More than 75 years ago, the EJ – under Keynes’ editorship - published a series of papers on the behavior of real wages that have had a lasting impact on the discipline – this special anniversary session discusses debates then and now about real wage dynamics, unemployment fluctuations and wage flexibility.
I really enjoyed this session, particularly the history of "Keynesian controversies" over wages by John Pencavel at the beginning of the session.
Robert Sugden talks to Mark Thoma about his work on 'Regret Theory', as featured in The Economic Journal 125th Anniversary Special Issue, available for free online here: http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12230/abstract
Here's an example: Regret theory in practice. (Update: Maybe this isn't the best example -- it should be that the anticipation of regret alters the choice that is made).
A follow up to yesterday's post on what to do about inequality:
Inequality has been on the rise since the 1970s - Tony Atkinson and Sabine Alkire ask what can be done about it? Inequality was a topic covered in The Economic Journal 125th Anniversary Special Issue, available for free online: http://onlinelibrary.wiley.com/doi/10.1111/ecoj.12230/abstract
Watch the full session here: https://www.youtube.com/watch?v=XpdhdUkza88
Another interview, this one with Sir Professor Charles Bean, former Deputy Governor at the Bank of England and past President of the Royal Economic Society. I thought this one went well.
Efficiency matters! It can make the economy better off. Understanding efficiency in manufacturing and retail markets can help guide policy, according to prize-winning research by Daniel Muller and Fabian Herweg in The Economic Journal. See the summary here: http://www.res.org.uk/details/mediabr...
The interview was recorded at the Royal Economic Society annual conference at The University of Manchester in Spring 2015 and produced by Econ Films.
Koen Jochmans of Sciences Po speaks to Mark Thoma about his research and winning the Sargan Prize for outstanding research in the Econometric Journal. http://www.res.org.uk/details/econome...
The interview was recorded at the Royal Economic Society annual conference at The University of Manchester in April 2015 and produced by Econ Films.
[This is the first of three interviews I did -- will save the best for last.]
A widening gap between haves and have-nots is shrinking the American middle class and making it tougher than ever to move up the economic ladder. The U.S. problem reflects a worldwide concentration of wealth. The top 1 percent control 48 percent of the world's assets, up from 44 percent in 2009. Disparate voices ranging from Pope Francis to IMF Director Christine Lagarde warn that the gulf between rich and poor diminishes hope and raises serious political and economic issues. Some companies are listening. Late last year, Walmart Stores pledged to end minimum-wage pay by raising the hourly rate of 500,000 workers. Other companies followed with similar increases for their lowest-paid workers. Will their announcements spur broader efforts to reduce income equality? What else can be done to lift the standard of living for the working poor?
Moderator: Alan Schwartz, Executive Chairman, Guggenheim Partners
Speakers: Jared Bernstein, Economic Policy Fellow, Milken Institute; Senior Fellow, Center on Budget and Policy Priorities; Former Chief Economist to Vice President Joe Biden, Beth Ann Bovino, U.S. Chief Economist, Global Economics and Research, Standard & Poor's Ratings Services, Arthur Brooks, President, American Enterprise Institute, Jeff Greene, Investor and Philanthropist, Kristin Oliver, Executive Vice President, People, Walmart U.S.
In this session, Sheryl Sandberg, chief operating officer of Facebook, interviews former U.S. Treasury Secretaries Timothy Geithner, Henry Paulson and Robert Rubin about global economic trends, public finance and capital markets.
Rethinking Macro Policy III: Session 3. Monetary Policy in the Future
Chair: José Viñals, Ben Bernanke, Gill Marcus, John Taylor
Rethinking Macro Policy: Session 4. Fiscal Policy in the Future
Chair: Vitor Gaspar, Marco Buti, Martin Feldstein, Brad DeLong,
"Thomas Piketty and Joseph E. Stiglitz discuss the causes of, consequences of, and remedies for inequality. With opening remarks from Clive Cowdery, George Soros, OECD Secretary General Angel Gurria, Institute President Rob Johnson and Institute Board Members Anatole Kaletsky and Lord Adair Turner."
