- The Path to a More Secure Economic Future
- "Should The U.S. Take A Harder Stance On China's Currency?"
- "Changing Inequality in U.S. College Entry and Completion"
- Links for 2012-01-31
- FRBSF: Why Is Unemployment Duration So Long?
- DeLong: Neville Chamberlain was Right
- Someone Needs to Work on His Communications Strategy
Posted: 31 Jan 2012 01:11 AM PST
A new column is live:
It's a response to president Obama's plan to increase economic growth and job opportunities through a revival of manufacturing in the U.S.
Posted: 31 Jan 2012 12:42 AM PST
Joe Gagnon says the "best way to discourage currency manipulation is to tax it heavily":
Should The U.S. Take A Harder Stance On China's Currency?, by Joe Gagnon, Planet Money: ...Ben Bernanke recently said that Chinese currency manipulation "is blocking what might be a more normal recovery process." In fact, the problem goes beyond China to include many other emerging economies and even a few advanced economies. ... The evidence suggests that currency manipulators jointly have increased their trade balances by about $1 trillion relative to where they would have been in the absence of manipulation. Europe and the United States have suffered the corresponding decline in trade balances. ...
Based on estimates of the International Monetary Fund, the $1 trillion boost to European and US net exports from the ending of currency manipulation would return these economies to nearly full employment.
The best way to discourage currency manipulation is to tax it heavily. The taxes should apply to all purchases of European and US assets, including bank deposits, by governments that engage in currency manipulation. Unlike trade sanctions, such taxation is allowed under international law, and it also does not cause the economic distortions that trade sanctions cause. As I outlined recently with my colleague Gary Hufbauer, anti-money-laundering procedures now in place can prevent currency manipulators from hiding their investments through third parties.
One consequence of a reduction in currency manipulation would be a sharp drop in the values of the dollar and the euro in terms of the currencies of the manipulators. It is this exchange rate adjustment that would boost US and European exports, thereby generating jobs. ...
Posted: 31 Jan 2012 12:34 AM PST
From the NBER:
Gains and Gaps: Changing Inequality in U.S. College Entry and Completion, by Martha J. Bailey, Susan M. Dynarski, NBER Working Paper No. 17633, December 2011: [open link] We describe changes over time in inequality in postsecondary education using nearly seventy years of data... We find growing gaps between children from high- and low-income families in college entry, persistence, and graduation. Rates of college completion increased by only four percentage points for low-income cohorts born around 1980 relative to cohorts born in the early 1960s, but by 18 percentage points for corresponding cohorts who grew up in high-income families. Among men, inequality in educational attainment has increased slightly since the early 1980s. But among women, inequality in educational attainment has risen sharply, driven by increases in the education of the daughters of high-income parents. Sex differences in educational attainment, which were small or nonexistent thirty years ago, are now substantial, with women outpacing men in every demographic group. The female advantage in educational attainment is largest in the top quartile of the income distribution. These sex differences present a formidable challenge to standard explanations for rising inequality in educational attainment.
There's a more extended summary of the results in the conclusion to the paper.
Posted: 31 Jan 2012 12:06 AM PST
Posted: 30 Jan 2012 01:01 PM PST
What's responsible for the slow recovery of employment in recent recessions? :
The analyses discussed here suggest that weak labor demand is the primary explanation for prolonged unemployment duration observed in the recent recession and recovery. The weak recovery of employment is similar to the jobless recoveries that followed the 1990–91 and 2001 recessions. This suggests that the labor market has changed in ways that prevent the cyclical bounceback in the labor market that followed past recessions. The shift towards jobless recoveries probably reflects a reduction in temporary layoffs during cyclical downturns. Stricter market incentives to control costs in the face of stiff domestic and international competition may also be factors. In addition, anecdotal evidence suggests that recent employer reluctance to hire reflects an unusual degree of uncertainty about future growth in product demand and labor costs. These special factors are not readily addressed through conventional monetary or fiscal policies. But such policies may be able to offset the central obstacle of weak aggregate demand.
Posted: 30 Jan 2012 10:09 AM PST
Neville Chamberlain was Right, by J. Bradford DeLong, Commentary, Project Syndicate: Neville Chamberlain is remembered today as the British prime minister who, as an avatar of appeasement of Nazi Germany in the late 1930's, helped to usher Europe into World War II. But, earlier in that fateful decade, relatively soon after the start of the Great Depression, the British economy was rapidly returning to its previous level of output, thanks to Chancellor of the Exchequer Neville Chamberlain's reliance on fiscal stimulus to restore the price level to its pre-depression trajectory.
Compare that approach to the expansion-through-austerity policy being pursued nowadays by British Prime Minister David Cameron's government (with Chancellor of the Exchequer George Osborne leading the cheering squad). The country's real GDP has flat-lined, and the odds are high that British real GDP is headed down again.
Indeed, in less than a year, if current forecasts are correct, Britain's Cameron-Osborne Depression will not merely be the worst depression in Britain since the Great Depression, but probably the worst depression in Britain…ever. ...[continue reading]...
Posted: 30 Jan 2012 09:20 AM PST
It's weird to get email from Stephen Williamson calling me names. Not much else, just name calling.
How childish is this guy?
|You are subscribed to email updates from Economist's View |
To stop receiving these emails, you may unsubscribe now.
|Email delivery powered by Google|
|Google Inc., 20 West Kinzie, Chicago IL USA 60610|