Steve Murdock is hoping for a “real job.”
My dad (who was politically liberal, BTW) used to say that he could never be “unemployed.” He’d go door-to-door selling pencils, then take the money and buy some more pencils wholesale. Indeed he made good money as a 12 year old in 1933, scrounging around for scrap metal and other odd jobs. He also understood that not everyone could do this as well as he could, which is why he was an FDR Democrat.
Most people distinguish between “real jobs,” and ways of scrounging up some money when unemployed. I’m pretty sure Tyler Cowen agrees with that distinction. Where we disagree is whether sticky wages force people to move from real jobs to scrounging-up-money jobs. Tyler has a post where he discusses an unemployed man’s attempt to scrounge up some money picking up empty cans, and then says this:
It is difficult for me to see how Murdock’s predicament “” is it a typical one? “” is well-described by the theory of nominal wage rigidity. I don’t mean to bait Scott Sumner, but I will again mention the difference between “nominal aggregate demand” and “real aggregate demand.” If society were much more prosperous and people had higher real wealth-backed demands to buy a lot more products, Murdock probably could get a traditional job of the kind he is seeking. In this sense you can attribute Murdock’s joblessness to a shortfall in aggregate demand. That said, it is not clear why juicing up nominal variables should do very much for him. His wage and workplace condition demands are already quite flexible, as he is willing to settle for what he can get. Is money illusion his problem? It seems there is no need to trick him, using monetary policy, into a lower real wage.
A few comments:
1. In my view there is no such thing as “real aggregate demand.” There is nominal aggregate demand, SRAS, and real output. I understand that others disagree. But “real aggregate demand” only confuses issues.
2. I’d guess Murdock would like a shiny new pickup truck, and a job in an auto factory making $25 hour.
3. He can’t get those things because of sticky wages. But (and this is where people are confused) not because wages are sticky in the auto industry (they aren’t that sticky) but rather because aggregate wages are sticky. That makes aggregate wages too high for full employment. And if he goes to a factory offering to work for 1/2 the wage as an equally good current employee, they won’t hire him. It’s not wage rigidity of the unemployed that is the problem, it’s sticky wages attached to jobs, not attached to people.
4. If aggregate wages were flexible, the current level of NGDP (higher than in 2007) could support many more jobs.
5. Of course wages are not flexible, but if NGDP was raised sharply then aggregate nominal wages would not rise as fast, allowing more jobs for Murdock making pick-up trucks, and more income to buy those pick-up trucks. This is what “Say’s Law” is really trying to “say.” If we can produce more stuff, society will be rich enough to buy that extra stuff. No matter how much we produce, there is always some price level where we are rich enough to buy all the stuff.
6. I’m wrong if structural factors like extended unemployment benefits have raised the natural unemployment rate to 8.5%. (Unlikely.) Interestingly, I’m not wrong if the 40% jump in the minimum wage a few years back raised the natural rate of unemployment, as monetary stimulus would lower the ratio of the minimum wage to NGDP. That’s the key variable, not “real wages.”
I believe Tyler is wrong because he assumes that what he observes is inconsistent with the sticky-wage model. Just the opposite. Indeed if there weren’t people like Steve Murdock picking up cans I’d completely abandon my belief in the sticky-wage model. If all the unemployed were watching TV, and none were trying to scrounge for cash, I might become one of those conservatives who believe unemployment is “voluntary.”
I think it’s useful to think of people who are unemployed as being forced out of the high productivity sticky-wage sector where they can work with lots of expensive capital to make pick-up trucks, into the flexible-wage scrounging economy where they can pick up cans, play guitar for tips, do odd house repair jobs, babysit for money, prostitution, deal drugs, etc, etc. Because these jobs are less productive, RGDP falls. And because they pay less than regular jobs, some people who aren’t desperate will rationally choose to watch some TV instead of working. That would probably be my choice (internet, not TV.)
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19. January 2012 at 15:34
If you believe in the importance of prices, why would you believe in “real aggregate demand”? We express demand through money offers, not goods and services offers.
Treating money as some dispensable epiphenomenon is implying that we are “really” running giant barter economies. But we are not. Money performs genuine functions, which exist for powerful reasons. One way we can tell this is when people “abstract away” from money to the “real economy” they do it by keeping one of the key functions of money–providing a public, common measure of exchange value via “real dollars”. We may be stuck with that for measuring output, given we actually produce goods and services, but it is just silly to suggest that makes sense for measuring demand which is not, in any useful sense, expressed through goods and services. Which is why little things like money velocity matter.
