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February 4, 2013

Latest Posts from Economist's View

Latest Posts from Economist's View

Posted: 29 Jan 2013 01:11 AM PST
I couldn't resist one more plea for infrastructure construction:
How Spending on Infrastructure Can Reduce Our Long-Run Debt Burden
Spending more on infrastructure will improve our growth prospects, lower long-term unemployment, and some types of spending can actually save us money in the long-run.
Posted: 29 Jan 2013 12:06 AM PST
Posted: 28 Jan 2013 12:18 PM PST
Nancy Folbre:
The Uneven Progress of Equal Opportunity: ... Five years into the 21st century, the data reveal a surprisingly high level of job segregation in which African-American men, white women and especially African-American women only rarely worked in the same occupation in the same workplace as white men. In order to create a completely integrated private-sector workplace, more than half of all private sector workers would need to change jobs.
In most workplaces, the face of authority looks predictable. As the authors put it, "White men are often in positions in management over everyone; white women tend to supervise other women, black men to supervise black men and black women tend to supervise black women." ...
In this world, remarkable successes like the election of an African-American president coexist with continuing failures, especially in domains where disadvantages based on race, gender and class coincide and collide. ...
Posted: 28 Jan 2013 10:44 AM PST
The Future of the American Public Sector
Posted: 28 Jan 2013 10:43 AM PST
I need to read this:
The Supply and Demand for Safe Assets, by Gary Gorton and Guillermo Ordonez, January 2013, NBER [open link]: Abstract There is a demand for safe assets, either government bonds or private substitutes, for use as collateral. Government bonds are safe assets, given the governments' power to tax, but their supply is driven by fiscal considerations, and does not necessarily meet the private demand for safe assets. Unlike the government, the private sector cannot produce riskless collateral. When the private sector reaches its limit (the quality of private collateral), government bonds are net wealth, up to the governments own limits (taxation capacity). The economy is fragile to the extent that privately-produced safe assets are relied upon. In a crisis, government bonds can replace private assets that do not sustain borrowing anymore, raising welfare.
Posted: 28 Jan 2013 10:13 AM PST
John Taylor argues, indirectly, that the unemployment problem is mostly cyclical, not structural:
... I like to tell the story about what Senator Hubert Humphrey said when President Ford's Council of Economic Advisers, where I worked with Alan Greenspan, reported to the Joint Economic Committee (JEC) that it was raising the definition of the normal unemployment rate from 4.0% to 4.9%.  Humphrey, who chaired the JEC, was outraged and told us in the JEC hearing that "if the country was suffering a plague and you economists were doctors your solution would be to raise the definition of normal body temperature above 98.6 degrees"   
So I am worried when people stop talking about today's very high unemployment rates as if they were normal. ...
He goes on to try to blame Obama for the slow recovery of labor markets ("It is not a good sign that the inaugural address was silent on the subject..."), as though the Republicans -- his party -- and its obstructionist ways has nothing to do with the fact that Obama couldn't get his jobs program passed, or any further stimulus measures put in place. But it's nice to see Taylor acknowledge that the problem is cyclical not structural, and that fiscal policy can make a difference (Obama can hardly be blamed for the Fed's actions, so when he complains that Obama isn't talking about this problem, he must have fiscal policy in mind -- probably tax cuts for the wealthy rather than, say, spending on infrastructure, but it's a start.)

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