In Conversation with Adia Harvey Wingfield

Policies to improve racial and gender inequality and U.S. labor market outcomes Bahn: So, my next question is sort of where are the solutions, then? Are there policies that the federal and state and local governments could take to improve working conditions for African Americans in different occupations, in different service industries? Are there broad employer-based policies that could be promoted? Wingfield: Sure. I think...

Bankrupt in America

We received our copies of Bankrupt in America: A History of Debtors, Their Creditors, and the Law in the Twentieth Century    also available at Amazon I previously posted an overview of the book but here is a description of each of the chapters. Chapter 1 Introduction The introduction acquaints the reader with what is already known about bankruptcy in the twentieth century, describes the methods used in the book, and previews the...

Look at all of those CEA charts!

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Announcing the US-China Trade Policy Working Group

Concerned about where the US-China trade relationship is going, we recently formed a “US-China Trade Policy Working Group.” Yang Yao, Jeff Lehman and I are co-conveners. Other members are Meredith Crowley, Robert Howse, Jiandong Ju, Feng Lu, Justin Yifu Lin, Eric Maskin, and Rob Staiger. We released our statement today. The statement is signed by 27 additional economists and legal scholars, including Philippe Aghion, Kaushik Basu, Robert...

Radio Show today

David Economist and economic historian with an interest in population analysis and demographic methods. Especially interested in natural disasters and disruptions to economic activity and changes in population dynamics, as well as fiscal and monetary policy with forecasting implications. Husband, father, Cubs fan. View all posts by David

Recession Probability for Term Spread thru 2/24

If the last few days of February is like the rest, then recession probabilities are up. Using a plain-vanilla probit model of recession based on the10yr-3mo spread, the following recession probabilities are obtained. Figure 1: 10 year-3 month Treasury spread (blue, left scale), recession probability from probit model (red, right scale), NBER recession dates shaded gray. Feb2020 observation for data through 2/24. Source: Federal Reserve via...

Kalecki on the Political Aspects of Full Employment

Michal Kalecki 1899 - 1970Sam Levey reminded me of Kalecki's 1943 article on the political aspects of full employment. This a very interesting and thought-provoking paper. I enjoyed it enough to offer my critique of it.The paper starts by taking as given what Kalecki calls the doctrine of full employment. The basic idea is that the private sector, left to its own devices, is prone to Keynesian aggregate demand failures (see here for...

Choosing the right target: Real options for the Bank of Canada’s mandate renewal

That's the title of a Max Bell School of Public Policy conference to be held in Montreal on April 30/May 1. I'm quite excited about it.  A couple of years ago, I wrote a column scolding the Bank of Canada for the lack of transparency in the mandate renewal process. But after thinking about it some more, I realized that are limits to what the Bank can say in public. The Bank's famed independence has strict bounds. The Governor has operational...

Book of the Week 8: Deep Thinking by Garry Kasparov

Book of the Week 8: Deep Thinking by Garry Kasparov Garry Kasparov’s Deep Thinking (UK) (US) is subtitled “Where Machine Intelligence Ends and Human Creativity Begins”, although on that particular point it is not especially profound. Nevertheless I’ve found it well worth a second read. The book has two particular strengths. First, the account of account of Kasparov’s battles with IBM’s Deep Blue, which reads like a thriller. Kasparov is...

Untangling India’s Distinctive Economic Story

It's easy enough to explain why China's economic development has gotten more attention than that of India. China's growth rate has been faster. China's effect on international trade has created more a shock for the rest of the global economy. In geopolitical terms, China looks more like a rival. Also, China's basic story-line of trying to liberalize a centrally-planned economy while keeping a communist government is fairly easy to tell.But...

Interest rate cuts may not be enough

The Fed should certainly cut their target interest rate. But if the coronavirus problem continues to get worse, that may not be enough to keep monetary policy on tract. A much more effective policy would be to commit to average inflation targeting of 2%/year over the next 5 years. The Fed should indicate that if the coronavirus causes near-term inflation to fall below their 2% target (which is likely), then they’ll go all out to obtain...

Royal sentences to ponder

Meghan and Harry insist Queen Elizabeth doesn’t own the word ‘royal’ Prince Harry and Meghan Markle laid bare their hostility with Buckingham Palace — by insisting that neither Queen Elizabeth nor the UK Government owns the word “royal” internationally. Hours after the Duke and Duchess of Sussex confirmed on Friday they would not go ahead with their planned “Sussex Royal” brand after The Queen put a stop to it, they posted an extraordinary...