19. January 2012 at 16:31
Uau! No mention of multipliers and such!
Welcome back Scott!
19. January 2012 at 17:14
“Interestingly, I’m not wrong if the 40% jump in the minimum wage a few years back raised the natural rate of unemployment, as monetary stimulus would lower the ratio of the minimum wage to NGDP. That’s the key variable, not “real wages.””
I’m not sure what minimum wage has to do with it – if monetary policy can hit any NGDP target, then if an NGDP target were enforced, the minimum wage policy becomes a pure structural issue. In that sense, it’s a distributional and efficiency question – would we rather have a higher minimum wage or have a lower minimum wage and higher taxes to provide income transfers like food stamps (also rising)? Or, more poverty…
I think I’d like your dad.
19. January 2012 at 17:40
Lorenzo, I agree.
Marcus, Yes, but didn’t you suggest over at Hawtreyblog that I screwed up? 🙂
Statsguy, It depends whether the minimum wage is set in nominal or real terms. If in nominal terms then monetary stimulus reduces it. A high minimum wage (above equilibrium) can increase unemployment.
19. January 2012 at 17:52
I think the Murdock story has two parts. The competitive-employee story, and the general-economy story.
The general-economy story isn’t very controversial – all controversy is about explaining why the economy is so far off of capacity (especially human capacity) and what to do about it. I think we all agree that if the general labor participation rate were say 5pt higher some number of Murdocks would be employed again. But…
The competitive-employee story – Murdock didn’t finish high school. When he had money, he spent it being nice to people he cared about, rather than on self improvement or saving. (That’s not a bad choice, but it was a choice.)
So the question we must ask is “If a big auto-factory needing many workers opens near Murdock tomorrow, will he in fact have the skills to get a job?”
He obviously has a willingness to work, a need to work, and apparently some reasonable work history. But will that get him a job, or let him keep a job, in a modern auto factory? Or anywhere else in an economy not overheated by a bubble?
I would very much like to see a good explanation, from anybody, how sticky wages alone explains how people ill prepared to participate in current market jobs would be employed by lower market wages. And an analysis of what part of the pool of the unemployed is “priced out” versus what part of the pool the unemployed is “obsolete”.
19. January 2012 at 17:53
One of the (several) good things about New Keynesian macroeconomics is that some (early) New Keynesians actually formalised Scott’s main argument here. They called it the “Aggregate Demand Externality”. For a given downward-sloping AD curve, if everyone else raises their nominal price (or wage) that worsens my opportunities. Can’t remember any references offhand, or how to give a full explanation of their results.
19. January 2012 at 18:01
There is one meaning you can give to “real aggregate demand”. But on closer inspection it turns out to be the same as either: the labour supply curve (“We don’t want to consume any more stuff, so what’s the point of working so many hours?”); or intertemporal preferences (“We want it next year, not this year”)
(One of the problems with later New Keynesians is that they confuse AD in the sense of intertemporal preferences with AD in the sense of the flip-side of the demand for money. But that’s a whole other question.)
19. January 2012 at 18:18
Nicely put. I find the concept of “real aggregate demand” rather unnecessarily confusing. It’s a bit like the “real demand for money”: it’s something one has to learn to understand the history of economics, but I’ve never actually found it useful in thinking about a pressing economic problem.
19. January 2012 at 18:50
Bryan, Those are good observations, let me give you two different replies:
1. The sudden rise in unemployment in 2009 was not associated with residential housing, for the most part. So it doesn’t seem to fit the “bubble bursting” model, although many assumed it did. Rather it seemed like a general AD shortfall, that affected many industries.
2. With stronger growth there can be ripple effects. Maybe that guy can’t work at a modern auto plant. But maybe someone who can has lost his manufacturing job and is unloading boxes at Walmart. The new auto plant hires that guy, freeing up the unloading boxes job for Mr. Murdock. Obviously a hypothetical, but you get my general idea.
Our economy actually has lots of low tech industries. One used to need to know some math to operate a cash register. Now you push the button with the picture of a Big Mac, and the computer does all the work.
Nick, Very interesting observations.
