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June 7, 2014

Latest Posts from Economist's View

Latest Posts from Economist's View

'What Does Piketty’s Capital Mean for Developing Countries?'

Posted: 07 Jun 2014 01:11 AM PDT

Gabriel Demombynes:

What Does Piketty's Capital Mean for Developing Countries?, by Gabriel Demombynes: The economics book that has launched a thousand blog posts, Thomas Piketty's Capital in the Twenty-First Country, tells a grand story of inequality past and present. One would expect that a book on global inequality would have much to say about development. However, the book has limited relevance for the developing world, and the empirical data he marshals for developing countries is weak. ...[continue]...

Links for 6-07-14

Posted: 07 Jun 2014 12:06 AM PDT

The Myth of Wage-Led Inflation

Posted: 06 Jun 2014 05:13 AM PDT

Josh Bivins at the WSJ:

... Much recent discussion about potential price inflation seems to take as a given that it would be sparked by a pickup of wage growth. But looking at data from the non-financial corporate sector–which accounts for well more than half of all private-sector economic activity and for which rich data are available–what's really striking about price growth since the end of the Great Recession is how much of it has been driven by rising profits, not rising labor costs. In fact, labor costs have been essentially flat between the end of the Great Recession and the first quarter of 2014. Profits earned per unit sold, on the other hand, have been rising at an average annual growth rate of nearly 9% since the recovery's beginning. To the degree that there is any inflationary pressure in the U.S. economy over that time, it is surely not coming from labor costs. ...

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