Science, dammit.

So this chart happened.


It looks like the Fistful of Euros model of the labour market has a serious problem, in that I can’t replicate JW Mason’s original results. The compositionally weighted ECI measure of earnings is more strongly correlated with the output gap, i.e. more cyclical, than the constant-weighted ECEC, at least for 2002-2014.

So I’ll have to change my mind. Hey, economics is a science, right?

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