19. January 2012 at 19:26
blah blah blah…
this is a PURE Morgan’s Guaranteed Income story
Stats,
“I’m not sure what minimum wage has to do with it – if monetary policy can hit any NGDP target, then if an NGDP target were enforced, the minimum wage policy becomes a pure structural issue.”
Wrong.
Even without my genius “auction the unemployed” model, under a NGDP target, unemployment becomes a 100% problem with gvt. policy.
Once you lock down at 4% NGDP, when unemployment runs hot that means we should have run an oil pipe line super highway through every wetland in America.
A level NGDP target isn’t just a glorious “growth cap” that pisses on booms, it is a morality auction block – we will sell our morality, pimp out children, sell military power to he highest bidder, whatever it takes – to make sure we don’t bastardize our hardened currency.
19. January 2012 at 19:31
“we will sell our morality, pimp out children, sell military power to he highest bidder, whatever it takes – to make sure we don’t bastardize our hardened currency.”
Am I to take it that is the Tea Party position too?
19. January 2012 at 20:26
unemployment, one of the deep mysteries. thoughts/observations:
– just as with prices, relative wages are important, and just as with price stability, IMO nominal GDP targeting holds aggregate nominal wages (70% of GDP) stable preserving (maximizing) the information in relative wages.
– companies could adopt more variable compensation (many do) to make wages more flexible; there are lots of ingenious experiments/schemes for pay in many industries to reward productivity; companies could dole out across-the-board x% wage cuts to cut costs to preserve output capacity / jobs (been done too). yet, in spite of all this companies by and large cut jobs, not pay. in other words, they cut production capacity, not wages.
-Moreover, one of the first questions HR asks is what are (or were) you making in your (last) job. They are deeply reluctant to offer less.
– There are fixed costs to changing jobs, some larger than others depending on the change. types of labor have varying degrees of substitutability (an unemployed construction worker cannot get a job as a nurse or pharmacist without a college degree). Companies do not like to offer on-the-job training either.
– at medium / large companies, HR bends over backwards to place you in another open slot (or encourage you to look at other openings) before they lay you off, even if that job pays less, and very often will impose a “freeze” on external hiring during lean times to encourage placement of internal job seekers.
– unemployment has been a phenomenon since before the industrial revolution. prior to unions i think wages were more flexible and labor was more substitutable.
– Companies fire workers and outsource all the time (BoA just fired a bunch of Risk people and is hiring back consultants to fill those positions, many of those consultants are the people they fired who now work for less).
– the stickiness of wages ought to say something about the time-to-adjust (length of the recession) as well as the depth (due to the productivity shock). if aggregate wage stickiness alone is to blame for mass unemployment, i do not see why this recession would be longer than the 2000/01 recession.
i’ve always been skeptical of the wage-stickiness hypothesis of mass unemployment. if that were the case, more variable compensation would solve the problem (which, many companies already do yet layoffs still occur). I do not see a lot of wage inflexibility among workers, or sudden “productivity shocks” that would suddenly change wages. search costs, yes- there are large fixed (education) costs for the employer and employee to changing jobs, and I see a lot of capacity cutting when companies see changes in relative demand in their industry.
Now, when overall wages drop its hard for me to tell if its a signal to get out of that line of work or if the economy is just bad. So, it seems to me that we want to preserve the information in relative wages by keeping nominal income steady (nominal GDP is 70% wage income) and smoothing the transition between jobs.
19. January 2012 at 21:00
Really, Scott Sumner is getting it right, and other economists are muddling along.
Market Monetarism makes sense, in both theoretical and practical senses.
My guess is that the resistance to MM (and Sumner) comes from liberals who love Keynes and government programs, or conservatives who want Obama to lose, and thus want tight money for now. Of course, there are the gold-worshippers and those halfwits who pompously prattle about paper currency as a store of value.
This is a motley crew of disenchanted, and often Sumner has to convince “economists” that, no, scoring more touchdowns won’t win baseball games.
Egads. Please, can we just appoint Sumner to replace Bernanke and give MM a try?
