What is normal?

 

This week the Washington Post ran an article declaring High interest rates, rising inflation: The economy still isn’t normal. 

But what is normal?

This is 30 year mortgage rates since the 1970s

Here is the inflation rate since the 1950s

Here is the unemployment rate since the 1950s

At 3.8 percent the unemployment rate is at levels that we had not seen since the late 1960s. The rate of inflation of 3.5% is also low in comparison to much of recent economic history. 

When I first began to study economics in the 1980s the combination would have been regarded as miraculous. Even after people believed the Volcker had beaten the inflationary expectations out of people, no one was predicting a such a low combination of unemployment and inflation. 

Even interest rates, which have increased in recent years in response to Federal Reserve policies, look relatively low compared to the late 20th century.

I have to admit it does appear that current economic conditions are not normal. Perhaps we should be grateful.

 

Updates on UMW Econ Alumni: Christine Exley

 Christine Exley graduated from UMW in 2009. She went on to earn a Ph. D. in economics from Stanford University. She taught for several years at Harvard Business School and is currently associate professor in the Department of Economics at the University of Michigan.

Christine has published extensively in the top journals in economics.

Examples of recent work include

The Gender Gap in Confidence: Expected But Not Accounted For

and 

Nonprofits in Good Times and Bad

Updates on UMW Econ Alumni: Sierra Latham

 Sierra Latham graduated from UMW in 2009. Since then she has earned masters degrees as Georgetown University and University of Chicago, worked at the Urban Institute and for the City of Alexandria. She is currently a Senior Research Analyst at the Federal Reserve Bank of Richmond.

Here is some recent work she has done on 

Measuring Poverty 

and

Regional Housing Supply

Updates on UMW Econ Alumni: Alli Baranski

 Alli graduated in 2018 and is currently an assistant manager at the Federal Reserve Bank in Kansas City. 

Here is a recent article she coauthored on small business lending.