Inflation rose in May, new data show

William J. Luther is the director of AIER’s Sound Money Project and an associate professor of economics at Atlantic University in Florida. His research primarily focuses on currency adoption questions. He has published articles in leading scholarly journals, including the Journal of Economic Behavior and Organization, Economic Inquiry, the Journal of Institutional Economics, Public Choice, and the Quarterly Review of Economics and Finance. His popular writings have been published in The Economist, Forbes and US News & World Report. His work has been featured in major media outlets, including NPR, the Wall Street Journal, The Guardian, Time Magazine, National Review, Fox Nation and Vice News.

Luther earned his MA and PhD. He holds a BA in Economics from George Mason University and a BA in Economics from Capitol University. She was a participant in the AIER Summer Fellowship Program in 2010 and 2011.

Selected publications

“Cash, Crime, and Cryptocurrency.” Co-author with Joshua R. Hendrickson. Quarterly Review of Economics and Finance (Upcoming).

“The independence of the central bank and the new operating regime of the Federal Reserve.” Jerry L. Co-author with Jordan. Quarterly Review of Economics and Finance (May 2022).

“Federal Reserve’s response to COVID-19 contraction: a preliminary assessment.” Nicholas Kachanowski, Brian Katsinger, Thomas L. Co-author with Hogan and Alexander W. Salter. Southern Economic Journal (March 2021).

“Is Bitcoin Money? And What Does That Mean?” Co-author with Peter K. Hazlett. Quarterly Review of Economics and Finance (August 2020).

“Is Bitcoin a Decentralized Payment Mechanism?” Co-author with Shawn Stein Smith. Journal of Institutional Economics (March 2020).

“Endogenous matching and random cost means with choice.” Thomas L. Co-author with Hogan. BE Journal of Theoretical Economics (June 2019).

“Adaptation and central banking.” Co-author with Alexander W. Salter. Public choice (January 2019).

“Down from the ground: the case of Bitcoin.” Journal of Institutional Economics (2019).

“Ban Bitcoin.” Co-author with Joshua R. Hendrickson. Journal of Economic Behavior and Organization (2017).

“Bitcoin and Bailout.” Co-author with Alexander W. Salter. Quarterly Review of Economics and Finance (2017).

“The Political Economy of Bitcoin.” Co-authors with Joshua R. Hendrickson and Thomas L. Hogan. Economic research (2016).

“Cryptocurrency, network impact and switching costs.” Contemporary economic policy (2016).

“Positively valuable fiat means after the disappearance of the sovereign: the case of Somalia.” Lawrence H. Co-author with White. Behavioral Economics Review (2016).

“The financial system of stateless Somalia.” Public choice (2015).

Books by William J. Luther

10 Friday AM Read – Big picture

My weekend morning The train WFH reads:

A Predicting the next recession: I’m not observing the recession: Recession callers back, and someone like ARK’s Kathy Wood and Home Depot Ken Langon claim the United States is already in recession. I do not agree. We saw negative real GDP growth in Q1, and we could see negative real GDP growth in Q2 – but that doesn’t mean the U.S. economy is in recession. (Calculated risk)

A Inside the secret, often bizarre world that decides what porn you are watching The de facto regulator of the adult industry is not the government, the international conference or the business itself. This is MasterCard and Visa. (Financial times)

A Tesla is killing coal and gas plants with its huge battery projects. Megapacks are utility-scale batteries, which means a power company can use them as a backup to save electricity for hundreds or thousands of customers. Each megapack battery can store three megawatt-hours (MWh) of electricity, which is enough to get about 100 US homes a day. Tesla’s largest battery installation involves a 256-megapack battery unit with a combined storage capacity of 730 MWh, enough to power about 25,000 US homes for a day or about 600,000 homes for an hour. (Quartz)

A Working from a tropical island to do new work from home Business-leisure travelers are a growing breed, and tourist hotspots want their trade. (Bloomberg)