19. January 2012 at 21:16
I think sticky wages are attached not just to actual jobs but also to job descriptions in the abstract, because of adverse selection issues. If you create a new position for a person with a given set of qualifications, the quality of the applicants you get (which you won’t be able to observe fully until after you hire someone) will depend on the wage you offer. If you offer less than the “going wage,” the only applicants will be people who are desperate. During a recession, this “desperate pool” will include a fair number of high-quality workers, so you could still get lucky. But your odds improve if you offer at least the “going wage,” in which case your pool will include not only the desperate applicants but also non-desperate applicants, among whom there will be a larger fraction of high-quality workers. If you express expected applicant quality as a function of the wage offered, there is a discontinuity at the “going wage,” so it is usually advantageous to offer the “going wage” even if you would expect to get plenty of qualified applicants at a lower wage.
19. January 2012 at 22:27
“Now, when overall wages drop its hard for me to tell if its a signal to get out of that line of work or if the economy is just bad.”
This is the real problem, we have no signalling about the difference between $1 per hour jobs, $3 per hour jobs and $5 per hour jobs in the global market place.
20. January 2012 at 00:57
I thought I understood market monetarism fairly well, but Scott’s point number 3 has me confused. I thought unemployment in a recession resulted from the real wages in most sectors becoming too high for entrepreneurs to hire people, because nonwage-prices fall and wages are rigid.
Scott’s explanation confuses me, because it makes it sound like it is high wages in _other_ industries which make hiring in e.g. the auto industry unlikely (“not because wages are sticky in the auto industry (they aren’t that sticky) but rather because aggregate wages are sticky”).
Later on he seems to give a second explanation, that it is indeed wages in the auto industry itself which are sticky (“And if he goes to a factory offering to work for 1/2 the wage as an equally good current employee, they won’t hire him.”)
Am I right to infer that there are not one but two causal mechanisms that lead to unemployment in a recession caused by a dip in nominal gdp, i.e.
1. too high real wages in most sectors prevent more people from being hired in the sectors where real wages are too high
2. ??? (something to do with too high _aggregate_ wages, I don’t understand this one, so please help me out)
Thank you very much.
20. January 2012 at 01:01
I really love posts like these.
I get why you (and I) prefer monetary policy over fiscal stabilization.
But my thinking is: If we can’t get NGDP targeting, then an FDR type of “New Deal” would certainly be better than what we have now.
Do you agree?
Also, do you overall approve of FDR?
Would you have been a FDR Democrat in the 1930’s?
Germany also had/has “kurzarbeit”, what do you think about that?
20. January 2012 at 05:50
Not enough emphasis on robots, who now have the $25/hr auto jobs.
20. January 2012 at 06:53
“In my view there is no such thing as “real aggregate demand.” There is nominal aggregate demand, SRAS, and real output.”
Aggregate demand = the AD curve.
SRAS = the AS curve.
Real output = the value on the Y axis where AD and SRAS cross.
Price level = the value on the P axis where AD and SRAS cross.
Is this correct? What then is nominal aggregate demand?
20. January 2012 at 07:09
wrt the last paragraph, is there something to be said about needing NGDP growth in order to solve the “unemployment problem” of ATM’s replacing bank tellers? That is, when someone says to not worry about unemployment caused by automation because that labor will be redeployed somewhere else (as in the transition from agriculture to industry), isn’t that move dependent on sufficient NGDP growth to properly adjust the ratio of variable costs such as wages to fixed capital costs to the new level of possible operational leverage – by allowing the real value of labor to decrease substantially while the real value of capital stays level? What would happen without that NGDP growth, and is this consistent with what played out during the industrial revolution vs. the gold standard?
20. January 2012 at 07:10
statsguy, Do they have a position?
dwb, You said;
“the stickiness of wages ought to say something about the time-to-adjust (length of the recession) as well as the depth (due to the productivity shock). If aggregate wage stickiness alone is to blame for mass unemployment, I do not see why this recession would be longer than the 2000/01 recession.”
Actually it’s not, it’s just way deeper because NGDP fell more and recovered very weakly. During 2000-01 recession the unemployment rate kept rising several years into the recovery. But from a much lower level.
You said;
“unemployment has been a phenomenon since before the industrial revolution. prior to unions i think wages were more flexible and labor was more substitutable.”
Wages in the depression of 1921 were much more flexible, and the recovery was much faster.
Wages were more rigid in the Great Depression, and the recovery was much slower.
Companies cannot solve the problem by making their own wages more sticky, because it’s an aggregate problem (fallacy of composition.)
Andy, I agree, but I’d strongly emphasize two points:
1. You are describing real wage rigidity, which is a separate problem from nominal wage rigidity. The evidence of nominal wage rigidity is overwhelming, indeed beyond dispute. As far as real wage rigidity, I’m not sure the evidence is quite as strong, but I suspect you are right.
