Category: Politics

When you hear people talk about the Global Savings Glut, you can be quite sure they are talking about monetary “savings” — the global aggregate stock of money embodied in financial assets. What they don’t seem to realize is that the net holdings of global financial assets minus liabilities — claims and counterclaims — is…

Okay well he doesn’t say it quite so succinctly. Or categorically. In fact he hedges his statement several ways from Sunday, and uses a hundred-and-twenty-three-word paragraph to do so: The near-consensus view over here at Equitable Growth and at the Equitablog is that U.S. economic growth over the past generation has been very disappointing. Too-much of our economic growth…

Here, emphasis mine: It must affect your thinking somehow that they really believe in markets. I think that maybe he has a cognitive dissonance. His research shows that markets are not efficient. So what do you do if you are living in the University of Chicago? It’s like being a Catholic priest and then discovering…

Sadly, not in the real world. But in the econoblogosphere. Much of that is arguably thanks to the newly launched Washington Center for Equitable Growth. Traveling and family time, so I can’t do a big writeup, so just a few somewhat randomly chosen links: Brad Plumer: Is inequality bad for economic growth? Jared Bernstein: The…

This quote is right up there with the great Will Rogers line: “I don’t belong to an organized political party. I’m a Democrat.” Matthew Yglesias opens his recent post with it. I don’t know if he coined it, but if so, A Huge Kudos. It’s utterly and painfully true. A deservedly iconic statement. Here’s what…

I’m rather terrified to find that Brad DeLong has replied to my recent post on this subject. I would expect greater inequality coupled with a higher propensity to save on the part of the rich to drive all asset yields down. Yet what we have seen has been a steep, prolonged fall in Treasury bond yields…

Update: Brad DeLong has replied, and I have replied to him. Dean Baker quite rightly takes Robert Samuelson to task for his op-ed on the causes of secular stagnation. Samuelson: The problem might not be a dearth of investments so much as a surplus of risk aversion. For that, candidates abound: the traumatic impact of the…

Mike Sankowski has been banging his spoon on the high chair about this forever. And rightly so. Repeat after Mike. And keep repeating it to anyone who will listen. The “higher-corporate-profits = jobs” meme is perhaps the most pernicious falsehood in political economics. How Business Owners Think For almost ten years I was co-founder and…

Simple explanations are always suspect. So do with this what you will. It’s my basic framework for thinking about how economies work. It of course doesn’t explain everything; the headline here is tongue-in-cheek. But I find it very useful in thinking about everything else. This thinking clashes quite definitively with traditional economic teachings. But it…

Lane Kenworthy has done some of the best work on this subject. Read all his stuff. One great piece, on determinants of growth: Institutions, wealth, and inequality Only one institutional factor is strongly supported as a determinant of growth in prosperous countries, according to Lane’s really excellent statistical work: “corporatist concertation.” Corporatist concertation is not…

Larry Summers’ recent speech (and Paul Krugman’s paean to it) have brought the issue of secular, decades-long stagnation to the front of the econoblogosphere agenda. Tyler Cowen, of course, made it prominent some time ago. But he posited a tech cause: we’ve picked the low-hanging innovation fruit. Summers, Krugman, et. al. suggest that policies and…

Tim Kane was nice enough to include my question in this year’s Hudson Survey of Leading Economics Bloggers (PDF). Here’s the question and the results: Judging based on post-war economic data, how do prosperous, high-GDP/capita countries compare with one another? Countries with larger government sectors have _____ growth rates compared to countries with smaller government sectors. As a group,…

There’s great discussion out there on this topic, see Steve Randy Waldman’s links list here. Karl Smith gives us this graph and asks: I mean, honestly, would you look at the graph above and conclude that during the 1970s the economy dangerously overheated. I’d like to offer a perhaps more useful (though more complicated) look.…

Steve Randy Waldman delivers another Aha! post (and a followup reply to Scott Sumner) pointing out a huge driver of the 1970s Great Inflation — the rise in the labor force: Between the mid 60s and the mid 70s, the labor force grew by 30%.*  Steve, emphasis mine: The root cause of the high-misery-index 1970s was…

I just got an email from LIS (the group that runs the Luxembourg Income Study and Luxembourg Wealth Study) giving notice of a new book: Income Inequality: Economic Disparities and the Middle Class in Affluent Countries Contrary to the title, there’s a whole section on wealth inequality. The book’s 17 chapters by 17 established researchers/research…

It’s really hard to kill this meme. Note the label on this graph from today’s Free Exchange post: Now change that heading to read “Business borrowing.” Sort of gives a different impression, right? The idea that the problem’s on the supply side is pervasive, and false or at least wildly overblown. Lending rates are at…

In his Defending the One Percent paper, Greg Mankiw is rather grudgingly acknowledging rent-seeking (and -getting) in the financial industry, and the allocation of top talent to that industry. He sez: The last thing we need is for the next Steve Jobs to forgo Silicon Valley in order to join the high-frequency traders on Wall Street.…

Political Calculations gives us this chart of median new home prices versus median incomes over the last 46 years. The rising tip at the upper right (!) is May 2013. What do you think: sustainable? Here’s the zoomed-in version of recent years, from inside the red dashes: As they say, …new homes are, virtually by definition, at the…