The minutes of the latest Federal Reserve meeting were the subject of intense interest to a subculture of a subculture: those economics bloggers who have advocated that the Fed adopt a policy of stabilizing the growth of nominal gross domestic product. They — OK, we — were excited because the minutes show that the Fed is interested in our idea.

True, the Fed ultimately rejected it. But those of us with an optimistic bent take heart in the flimsiness of its reasons for doing so. Perhaps it will take just a little more argument for us to carry the day.

Nominal GDP (NGDP) is simply the size of the economy measured in dollars, with no adjustment for inflation. In a year when the inflation rate is 2 percent and the economy grows by 2 percent in real terms, NGDP rises 4 percent. The NGDP targeters say that the Fed should aim to keep this growth rate steady.Christina Romer, the former chairman of President Barack Obama’sCouncil of Economic Advisers, suggested in the New York Times recently that NGDP should grow at 4.5 percent a year. If the Fed overshoots one year, it should undershoot the next, and vice-versa, so that long-term NGDP growth stays on target.

Like the more familiar concept of inflation targeting, NGDP targeting seeks to stabilize expectations about the future path of the economy, making it easier for people to make long-term plans. Keeping nominal spending, and thus nominal income, on a relatively predictable path is especially important because most debts, such as mortgages, are contracted in nominal terms. If nominal incomes swing wildly, so does the ability to service those debts. [Read more...]

Mississippi residents who haven’t had any luck finding a job might discover that their luck has changed soon. 

The Mississippi Legislature just approved the development of two new plants that will operate in North Mississippi, including Calisolar and HCL CleanTech. Together Calisolar and HCL CleanTech are expected to bring an estimated 2,000 jobs to the area. 

Huntington Ingalls, a ship building company that has a site at Pascagoula, is also projected to bring around 3,000 to the area within the next four years. Having large corporations set up shop in Mississippi has become something of the norm in recent years. 

The first large company to come was the Nissan plant, which opened in 2003, and now companies like Toyota and Winchester are settling in the North Mississippi area, taking full advantage of the large workforce that is present here.  

In an Associated Press story, John Correnti, chairman of the board for Calisolar, told the State Legislature that he plans on utilizing this workforce. “The reason we’re coming here, and I’m going to be frank, is the Mississippi farm boys and the farm girls,” Correnti said. “I wouldn’t trade a Mississippi farm boy or farm girl for any Russian, Chinese, Japanese, Mexican, South American.”  [Read more...]

Despite the struggling economy, recent polling numbers collected by the Mississippi Economic Council suggest that business and community leaders around Mississippi are optimistic about the state’s long-term growth prospects.

The poll found that nearly eight out of 10 interviewees believed that Mississippi could experience the same kind of growth over the next 10 years that other Southern states like Georgia and North Carolina have enjoyed.

“Throughout the state, we’re seeing a real belief that there are opportunities to grow,” said Scott Waller, senior vice president of public affairs for the Mississippi Economic Council.

Unlike many parts of the state, North Mississippi has already begun to show signs of this anticipated growth.

Max Hipp, president and CEO of the Oxford Chamber of Commerce, said that there are pockets of places all across the country that are really hurting, but that Northeast Mississippi is poised for future growth. 

“People are going to be seeking out places that are desirable to live, where there’s a quality of life, a variety of housing, a variety of job opportunities and we’ve been recognized as a place of economic strength for our size,” Hipp said. “Most people feel very positive around here about our future.”

In fact, Oxford was recently recognized as one of the top “micropolitan” cities in the United States. Policom, a company that specializes in studying localized economies, evaluated these cities, whose populations range from 10,000 to 50,000.  They ranked Oxford 26th out of 576 qualifying cities based on its consistent growth. [Read more...]

Flooding along the Mississippi River, already swamping cities and farmland and crimping business from river barges to casinos, could cost billions.

Although economists say it’s too early to tell how much damage the Mississippi and its tributaries might wreak along the states in their path, economist John Michael Riley estimates damages could run up to $4 billion.

“It’s not like a tornado disaster, where it’s over and the damage can be assessed,” says Jon Moen, who chairs the economics department at the University of Mississippi. “But we’re sure it’s going to have a pretty big impact. [Read more...]

 In the 1987 movie “Wall Street,” fictional character Gordon Gekko said “Greed, for lack of a better word, is good.” For the past few years, University of Mississippi economics professor Jon Moen has been using his research to understand the benefits and impact of greed.

Moen is researching the events surrounding the bank panic of 1907 and comparing them to the current economic crisis. Today’s problems, which stem from the 2007 -2008 financial meltdown, has resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. [Read more...]