A Meat, exclusive, mega farms: How the US food system fuels the climate crisis From a beef-heavy diet to a growing crop that doesn’t feed people – the biggest challenge facing the agricultural industry. (Parent)

A China has a public relations problem – and it’s not just over Hong Kong. Here’s why three charts. A new study shows that more and more people in developed economies have a negative view of China. (Grid)

A The widespread problem of tree hunting এবং and its far-reaching effects I have seen the scourge of timber smuggling in North America: the Pacific Northwest, the lush forests of Alaska, and the timber stands in the eastern and southern United States. Wood smuggling is everywhere, on different scales, throughout the seasons — one tree here, another there. It has become “a problem in every national forest”. (Literary Center)

A America is in the grip of a right-wing minority We are now at a stage where minorities are taking over. Worse, it is an extremist minority who have exploited the shortcomings of our system of government and imposed a retrograde policy on the rest of the country. (Los Angeles Times)

A ‘Pickleball is the Wild, Wild West’: Inside America’s Fighting the Growing Game There are: many leagues. Many federations. Fighting the millionaires. Bad behavior. And there’s a growing sports growth line. (Sports Illustrated)

A The golden age of old age actors Tom Cruise is no exception in ‘Top Song: Maverick’ – that rule. There is long-standing anecdotal evidence that top-line actors and actresses are getting older. Now, Ringer has the data to back it up. (The Ringer)

Be sure to check out our Masters in Business next week in Perth Toll with the founder and sponsor of the Freedom 100 Emerging Markets ETF, founder of the Life + Liberty Index. The first type of strategy uses the metrics of personal and economic independence as the primary cause of its investment process. Prior to the formation of the Life + Liberty Index, Perth was a personal wealth advisor to Fidelity Investments in Los Angeles and Houston, and lived and worked in Beijing and Hong Kong, where his observations led him to explore the relationship between freedom and the market.

Housing starts, 2021 and 2022

Source: Calculated Risk

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1970 Mercedes-Benz 280 SL Euro 4-speed

The weather has been pleasant recently, suitable for open-top cruising. What could be more beautiful than an evening drive at a pagoda-topped SL?

The Mercedes-Benz (W113) two-seater roadster / coupe was introduced at the 1963 Geneva Motor Show. Production of the 230SL lasted from 1963 to 1971 and the large-engine 280 SL made in 1967-71. MB produced 48,912 W113 SLs, of which 19,440 were destined for the U.S. coast.

Known as the “Pagoda”, the 280SL is an elegant and small 2-door 2-seater. The soft top also comes with a removable hard top. It’s a beautiful 1960s car: simple, well-proportioned, and built like a bank vault.

4-speed manual transmission
7 Fuel-injected, 2,778cc engine Six-cylinder engine
• The M130 engine produces 168 hp @ 5750

Owning a pagoda was more about style and grace than full speed. The car was a sporty GT, not an outright speedster.

When new, the 1970 280 SL, the price was from 6,485− to, 7,909. Adjusted for inflation since 1970, which is equivalent to 22 2022 50,146.55 – 61,157.91.

I bought one of these almost many times, but couldn’t find the right car or the right price. If you want a project, you can find one for 25-45k; -50-75k for clean drivers; The 90-point Concourse version is sold for 6 Figure Plus.

I really like the white exterior with a navy blue interior combo like this beauty below (with a clue canvas soft top and removable white aluminum hard top); It was (yet another reserve met) a bid of $ 62,000 but failed to sell.

Source: Bring A Trailer

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The macroeconomic impact of structural reform

The macroeconomic impact of structural reform: an empirical and model-based approach

Structural reforms include a broad set of policies that can permanently change the direction of the supply of the economy and create an environment where innovation can flourish. These policies increase productivity by increasing incentives to increase production inputs or to ensure that those inputs are used more efficiently, thereby increasing productivity. All measures designed to remove difficult and anti-competitive regulations, increase contract enforcement and protect property rights, and even incentives to increase investment in research and development (R&D) and innovation can help achieve such goals. By increasing productive capacity, reform also increases fixed income, which supports overall demand. While the long-term expansionary effects of reform on both GDP and potential output are not disputed, the use of a model is needed to assess the short-term effects on economic activity, employment, and inflation less clearly and thoroughly.

