Weekend reading: Congress must pass additional coronavirus aid now edition

This is a post we publish each Friday with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth published this week and the second is relevant and interesting articles we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context. Equitable Growth round-up With more than...

Recent podcasts related to economic history

Historically Thinking Al Zambone talks to Sharon an Murphy about her book Other People’s Money: How Banking Worked in the Early American Republic   The Economic History Podcast is relatively new but has several episodes up now including one with Lisa Cook talking about racial violence, innovations. The Planet Money episode with Dr. Cook is also very good.   Coffee with Cornelius, podcast with Cornelius Christian, has several episodes with...

Are Regulations “Job Killing”?

The traditional models of regulations and growth treat regulation as an adverse productivity shock (more inputs for the same output) in order to help the environment, fairness, or some other social good.  But a productivity shock has opposing income and substitution effects on labor supply.  Arguably a regulation that works as a productivity shock has no aggregate effect on jobs.Reminded how Gary Becker many times told me that "somebody...

Economics’ race (and other) problems

There’s been much discussion in recent days about Economics’ race problem. Some of what has come out is quite disturbing. I have not said much, but I have listened and thought. Here are a few reflections I want to add. It doesn’t surprise me that the field, as a whole, reflects the ingrained attitudes and practices of the society of which it is part. But there are some features of the discipline that magnify and aggravate the problem. First,...

ND labor markets still in flux

We are not out of the woods yet in North Dakota when it comes to labor market adjustments. Businesses and entire industries are still making changes to circumstances and situations so it should not be a surprise that it is happening with labor as well. This is a complicated dynamic with feedback between businesses and their customers that will present some problems. What is happening in the state is pretty apparent. The fact is that...

Guest Contribution: “The impact of the pandemic on developing countries”

Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers.  A shorter version appeared in Project Syndicate. The covid-19 pandemic has had differentiated impacts across countries. This is true even among the set of Emerging Market and Developing Economies (EMDEs), which share the disadvantages of more poverty,...

Why the Fed Should Create a Standing Repo Facility

I was invited recently to take part on a panel discussion on Modernizing Liquidity Provision as part of a conference hosted jointly by CATO and the Mercatus Center entitled A Fed for Next Time: Ideas for a Crisis-Ready Central Bank.  My post today is basically a transcript of the presentation I gave in my session. I'd like to thank George Selgin and David Beckworth for inviting me to speak on why the Fed should create a standing repo facility,...

More Thoughts on a Better Income Support System for the Next Crisis

This post was written by Mike Veall of the Department of Economics at McMaster University. I appreciated the comments on my earlier post, where I suggested that a small monthly Basic Income system would have the advantage of being able to be scaled-up in a crisis. Incenting participation in the tax/transfer system is responsive to the work of Anna Cameron, Lindsay Tedds, Jennifer Robson and Saul Schwartz pointed out by Frances even though...

Will the mental scars of Covid fade or endure?

Will the mental scars of Covid fade or endure? My local cheesemonger, having reinvented itself as a general produce store, has been open throughout lockdown. The proprietor tells me something strange and new has started to happen. Customers he hasn’t seen since March as they diligently shielded themselves from human contact, have finally re-emerged, blinking in the daylight. What’s more, he says, they have no concept of physical...

The Pandemic Effect on World Trade: Some Early Data

The World Trade Statistical Review 2020 from the World Trade Organization is an annual report which is mainly focused on detailed data for trade patterns from the previous year. I find that it requires some mental effort to remember what the world economy looked like in 2019, but of course, trade tensions were already high. The value of global merchandise trade fell 3% in 2019--the first time it had fallen since the Great Recession years back...

The Democratic Party’s hard right views on marijuana

OK, maybe they are a bit less bad than the GOP, but this is truly inexcusable in the era of Black Lives Matter: It’s 2020 and the leadership of the Democratic Party still cannot get it together on marijuana legalization, which two-thirds of Americans support. . . . Marijuana Moment reports that on Monday the Democratic National Committee rejected an amendment to put a plank supporting marijuana legalization into the party’s platform. The...

Monday assorted links

1. “Sociable weavers work together to construct large nests in southern Africa, often in acacia trees. The nests can weigh as much as 1 ton and house up to 200 birds in individual chambers. Their cooperative behaviors also include chick rearing and defense against snakes and falcons.”  Link here. 2. Why so much regional inequality in Britain (The Economist). 3. Both of these supposed Gauguins look like fakes to me. 4. Shruti on Indian...

The reality behind fiscal scare stories, or mediamacro is alive and well

If you listen to the broadcast media, you will have almost certainly picked up the message that at some point in the near future the Chancellor is going to have to raise taxes or cut spending to ‘pay for’ all the support to the economy during the pandemic. At least the Financial Times has learnt the lesson of 2010, and notesin this editorial that the Chancellor“must hold the line and resist attempts to push the UK into a premature fiscal...