2. The interaction of the two (in some models) makes the situation much worse. And of course that’s not to mention price rigidity.
berhard, Think of it this way. Let’s suppose I’m right that wage rigidity is a problem. Now suppose all wages are rigid, and a NGDP shock causes a recession. Now suppose one industry moves to flexible wages, say the auto industry. Obviously it’s just a tiny share of GDP, so a negative NGDP should would still cause a recession, and mass unemployment. Million lose their jobs. The wage flexibility of the auto industry allows them to keep prices competitive, but they’ll still lose lots of sales because of the mass unemployment. In other words, sales fall for two reasons during recessions, the wage/price diequilibria, and the mass unemployment. Wage flexibility at the individual level helps one problem but not the other. Wage flexibility at the aggregate level, also prevents the mass unemployment.
JL, No, I’m afraid I don’t really “approve” of FDR. I think his dollar depreciation program was wonderful, and helped jump start the recovery. But I don’t like his other policies at all, not to mention that he was quite bad on human rights (although that was admittedly a reflection of his time–which makes it hard to evaluate any leader in earlier eras.) Most New Deal programs slowed the recovery (especially the NIRA.) And he created big futures problems by creating a PAYGO Social Security System. It should have been fully funded with individual accounts.
I probably would have voted for him, mostly a reflection of how bad the GOP was back then.
John, Robots aren’t the problem, they are the solution.
20. January 2012 at 07:13
Peter, I prefer to define AD as a hyperbola, a fixed amount of NGDP = P*Y. Others prefer different definitions.
Neal, In the short run lack of NGDP can be a problem. In the long run wages can adjust to any level of NGDP. But the adjustment may be long and painful.
20. January 2012 at 07:27
“I prefer to define AD as a hyperbola, a fixed amount of NGDP = P*Y. Others prefer different definitions.”
This sounds a bit weird to me. Isn’t the aggregate demand curve something real that we could, potentially, measure? Doesn’t the curve depend on central bank policy?
20. January 2012 at 07:58
Off topic (apologies):
On the topic of charging a fee on excess reserves mentioned in the FAQ section: what prevents a bank from simply lending the money out to it’s own management and having them promise not to do anything with the money? This seems to me to achieve the same thing as a 0% interest deposit, such that lowering the interest on stored reserves beyond 0% will have no real economic effect (no money circulation). This is probably not the only workaround.
Do banks need the help of the Fed to sit on money? Why would they pay for that service?
20. January 2012 at 08:11
Scott you said:
” During 2000-01 recession the unemployment rate kept rising several years into the recovery. But from a much lower level.”
Can I ask why you think that was?
20. January 2012 at 08:33
Off topic – but perhaps important: Story about TIPS on CNBC
“Inflation Bond Sale Fetches Negative Yield for First Time”
http://www.cnbc.com/id/46070802
20. January 2012 at 08:36
I love when someone brings up “robots” or automation and it’s effect on employment. There is NO circumstance that higher productivity is a net negative. The point of economic activity in general is not to “provide jobs”, it’s to create value, and to the extent that automation lets you do so with fewer inputs, that’s a good thing. In the long run this will probably increase income inequality, but the standard of living of low income earners will be so high that the measure will be effectively meaningless; leisure will substitute for labor even more when demand for labor is lower.
20. January 2012 at 09:36
“In the long run this will probably increase income inequality, but the standard of living of low income earners will be so high that the measure will be effectively meaningless”
Right. Because
a) income gains are widely shared, if unevenly, and besides,
b) large increases in inequality lead to uncontroversial program of redistributing income from the top to the bottom.
20. January 2012 at 11:34
Hi Scott.
“(and this is where people are confused) not because wages are sticky in the auto industry (they aren’t that sticky) but rather because aggregate wages are sticky.”
What do you believe is the mechanism by which wages can be flexible in individual industries but still sticky in the “aggregate”? Are you suggesting a dynamic beyond government restraint on market clearing?
20. January 2012 at 18:41
Wage rigidity, AD, and Total Cost of Employment.
Various commenters offer various observations about how employers in general actually behave, and in particular offer various explanations for why wages are sticky.