Existing literature generally provides two distinct approaches to assessing the economic impact of structural reform. The first is based on short-term evidence (such as Baron and Singano 2011, Lanau and Topalova 2016, Chemin 2020), which attempts to identify a causal effect of reforms, but does not allow for the exploration of changes in the new direction of the economy. The second method is based on structurally dynamic general equilibrium models (e.g. Forni et al. 2012, Lusinyan and Muir 2013, Eggertsson et al. 2014, Varga et al. 2014, Cacciatore et al. 2016, Bilbiie et al. 16), which. Allows accurate analysis of the short- and long-term dynamics of the effects of reform. However, the size of the simulated reform is usually based on work assumptions (such as “What if the gap closes the best practices in Vis-a-Vis?”), Without any underlying empirical assumptions. The need to examine the path of macro outcomes from micro behavior to uncover barriers and design effective structural reforms has been emphasized by Bartlesman et al. (2015).

In a recent study (Ciapanna et al. 2020), we try to bridge these two strands of literature and propose to evaluate the macroeconomic effects of structural reform on the basis of a three-step approach. First, we determine the amount of reform through an appropriate indicator. Second, we estimate the reduction-form effect of reform on markup (a measure of a firm’s market potential) and total factor productivity (TFP, a measure of production efficiency). Third, we use such approximate effects as external shocks in a structural model to simulate each reform accounting for transitional dynamics towards new static conditions.

Impact of structural reforms

We consider three reform packages: liberalization of regulated services, incentives for innovation, and civil justice reform. Liberalization system was introduced through decree lawSave Italy‘(L. 22 December 2011, n. 214) and with decree law’Grow Italy ‘ (L.24 January 2012, n. 1), through various interventions that have affected various sectors (such as energy, transportation, retail and professional services), and with the aim of removing barriers to entry into competitive markets and other restrictions. Financial incentives for investment in innovation were included in the ‘Industry 4.0’ plan, launched in 2016 and subsequently renewed, which included multiple measures aimed at encouraging investment in various initiatives (over-approval, the so-called ‘new sabatini’ ‘). And to encourage the adoption of so-called ‘Industry 4.0’ technology (hyper-amortization) and R&D expenditure (tax credit on R&D). Finally, the Civil Justice Reform Package, launched in 2011, aims to address the huge backlog of cases in the Italian justice system and the excessive length of trials. The measures taken, of various natures and importance, were designed to reduce the number of legal disputes and improve court productivity.

Estimates of microeconomics, utilizing sectoral, geographical, and firm-level sources of diversity, indicate that structural reforms can increase TFP by reducing the market strength of firms (Table 1). Liberalization of services has had a positive impact on both the TFP (+ 3.5%) and the level of competition in the services sector, where the markup in the services sector has declined by about 1.1 percentage points. Innovation stimulus led to an increase in productivity of about 1.4%. Finally, the reform of the civil justice system resulted in a 0.5% increase in TFP.

Table 1 Short guess

To assess the macroeconomic impact of the three reforms, we simulate a dynamic general equilibrium model of a multi-country bi-sector calibrated in Italy. The model consists of two sectors – manufacturing and services – which combine capital and labor with an external TFP to generate output. Reforms aimed at increasing the level of competition in a sector are modeled as affecting the relevant markup.

We consider each of the three reforms as a separate outward shock. Following the proposed three-step method, the model is given (i) the approximate effect of the reform on the synthetic index considered (markup, TFP); And (ii) the period of implementation of the reforms (see Table 1, last two columns). Model-based simulations provide the final step of evaluation.

