A busy week kept me from my appointed blog reading, and a vacation Sunday gives me the opportunity to recoup. The things I found:
The economic news of the week skewed optimistic, but was still not universally loved. Bizzyblog pronounces the advance 1st Quarter GDP report "very good news." Voluntary Exchange grades it a "high B." The Skeptical Speculator stamps the report "about as good as expected." But Barry Ritholtz says "use some common sense" and average '05 quarter 4 and '06 quarter 1 to get the big picture. William Polley also looks at the last two quarters and opines "acceptable but not breaking any records."(On the point of looking over the course of several quarters, there is an interesting picture at Economist's View on the seasonal pattern of GDP growth.) Jim Hamilton likes what he sees in the investment and export stats, but doubts that the rest of the year will be as "rosy." pgl takes some comfort in the recent path of government spending (but remains, I think, a rather grumpy Bear with respect to the longer-term prognosis). Andrew Samwick agrees it's a very good number, but frets about the low personal saving rate. Calculated Risk proposes that the trade deficit may bring downward revisions. I think Brad Setser would agree. And Mike Shedlock is the least impressed of all. Well, he and Mr. Naybob.
The canary watch continues in the real estate markets. Calculated Risk does its usual exemplary work on rounding up all the news you need to know about developments in residential housing: On existing home sales, on mortgage applications and rates, on new home sales (here and here)
No surprise that much of the week's focus was on energy prices of all sorts, and Econbrowser remains the gold standard for discussion on the topic. You will find there an explanation of how supply-and-demand and speculation are part of the same process -- a topic on which Arnold Kling shares some thoughts -- and a defense of (some of) President Bush's energy-related policy proposals. Also on the policy front, Greg Mankiw dissects the suddenly popular $100 rebate plan, and makes the case for a gasoline or carbon tax. Andrew Chamberlain dumps on the windfall profits tax. Lynne Kiesling wants Congress to take this test. Sun Bin thinks nuclear.
There was, in fact, much help to be found in sorting out the supply and demand basics of the energy situation. Although I don't endorse the name-calling, Captain Capitalism has a demand-side story to tell, in pictures. On the supply side, Steve Reardon observes that Nigeria is a problem. David. K Smith makes that point too, while itemizing the various supply and demand components of the oil-price story. Hispanic Pundit concurs: "It's as simple as supply vs. demand." You can find a lesson on how demand and supply works at Angry Bear. At Cafe Hayek and at The Commons Blog, there is more on the market in action. However, the Dallas Fed (via Mark Thoma) sees market interference in action. All of which is why Tim Schilling sees the oil price story as a prime opportunity to teach about how prices work.
Ther's more: Mike Moffat explores the connection between oil prices and the value of the dollar. Daniel Drezner asks "What Is So Special About Gas Prices?", and Jane Galt attempts to answer. Also at Asymmetrical Information, readers weigh in on three questions about the price of oil. Arnold Kling (in an exasperated tone) asks three really important questions about energy policy. (Aside: Drezner links to a Forbes article pointing out that "energy is an increasingly less important component to the American consumer." True -- Phil Miller has the picture -- but as I once noted, the share of GDP that we have to import has not fallen along with relative energy usage.) If you want to know how big a bite gas prices are compared to your brethren in other states, Environmental Economics has the map for you. Tim Iacono has last Monday's California SUV Fill Up Index, which may be obsolete by now.
Other trade/global-economy items: Don Boudreaux says worry about the fiscal deficit, not the trade deficit. (He takes on Paul Krugman on the issue as well.) On the other hand, Menzie Chinn wants you to know that, according to his calculations, the fiscal and trade deficits are connected. (While you are there, be sure to check out his post on new research on the sources of current account deficits.) Brad Setser offer his latest thoughts on dark matter. You might also detect bit of dark matter reasoning from the Bank of England's Monetary Policy Council, posted at the New Economist. Daniel Drezner reports that the U.S. Labor Department has decided to extend Trade Adjustment Assistance to service-sector workers who's jobs have been offshored -- more of whom will be in need, according to this post at Outsourcing Timers. Martin Feldstein (tip o' bowler to Mark Thoma) wants to see dollar depreciation. Simon World updates the progress on the Chinese march (or stroll, depending on your point of view) toward capital-control liberalization. See also William Polley's discussion of this point. While I am thanking MT, I'll add a gracias for this interview on the economics of immigration.
And even more on globalization and trade: John Irons promotes (apparently via Brad DeLong) a terrific review of Thomas Friedman's The World is Flat, from UCLA's Ed Leamer. (It's a very worthwhile 58 pages, but here is the short version: The world ain't flat, its small.) Mark Thoma channels economists Paul Krugman and Maurice Obstfeld, who provide their own presentation of some of the trade theory in the Leamer piece. Truck and Barter summarizes what looks like an interesting Scientific American article on globalization and poverty. (My quick take -- it's a good thing.)
Chairman Bernanke's testimony to the Joint Economic Committee received a fair amount of attention. At The Big Picture, the assessment was "the Fed is now more likely to stop at 5.0% than I previously believed," (which TBP is not putting into the good-thing category). Mark Thoma is of the same mind on the taking-a-break probability, and Tim Duy agrees that "Bernanke & Co. want to pause." But The Capital Spectator hears "no promises," and William Polley thinks the comments "a necessary step to pave the way for a pause, but not sufficient to guarantee that it will come in any definite time frame." Daniel Gross complains "Hear no inflation, see no inflation, speak no inflation". Calculated Risk highlights the Chairman's comments on the housing market ("most likely ... a gradual cooling rather than a sharp slowdown"). CR has items on both scenarios, here and here, and Daniel Gross has more. Environmental Economics notices BB's comments on energy prices (" Unfortunately there's nothing, really, that can be done that's going to affect energy prices or gasoline prices in the very short run.") John Irons points out Mr. Bernanke's skepticism about the proposition that tax cuts raise revenues.
Elsewhere on taxes: John Irons makes his case for comprehensive tax reform (though ends, I think, with some fairly modest proposals). Don Boudreaux suggests that maybe we ought to spend more time thinking about simplifying the tax system than worrying about high gasoline prices. Tax Policy Blog wishes you a Happy Tax Freedom Day. Dr. Eamonn Butler "celebrates" in the UK as well.
Worthy of notice:
As an antidote to Martin Wolf's contention that the "normal link between productivity and real earnings is broken," Gary Becker argues that rising earnings inequality in the United States is a symptom of productivity gains (though one that highlights the need to answer the vital question of why gains from human capital development are not more widely exploited). For a global perspective on the distribution of income, check out this post at Economist's View. For the theory piece of that conversation, EV has this post.
The Adam Smith Institute Blog honors the anniversary of the publication of The Theory of Moral Sentiments.
Edward Hugh notices that the "French Shop As Germans Save."
Mark Thoma reviews Martin Feldstein's review of the Economic Report of the President.
Greg Mankiw shares his opinions on the minimum wage.
Many have noted the passing of John Kenneth Galbraith. The Glittering Eye collects some of the reactions. Tyler Cowen bids adieu (or see you later, depending on what you believe about these things) to Jane Jacobs.