I’ve been meaning to discuss how increased income disparity is bad for economic growth, because in the end you wind up with insufficient labor income to fund consumption (note that America’s high consumption rate has been achieved by lowering its already low savings rate to zero) and too much capital chasing too few investment opportunities […]
Read more...Quite often, policy debates get mired in superficial, outdated, manipulated, or simply incomplete understandings of the facts. Getting relevant data is vital to coming up with intelligent approaches. Unfortunately, Paul Krugman, who has tried getting to the bottom of whether trade has increased income inequality in the US, concludes that we don’t have the right […]
Read more...Barney Frank, chairman of the House Financial Services Committee, has the reputation of having a sharp mind (and occasionally sharp tongue) and it shows in this Financial Times comment piece. The article makes a two pronged attack against the rightward economic drift of the last 30 years, noting that deregulation has not been the panacea […]
Read more...Asking good questions is half the battle in advancing knowledge, and a clever and timely piece by Andreas Georgiadis and Alan Manning of the London School of Economics does just that. The post looks into why rising income inequality isn’t strongly correlated in democracies with more concerted efforts at redistribution. After all, as wealth becomes […]
Read more...After denying the existence of rising disparities in income and wealth on it editorial pages, the Wall Street tells us that income inequality is indeed on the rise. It’s a refreshing change from January, when the Journal misrepresented a speech by New York Fed President Timothy Geithner in which he said that the growing concentration […]
Read more...Back at my desk after over two weeks of holiday and wanted to get at least one post out before responding to some comments that seemed to call for a reply and getting back in touch with news and commentary. The Asian Development Bank issued a report that found that income inequality is on the […]
Read more...Apologies to be somewhat late to this item and more terse (and spare on links for some of the arguments) than I’d normally be (I’m at sea and the satellite connection is pricey). Monday, the Financial Times reported that a poll it commissioned jointly with Harris found widespread international opposition to globalization, as well as […]
Read more...Stephen Cecchetti, professor of finance at Brandeis’ business school and former director of research for the Federal Reserve Bank of New York, makes an elegant and persuasive argument at VoxEU in favor of a single payer medical system: it’s inevitable. Why? Cecchetti starts from the premise that improved genetic testing will provide foreknowledge of an […]
Read more...Mind you, the headline above doesn’t mean that politicians curry favor of wealthy donors, but wealthy people in general. Mark Thoma provides this tidbit from Ezra Klein at the LA Times who in turn cites the abstract of a paper by Larry Bartels, Economic Inequality and Political Representation: I examine the differential responsiveness of U.S. […]
Read more...In a firm, articulate op-ed piece in the Financial Times, “Protect workers from the private equiteers,” Jack Dromey, an officer of the trade union Unite, says, “Workers deserve better in private equity deals.” I’ve gotten so used to writers that are afraid to take on the orthodoxy of free markets that it’s refreshing to see […]
Read more...The concept that cheap imports result in job losses should be a no-brainer, but it is still greeted with considerable resistance in some circles. Let’s be clear on a few points: while open trade in theory creates benefits to all parties, the system we have isn’t open trade, but managed trade. Most other countries negotiate […]
Read more...An article in the Financial Times, “High risks see super-rich pull away,” reports on a Merrill Lynch/Cap Gemini study that concludes that the super rich ($30 million or more in investable assets) are getting richer even faster than the merely rich ($1-$5 million). The world’s 100,000 “super-rich” last year extended their lead over the merely […]
Read more...Dani Rodrik posted the findings of a paper by Anna Maria Mayda, Kevin O’Rourke, and Richard Sinnot that concludes that that public has less protectionist leanings in countries with a larger government sector (which presumably means more social services). Rodrik was surprised by their conclusion. I am surprised that Rodrik is surprised. Martin Wolf, the […]
Read more...Larry Summers has a remarkable piece in the Financial Times today, “Harness market forces to share prosperity.” It’s noteworthy not so much for the information, arguments, and recommendations Summers makes regarding rising income inequality, but for the line Summers takes. After so many years in the wilderness, it appears that liberals are finally regaining their […]
Read more...An interesting shift is taking place in the economics world. Not so long ago, anyone who had anything to say against free trade was dismissed as being economically illiterate. In a surprisingly short period of time, the consensus seems to be shifting towards a willingness to admit that while free trade produces substantial benefits in […]
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