Life-cycle benefits of early childhood programs: evidence from an influential early childhood program

Summary There is a substantial body of evidence showing that early childhood programs can boost the skills of disadvantaged children. Most of this research has evaluated the short-run ‘treatment effects’ of these programs, focusing on outcomes such as cognitive test scores, school readiness, and measures of social behavior. So far, few studies have analyzed longer-term effects such as...

Monetary Finance in the Age of Corona Virus: MMT and the Green New Deal

The world is going through a remarkable transformation in the aftermath of an unprecedented shut down of economies all over the globe. Before the crisis there was already significant debate about how to pay for the costs associated with the transition to a low carbon environment. That debate has intensified as treasuries and central banks ...

Nature by the Numbers

Natural systems like the massive Sundarbans mangrove forest in India and Bangladesh are not just home to millions of plant and animal species that deserve protection from human encroachment. They are also crucial sources of economic output and resilience, demanding far more protection than they currently receive. NORWICH – When Cyclone Amphan came barreling up the Bay of Bengal this past May,...

The Nightmare on Pennsylvania Avenue

Every worker’s nightmare is the horrible boss — everyone knows at least one — who is utterly incompetent yet refuses to step aside. Such bosses have the reverse Midas touch — everything they handle turns to crud — but they’ll pull out every stop, violate every norm, to stay in that corner office. And they damage, sometimes destroy, the institutions they’re supposed to lead.Donald Trump is, of course, one of those bosses. Unfortunately, he’s...

Rabbit = Good Friend (or, how to take care of rabbits)

Rabbits make great friends. Unfortunately, rabbits are not as popular of a pet as they ought to be, thanks to two big misconceptions. Let's start out by busting these myths. Myth #1: Rabbits can't be litter trained. In fact, most rabbits are really easy to litter-train. Just put the litter box next to the hay feeder, and they will train themselves. Here's my setup: There are a few exceptions, just like with cats, but in general this...

Fix the darned pipes

Wellington loses somewhere between 7 and 32 percent of its water because of leaks in the pipes. Nobody knows how much is lost because water isn't properly metered. Wellington has more than three times as many old cruddy pipes as the next worst council, Christchurch. Getting a new source to meet both new demand and the leaks will cost $250 million. Additional sources are likely worth having anyway for resilience against quakes, so long as they...

Life-cycle benefits of early childhood programs: evidence from an influential early childhood program

Summary There is a substantial body of evidence showing that early childhood programs can boost the skills of disadvantaged children. Most of this research has evaluated the short-run ‘treatment effects’ of these programs, focusing on outcomes such as cognitive test scores, school readiness, and measures of social behavior. So far, few studies have analyzed longer-term effects such as...

The Artery-Aging Properties of TMAO and the TMAO-Producing Effect of Animal Protein Consumption

In injecting TMAO ( trimethylamine-N-Oxide) into mice makes their arteries look like those of older mice. Blocking TMAO makes the arteries of mice look like those of younger mice:… treatment with 3,3-dimethyl-1-butanol for 8 to 10 weeks to suppress trimethylamine-N-oxide selectively improved endothelium-dependent dilation in old mice to young levels …The quotation is taken from the abstract of the Hypertension article “Trimethylamine-N-Oxide...

The COVID19 pandemic is a threat to social mobility, as children in disadvantaged families will face more challenges in adulthood

The COVID19 pandemic will threaten social mobility. I examine four ways in which this is likely to happen in my presentation to the ZEW Seminar on COVID19 and inequality held on June 19th, 2020. This post summarizes the major messages. Drawing on past research I see four aspects of inequality in the lower part of the income distribution that will be exacerbated and threaten the upward mobility of children raised in challenging circumstances....

32+ Years…

Low-Powered Incentives Kill Sales

Jim Halpert from "The Office" discovers that he has met his annual commission cap. Any additional sales yield zero commissions. Gabe from corporate tries to rationalize the new policy.[embedded content]

Make-Up Policy: Where Art Thou?

As we head into the second half of the year, the swift recovery many were hoping for is facing an uncertain future. The resurgence of the COVID-19 virus and concerns about dwindling fiscal support have many worried. I submit that even in the absence of these worries, the recovery would still be on shaky grounds without the Fed explicitly committing to 'make-up' policy. Make-up policy is an explicit framework that allows the Fed to correct for...

Keep Those Remittance Flows Going

The importance of remittance flows to low and middle income countries is the subject of an important recent tweet from William Easterly @bill_easterly. His tweet includes this amazing chart: What is most striking about the chart is the sharp increase in remittance flows around 2002 and 2003. But why? This was the time that there was a huge new emphasis on the potential importance of these flows.  It was also a time when a special policy...

Goodfellows and Garicano Interview

I did two videos last week that blog readers may enjoy.I did an interview with Luis Garicano in his "capitalism after coronavirus" series We covered many topics, but the aftermath of the huge government debt now being racked up is possibly the most interesting, at least to me.Luis is currently a member of the European Parliament. ...

