarding the last several months have faired. To take a look at the specific diagnostic work that I conducted to test the accuracy of my predictive models and see what I found, see my previous post.

What I predicted several months ago was a spike in growth to above 0.3% in June and July, and then a drop off to around 0.2% for the rest of the summer, and then slightly lower growth still in the fall. What we have seen for the summer so far is a steady level of economic growth around 0.21%. Continue reading →

Forecast Calibration And The Importance of Out of Sample Diagnostics in Predictive Modeling

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Several months ago when I posted my predictions for growth of the U.S. economy for the rest of the 2015 year, I mentioned that I would be coming back and taking a more critical look at the accuracy of my results and challenging some of the assumptions that my prediction made. The time for that critical eye has come; today I am  evaluating the predictive capacity of my GDP growth forecast models from a historical standpoint. This process can be helpful to maximize forecasting accuracy, and is a good idea in general when producing forecasts as it gives us some actual evidence as to the quality of the predictions that we can make. Continue reading →

Seattle Minimum Wage Analysis: Going One Step Further

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About a month ago I talked about a study I conducted to estimate the effect that Seattle’s new minimum wage laws will have on the local unemployment rate, and today I take that analysis one step further and use what I gleaned from that study to estimate a couple of figures that might be more useful in interpreting the impact of the new policy. The first figure I estimate today is the amount of income redistribution that will take place once the new policy has been fully phased in; income redistribution from business owners to low wage workers being the intended effect of the new policy. I then estimate the unintended effect of the policy, the size of the deadweight welfare loss to society created by the policy through the resulting loss of jobs. In order to estimate these two amounts I combine my estimates regarding decrease in employment with demographic data provided by the University of Washington study “Who Would be Affected by an Increase in Seattle’s Minimum Wage?” that I referenced in my previous post. The UW study does attempt to estimate how much income will be redistributed to low wage workers, but explicitly assumes that there is no change in employment within the city due to the new policy, an assumption it strongly cautions will not hold in the real world. Continue reading →

Grexit: Greek Anti Austerity Position Compounding Problems Within Greek Economy

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For those who haven’t been following the Greek default situation that has developed over the past few weeks, grexit means Greek exit: from the Euro, and likely the EU as well. Over the last week or so negotiations have been held in order to try to keep Greece from missing a 1.72 billion euro payment and therefore defaulting on its loans from the International Monetary Fund, but they have broken down in large part thanks to the current Greek prime minister who was voted into office in January running on a platform of among other things saying no to national austerity. It seems as though on this front Mr. Tsipras has managed to keep his word, but his country is so far not looking the better for it. The recently elected prime minister was betting that the rest of the EU would fold and bail them out in the name of keeping the country from leaving the EU and setting a precedent regarding ejection from the union that could lead to a further collapse of the union down the road. This turned out to be unfounded however as leaders from the rest of the European states stuck to their guns about conditions regarding a bailout and no deal was reached. Now Greece has defaulted on its loan, its credit status has been downgraded, and it may now be facing ejection from the Euro and with it the EU. A vote took place on Sunday by Greek citizens on weather or not to accept reform and fiscal adjustment programs designed by the rest of Europe to move Greece in the direction of being in a position to feasibly start paying back more of the debt it owes to the rest of Europe. The reform plan had already been officially taken off of the table by that point amid the negotiation break down so rather than having any sort of an actionable outcome either way, what it basically came down to was that a yes vote would be a show of good faith by the Greek people that they are willing to tighten their belts and do what needs to be done to pay back what they owe as a nation. This is not what the world got, which shouldn’t be a big surprise in retrospect given that this is the same outcome of saying no that prevailed in moving Mr. Tsipras into office in January. Continue reading →

Forecasting U.S. Gross Domestic Product For 2015

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This week I have decided to tackle a less regional issue in favor of something with a little more widespread applications – specifically the U.S. economy as a whole. I am taking a look at the direction that the U.S. economy is headed in in the near future. The primary way that any nations economy is measured is by its gross domestic product. Gross domestic product is formulated by adding up the total value of all of the nations goods and services produced within the given measurement period – it encompasses the entire economic output of a nation, and this is what makes it such a useful way to check a nations economic pulse. So when you want to know what the economy is doing, this is where to look. Continue reading →

Seattle Minimum Wage & Unemployment

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Last month the city of Seattle enacted a new much talked about minimum wage ordinance that brings wages within the city to $11 per hour immediately and up to $15 per hour within the next three to seven years, depending on the size of the company. This is a sixteen to sixty percent increase over Washington state’s minimum of $9.42 and puts Seattle at the highest minimum wage in the country.

No doubt this will be a boon to workers within the city that can hold on to low wage positions, but how will this change effect employment numbers within the city? The laws of supply and demand dictate that at a higher price floor, the amount of labor that the market can support will decrease, so there is little doubt that there will be some layoffs, or at least a tightening of new hires. It has been argued in the past that small changes to the minimum wage rate have not had much of an effect on the unemployment rate, but at up to sixty percent this is no small change. So as an economist my question is, exactly how big of a hit is the unemployment rate going to take? Continue reading →

My first post: an introduction

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Hello, and welcome to curious economist. I am a little new to blogging and have heard that a good way to start is to lead off with an introductory post, so here it is. This blog will focus on the process/results of my independent research which will largely consist of forecasting and statistical studies focused on answering specific questions. I may occasionally talk about economic issues pertaining to application of theory as well, in order to keep things going while I am in the process of conducting the research that will go into the primary posts. Because data gathering and analysis can take some time, and I have a day job to deal with as well, I’m not yet sure how often the regular posts will come, but it’s my hope that I’ll be able to find a happy balance for my time use that won’t leave the site bereft of updates for too long at a time.

As for the content of my research, I don’t really have a specific field of interest so the topics will likely vary and include anything that catches my attention and has sufficient publicly available data to work with. It’s my hope that I can drum up enough questions to answer that are if not interesting then at least relevant that you will be interested in the answers I find as well, and that the site won’t get stale.

So, that being said, let’s start asking some questions and see what interesting things we can find. If anyone out there has any research suggestions or questions about the work I’ve done, don’t hesitate to leave it in the comments.