Low paid jobs for British born workers

I have always had a problem with those who focus on the need to reduce low skilled immigration. Skilled migrants are OK, so the argument goes, because the UK needs their skills, but we don’t need low skilled immigrants because British workers can do those jobs. At a microeconomic level it makes sense, and in a world where there is widespread unskilled unemployment it may make sense. But in a high employment economy like the UK today, it makes...

Jury verdicts: evidence from eighteenth century London of the dangers of sequential decision-making

Summary When juries in criminal courts determine whether a defendant is guilty or not guilty, are their decisions at all influenced by the verdict and characteristics of the previous trial on which they were sitting? In an ideal world, every case should be assessed solely on its own merits, but a new study suggests that there is a strong element of what economists call ‘path dependency’...

Taxing Billionaires

I just read a fascinating twitter exchange between @Noahpinion and @gabriel_zucman. My scoring so far: Noah: 10: Gabriel: 0 Gabriel argues for taxing billionaires immediately based on the principle of “ability to pay”. Noah asks if his reasoning is based on some unarticulated moral principle; or is it on practical grounds. The State needs the ...

What’s at Stake in Libya?

The battle for Libya is a complicated affair involving not just the warring parties on the ground, but also a host of regional and global powers vying for regional influence and control of energy resources. And, unless it ends soon, it could sow instability in neighboring countries and trigger more waves of refugees fleeing to Europe. PRINCETON – The ongoing war in Libya is a microcosm of the tragedy...

Warren, Bloomberg and What Really Matters

Wednesday’s Democratic debate was far more informative than previous debates. What we learned, in particular, was that as a presidential candidate, Michael Bloomberg is a great businessman — and that Elizabeth Warren remains a force to be reckoned with.Both lessons ran very much counter to the narrative that the news media has been telling in recent weeks. On one side, there has been a palpable eagerness on the part of some news organizations...

Why Kevin Williamson is wrong about poverty and bad behavior

I recently wrote a post at Bloomberg Opinion arguing that "bad behavior" - drug use, violence, single parenthood, and idleness - is not the main cause of poverty in advanced nations. As evidence, I cited the country of Japan, which has extremely low rates of drug use, violence, single parenthood, and idleness, and yet which has a poverty rate almost as high as that of the U.S., and significantly higher than those of wealthy European...

Giving SkyCity the convention centre was a very big mistake – Peter Singer edition

Another for the Eric was wrong file.I had thought that the SkyCity deal was the least bad way of getting a convention centre conditional on the government wishing to be involved in paying to have a convention centre.I don't think that governments should be involved in paying for convention centres.And we should view the regulatory concessions granted to SkyCity in that deal as having an opportunity cost to the state equivalent to what those...

Jury verdicts: evidence from eighteenth century London of the dangers of sequential decision-making

Summary When juries in criminal courts determine whether a defendant is guilty or not guilty, are their decisions at all influenced by the verdict and characteristics of the previous trial on which they were sitting? In an ideal world, every case should be assessed solely on its own merits, but a new study suggests that there is a strong element of what economists call ‘path dependency’...

Alan Durning—Yes, You Can Build Your Way to Affordable Housing: Lessons from Unexpected Places

“You can’t build your way out of a housing affordability problem.” That’s conventional wisdom. I hear it all the time: Prosperous, growing, tech-rich cities from Seattle to the Bay Area and from Austin to Boston are all gripped by soaring rents and home prices. But what if you can build your way to affordable housing? What if, in fact, building is the only path to affordable housing? What if cities around the world have been building their...

John Roemer talks about the challenges of becoming a researcher to the students of the Applied Economics Seminar at The Graduate Center

This is the second in a recurring series of interviews where the PhD students at The Graduate Center talk with economists and other social scientists about their work and research experience. With these interviews the students are exploring the challenges of formulating good research questions and establishing a research agenda. Hopefully, other early career researchers will find this series a helpful tool. In this installment, Goncalo Costa,...

32+ Years…

Homelessness, inequality, and segregation are a housing problem

NY Times article based on Golden Gates: Fighting for Housing In America Nearly all of the biggest challenges in America are, at some level, a housing problem. Rising home costs are a major driver of segregation, inequality, and racial and generational wealth gaps. You can’t talk about education or the shrinking middle class without talking about how much it costs to live near good schools and high-paying jobs. Transportation accounts for...

Allan Meltzer’s Life Work

The Hoover Press and the Mercatus Center have just released a new book on Allan Meltzer's contributions to economics. The book is comprised of papers that were presented at a 2018 conference commemorating his work on the monetary transmission mechanism, the history of the Fed, and his more general work on public policy. Below is the table of contents for the book: I happen to be the editor of the book and, as seen above, have two chapters...