Figure 1 reports the effects of reforms on major macroeconomic variables over a period of 20 years All reforms support GDP and have a mild inflationary impact in the short term, reflecting the supply-side expansion initiated by TFP growth and declining market power in the services sector. The only effect of the considered reforms will be to increase the level of GDP in the first decade by about 3%. At present, the second decade will see a further increase of about 3 percentage points. Considering the uncertainty surrounding our micro-econometric estimates, long-term growth in GDP (which will match potential output) will be between 3.5% and 8%. On the same horizon, total employment (expressed here in terms of working hours) will increase by about 0.5%, while the unemployment rate will decrease by about 0.4 percentage points.

Figure 1 The macroeconomic impact of reform

Note:: Horizontal axis: year. Vertical axis: Percent deviation from baseline; For inflation, the annual percentage point deviation from the baseline; For unemployment, the percentage point deviation from the baseline. GDP is assessed at a fixed price.


Structural reform plays a key role in increasing competition and productivity and therefore stimulating long-term economic growth, with non-trivial short-term effects. Our results are consistent with the results obtained in the study by looking at similar reforms using different methods and approaches (e.g. OECD 2015, MEF 2016). Our analysis considers only a select subset of the structural reforms implemented in Italy over the past decade and it deliberately excludes all other factors (i.e. external shocks) that simultaneously hit the Italian economy at the same time. Indeed, policy timing and sequence, revenue consolidation, and external constraints can affect the outcome of structural reform programs (Manase and Katsikas 2018). Our results also suggest that in the absence of reform, the dynamics of Italian TFP, GDP and potential output would have been further weakened.


Barone, G and F Cingano (2011), “Boosting Growth in High-Debt Times: The Role of Service Deregulation”,, 6 December.

Bartelsman, E, F di Mauro and E Dorrucci (2015), “Eurozone Rebalancing: Are We on the Right Path to Growth? Insights from CompNet Micro-Based Data “,, 17 March.

Bilbiie, F, F Ghironi and M Melitz (2016), “Access Skills, Exclusive, and Unrestricted Market”,, 13 September.

Cacciatore, M and G Fiori (2016), “The macroeconomic impact of commodity and labor market deregulation”, Review of economic dynamics 20: 1-24.

Chemin, M. (2020), “Judicial Skills and Strong Productivity: Evidence from the World Database of Judicial Reform”, Economics and Statistics Review 102: 49-64.

Ciapanna, E, S Mocetti and A Notarpietro (2020), | The Effects of Structural Reforms: Evidence from Italy “, Temi di Discussione (Working Papers) 1303, Bank of Italy.

Eggertsson, G, A Ferrero and A Raffo (2014), “Can Structural Reform Help Europe?”, Journal of Monetary Economics 61: 2-22.

Forni, L, A Gerali and M Pisani (2012), “Competition in the service sector and macroeconomic performance in European countries: in the case of Italy”,, 3 April.

Lanau, S and P Topalova (2016), “The Impact of Product Market Reform on Strong Productivity in Italy”, IMF Working Papers 119.

Lucinian, L. and De Muir (2013), “Assessing the Macroeconomic Impact of Structural Reform: The Case of Italy”, IMF Working Papers 22.

Manasse, P and D Katsikas (2018), “Economic Crisis and Structural Reform in Southern Europe: Policy Lessons”,, 1 February.

MEF – Ministry of Economy and Finance (2016), “Assessing the Macroeconomic Impact of Italian Reform with a Focus on Credibility”, Quest Workshop, Italian Ministry of Economy and Finance.

OECD (2015), Structural Reform in Italy: Impact on Growth and Employment.

Varga, J., W. Roger, and J. T. Weld (2014), “The Impact of Increased Structural Reform in Southern Europe: Incidents in Greece, Italy, Spain, and Portugal”, Experimental 41: 323-363.