The Lockdown Debate

The Lockdown Debate July 16, 2020 in covid-19, economics, Mechanism design | Tags: lockdown The efficacy of lockdowns was debated at the start of the pandemic and continues to this day. Sweden, famously, chose not to implement a lockdown. As Anders Tegnell, remarked:`Closedown, lockdown, closing borders — nothing has a historical scientific basis, in my view.’ Lyman Stone of the American Enterprise Institute expresses it more...

Defining recessions when negative growth is too common or too rare

TweetJune 20, 2020 — This post follows up on “What Determines When a Recession is Recession?” which pointed out some drawbacks of defining a recession by two negative quarters of growth. In some countries there is another, more fundamental, basis for questioning the two-quarter rule for determining recession, or any GDP-based rule. Some countries experience sharp slowdowns or periods of diminished economic activity and yet their long-term...

European Resurgence

Posted on 02 August 2020 by John Mauldin, Thoughts from the Frontline One of COVID-19’s many less-than-obvious consequences is the way it makes us look inward. Facing mortality has always done that, of course. West Texas Judge Roy Bean reportedly said, “Nothing focuses the mind like a good hanging." For the vulnerable and those of us of a certain age (ahem), this virus goes beyond the normal daily risks.Please share this article - Go to...

Someone should have a word with the government’s graphics team

When you’ve got a global pandemic on your hands, it’s important, as a government, that you put out clear messaging. In fact, getting the messaging right could literally be a matter of life and death. As Health Secretary Matt Hancock put it back in May:How we communicate as a government, as ministers, has a direct impact on the amount of cases that we have and therefore the amount of people who die.With those grave words ringing in your head,...

Protracted G7 contraction – or multiyear global depression

Global growth prospects are deteriorating. Instead of a V-shaped recovery in the 2 quarter, advanced economies will face historical carnage and a prolonged contraction. But there’s still worse ahead.The Trump administration’s catastrophic COVID-19 failures, along with premature exits to reopen the economy and leave the WHO will virtually ensure still new virus waves and longer contraction. In turn, US tariff wars are undermining the promise of...

The Worst Jobs Day Ever

Driven by the COVID-19 shutdown, April marked the greatest job loss in American history. The unemployment rate skyrocketed to 14.7 percent, and employers cut 20.5 million jobs. Those figures are heart-wrenching. But as awful as they are, they do not fully capture workers’ hardships. To be counted as unemployed, people must be available for work and actively seeking it. With schools closed, job opportunities withering, and social distancing the...

Can Fed policy work just by being announced and not necessarily being used?

Why Growth in the Fed’s Asset Portfolio Has Paused: That doesn’t mean the central bank has dialed back its support for markets or the economy by Nick Timiraos of The WSJ. Private invetors might not want to buy certain assets like, for instance, corporate bonds. They may be pessimistic. Yet if the Fed announces a willingness to buy them, then investors have more confidence that these assets will retain their value even if the Fed does itself...

On Shareholders and Stakeholders

Click here to read my column in Sunday's New York Times.

The new tools of monetary policy

By Haowen Chen Since the 1980s, interest rates around the world have trended downward, reflecting lower inflation, demographic and technological forces that have increased desired global saving relative to desired investment, and other factors. Although low inflation and interest rates have many benefits, the new environment poses challenges for central banks, who have traditionally relied on cuts to short-term interest rates to stimulate...

Central Banking Stories to Watch in 2019

Happy New Year, everybody! 2018 has been a quiet year for my blog, but productive on other fronts, as I've kept busy with research and my family. But here are a few central bank-related stories I'm interested in following in the new year. 1. New Governor at Reserve Bank of IndiaFollowing the early exit of Governor Urjit Patel in December, Prime Minister Modi appointed the third central bank governor in just three years: Shaktikanta Das....

Podcast: Goodbye, Benito

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The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

In Memory of Bob Rossana

Robert “Bob” Rossana died back in February of this year. I was inadvertently left off of the university announcement email and did not hear about it until much later. Bob was my dissertation advisor. He meant a lot to me and so I want to share some thoughts. In graduate school, there were four macroeconomics courses. Two core classes and two field classes. Bob was instrumental in getting this four-course system started, as well as a “macro...

Who were the top taxpayers in 1923?

From page 71 of Daniel Marcin’s “The Revenue Act of 1924: Publicity, Tax Cuts, Response” div{float:left;margin-right:10px;} div.wpmrec2x div.u > div:nth-child(3n){margin-right:0px;} ]]> Advertisements

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...

The media cannot reform itself until it acknowledges its power

As regular readers know, I have for the last few years been banging on about the importance of the media in influencing public opinion. (It formed a key part of my SPERI/News Statesman prize lecture.) It is not a partisan point about whether the media is politically biased in a particular direction. Instead it is a claim that the media can and sometimes is profoundly important in influencing major political events. I think it is fair to say...