I’ll offer a couple more:
1. The cost of employing somebody is the sum of the costs of support (capital, org internal services), taxes, various optional and mandatory insurance, and the wages. I call this the Total Cost of Employment, or TCE. And I observe that parts of the TCE are fixed, and other parts don’t move proportionaly to wages. What’s more, unemployment is currently at its worst among those with low nominal wages, which I presume (error?) have high TCEs compared to wages.
And so lowering the reported market price of labor (wages) in either nominal or real terms, may not lower the actual cost (which one assumes drives the market) for labor as much as one would think.
I think this does help explain lay-offs versus reduced pay – the lay-off will often take out the “hidden” parts of TCE, while the reduced pay may not. Remember that in large orgs there will be ripple effects – every 5 salespeople require a manager, every 15 add an IT person, every 25 add one more janitor, the whole set requires another HR person. What’s more it’s often the case that the “back costs” of a part time person are every bit as much as for a full timer, and they’ll be largely the same for $10/hr employee or a $25/hr employee.
Hence, one reason for layoffs versus wage reductions.
2. Employers do not consume labor – the CUSTOMERS of employers consume labor. If I run a business, and 6 people can meet 100% of demand, then even if the cost of extra people is $0.01 per hour, I am unmoved to hire them. What’s more, because idle people impose high costs (consume management time, create accident risk, etc.) there is no such thing as a “free” employee and I don’t want any such people in my facility.
#2 implies that growing AD will eventually grow employment, which is not exactly a controversial position.
It also suggests that unsticking wages may have less effect than we would hope.
21. January 2012 at 10:37
“You are describing real wage rigidity”
No, wages are defined in nominal terms. The going wage is whatever it is, in nominal terms, and by default it doesn’t change. If labor is plentiful, you won’t be inclined to raise the nominal wage (except if convention dictates a certain annual raise), even if there is inflation. But you won’t be inclined to lower the nominal offering wage either, because that will result in a bad applicant pool.
21. January 2012 at 12:23
Peter, No, it depends what you “hold constant,” just like with ordinary demand curves.
rademaker, If the Fed doesn’t want the banks to sit on $2 trillion in reserves, they can easily write rules that the banks can’t work around. $2 trillion is not easy to hide, and bankers don’t really want to go to prison. Recall that base money not held at the Fed must be held as currency, and only banks are allowed to hold base money at the Fed. Can you imagine Presidents of Citibank and BOA putting $100 of billions in cash under their beds? I don’t think so.
ChargerCarl, It’s true to some extent for the last three recessions, which are the three during the Great Moderation. I’m not sure why, but David Eagle claims it might be because the Fed is now doing inflation targeting, rather than price level targeting. So when we fall in a hole, they start digging sideways.
Thanks Bonnie,
CThorm, I agree.
David, That’s a very complicated question, and I’d suggest you look at the “externalities” papers discussed by Nick Rowe. Most people have trouble visualizing this issue, because there are two types of wage stickiness, real and nominal. And they can interact. So the nominal stickiness in the overall economy produces cyclical effects in certain industries. Even if those industries have some real wage flexibility, it’s not enough to overcome the nominal stickiness in other areas, especially government, education and health care.
Even in the auto industry there is probably some nominal stickiness. Take this example, suppose M and NGDP suddenly fall by 1%. But a 1% fall in the equilibrium nominal wage isn’t enough to cause contracts to be renegotiated, so employment falls 1%. A few industries which are very cyclical might then reduce wages by 3%, but it won’t be enough to keep the overall W/NGDP ratio from rising.
Bryan, I think that less sticky wages would help a bit, but realistically the only solution is better control of NGDP growth.
Andy, It’s true that real and nominal wage stickiness interact, but fundamentally the nominal stickiness is the much harder one to explain. It’s long been known that if contracting were costless, and if there was no money illusion, then any factor like adverse selection could only make real wages sticky, not nominal. Thus monetary shocks should have no real effects in an economy with 100% perfect wage indexing. But you still might have unemployment due to real stickiness (adverse selection, efficiency wages, etc.) I agree that given that nominal wages show stickiness, the adverse selection can make those wages even stickier. But with perfect indexing, adverse selection wouldn’t be enough to cause nominal shocks to have real effects–that was my point, although probably poorly stated.
21. January 2012 at 14:57
[…] Scott Sumner writes: Most people distinguish between “real jobs,” and ways of scrounging up some money when unemployed. […]