Structural, Not Cyclical, Budget Reform

Today I published a column in Project Syndicate on fiscal policy. I am positive about pro-growth effects of the tax reform in the 2017 tax act and of the greater use of cost-benefit analysis in the recent regulatory reform effort. And the recent trade deals—the USMCA and “phase one” with China—take away some threats of trade wars. But there is still a fiscal policy problem due to the growing federal budget deficit and debt. Fortunately, this...

Health spending

Via the always excellent Marginal Revolution, which has its own commentary,  a splendid Random Critical Analysis post "why conventional analysis on health care is wrong."Why does the US spend so much more on health care than other countries? Well, in part because we are a lot richer. We buy a lot of luxury goods. The ...

The Incentive Auction for Radio Spectrum

The Incentive Auction for Radio Spectrum February 25, 2020 in Auctions, economics, market design, Mechanism design, political economy | Tags: Incentive Auction Over a rabelaisian feast with convivial company, conversation turned to a twitter contretemps between economic theorists known to us at table. Its proximate cause was the design of the incentive auction for radio spectrum. The curious can dig around on twitter for the cut and...

Carbon Prices, not Monetary Policies, Are the Tools to Fight Climate Change

TweetJanuary 23, 2020 —  Everyone agrees that Climate Change is at the top of the list of most important policy issues that we face – everyone, with a few exceptions such as Trump supporters who call it a hoax.  Identifying the problem, however, is not much use unless we also identify the appropriate tools to address the problem. Financial institutions In my own field of specialization, central bankers have caught Climate Change fever. ...

Will The Housing Market Strength Last?

Posted on 22 February 2020 by UPFINA Weekend Reading from UPFINAThe February housing market index fell from 75 to 74 in February which is still a very strong reading as the index is now 2 points off its expansion high. The housing market is quickly becoming one of the hottest areas of the economy. Homebuilders were helped by the warm weather in December and January, while buyers love the low mortgage rates.Please share this article - Go to...

Markets not live, Monday 24th February 2020

When we started doing this, the “Markets not live” branding was just a handy way to harvest searches for the legacy service. It now feels more like a portent. That’s a 2 per cent gain for the FTSE 100 in the three month hiatus between ML and MnL, and a 5.4 per cent drop since. You’re welcome.The theme of today is risk-off following a surge in coronavirus cases in Italy, South Korea and Iran over the weekend. Last week, there was a lot of...

How Coronavirus Poses New Risks to Latin America’s Sputtering Economies

First appeared at Americas Quarterly The outbreak in China has already affected economic sectors in Latin America. Is there more to come? China’s economy has come to a sudden stop. Large parts of the country remain in shutdown mode after the end of the Lunar New Year holiday, with national passenger traffic declining by 85% on the Wednesday after the break compared to 2019. Outside of China, the impact of the slowdown has already been felt,...

Brainteasers From My Dad

When my sister and I were little, our Dad would challenge us with riddles and word games. I mentioned three in my eulogy for Dad: 1. Imagine a two-volume dictionary sitting on a shelf. Each volume has 500 pages. A bookworm is on the first page of letter A. It wants to eat its way to the end of letter Z as fast as possible. How many pages does it need to eat? 2. Should you walk to work or bring your lunch? 3. Is it warmer in the summer or in...

Funds that market themselves as sustainable investments aren’t necessarily focused on companies that fight climate change, develop wind turbines or promote diverse boards

See Big Technology Stocks Dominate ESG Funds: The most commonly held S&P 500 stocks in actively managed sustainable equity funds last fall were giants including Microsoft, Alphabet and Apple by Akane Otani of The WSJ. Excerpts: "Funds that market themselves as sustainable investments aren’t necessarily focused on companies that fight climate change, develop wind turbines or promote diverse boards.Instead, many of them look a lot...

A Question for Bernie

"Senator Sanders. You regularly say that you want the U.S. healthcare system to be more like those in Europe, with their less expensive, more inclusive, government-run systems. Well, in Europe, physicians are paid less than half what physicians are paid in the United States. (See below.) Is a massive cut in physician salaries a part of your vision for the future of the U.S. healthcare system under a Sanders administration? If so, don't...

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: Super Mario to the rescue

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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...

Some Links

A couple of links to things I have been working on… My paper entitled, “The Riksbank, Emergency Finance, Policy Experimentation, and Sweden’s Reversal of Fortune” is now forthcoming at the Journal of Economic Behavior and Organization. The paper includes a lot of background on Swedish governance and fiscal capacity, as well as information about the early Swedish monetary system and the Riksbank. I argue that the constraints on the Riksbank...

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...