"In a panel discussion moderated by Dean Rich Lyons, Laura Tyson, professor of business administration and economics at the Haas School of Business, and Emmanuel Saez, economics professor and head of the Center for Equitable Growth at UC Berkeley, focus on income inequality, drawing from ideas central to Thomas Piketty's bestselling book Capital in the Twenty-First Century."
[Note: The discussion is summarized here.]
This is from INET:
The Consequences of Money-Manager Capitalism: In the wake of World War II, much of the western world, particularly the United States, adopted a new form of capitalism called “managerial welfare-state capitalism.”
The system by design constrained financial institutions with significant social welfare reforms and large oligopolistic corporations that financed investment primarily out of retained earnings. Private sector debt was small, but government debt left over from financing the War was large, providing safe assets for households, firms, and banks. The structure of this system was financially robust and unlikely to generate a deep recession. However, the constraints within the system didn’t hold.
The relative stability of the first few decades after WWII encouraged ever-greater risk-taking, and over time the financial system was transformed into our modern overly financialized economy. Today, the dominant financial players are “managed money”—lightly regulated “shadow banks” like pension funds, hedge funds, sovereign wealth funds, and university endowments—with huge pools of capital in search of the highest returns. In turn, innovations by financial engineers have encouraged the growth of private debt relative to income and the increased reliance on volatile short-term finance and massive uses of leverage.
What are the implications of this financialization on the modern global economy? According to Adair Lord Turner, a Senior Fellow at the Institute for New Economic Thinking and a former head of the United Kingdom’s Financial Services Authority, it means that finance has become central to the daily operations of the economic system. More precisely, the private nonfinancial sectors of the economy have become more dependent on the smooth functioning of the financial sector in order to maintain the liquidity and solvency of their balance sheets and to improve and maintain their economic welfare. For example, households have increased their use of debt to fund education, healthcare, housing, transportation, and leisure. And at the same time, they have become more dependent on interest, dividends, and capital gains as a means to maintain and improve their standard of living.
Another major consequence of financialized economies is that they typically generate repeated financial bubbles and major debt overhangs, the aftermath of which tends to exacerbate inequality and retard economic growth. Booms turn to busts, distressed sellers sell their assets to the beneficiaries of the previous bubble, and income inequality expands.
In the view of Lord Turner, we have yet to come up with a sufficiently robust policy response to deal with the consequences of our new “money manager capitalism.” The upshot likely will be years more of economic stagnation and deteriorating living standards for many people around the world.
Matthew O. Jackson, Stanford University Social and Economic Networks: Backgound
Daron Acemoglu, MIT Networks: Games over Networks and Peer Effects
Matthew O. Jackson, Stanford University Diffusion, Identification, Network Formation
Daron Acemoglu, MIT Networks: Propagation of Shocks over Economic Networks
Posting the video mysteriously causes formatting problems for the blog, so took it down and replaced it with link to the video:
Chris Sims: Inflation, Fear of Inflation, and Public Debt
I can't watch this, so have no idea how foolish I look, or not, or what parts of the interview they chose to include:
This panel brings together prominent economists to debate a range of issues with global scope: from inequality and emerging markets to austerity policies and the impact of technology on employment. This will be a free-ranging discussion focused on where the world is headed and what can be done to improve economies and people's lives everywhere.
If you want a tutorial on how the political right responds to inequality and mobility concerns, this video is for you (Chrystia and Jared do their best to respond, and Jared has a nice summary of all of the potential causes of inequality in his opening remarks):
Income inequality has diminished in many parts of the world--Chile, Turkey, Mexico and Hungary being a few examples. But in America, the gap has widened. Ironically, the same forces may be responsible for both: globalization and technology, which have eased poverty in the developing world but led to the loss of unskilled but well-paying middle-class jobs in the United States and other developed nations. For the first time in nearly a century, the top 10 percent of American earners take home more than half the nation's income. New research suggests that it's harder than ever for the poor to move up into the middle and upper classes, an issue that has potential consequences for our economy, government, institutions and people. What can--or should--be done to narrow this disparity? Is education the key? With many Americans falling behind, these questions are stirring concern among policymakers and the business community as well. This panel will examine the magnitude of this complex challenge and strategies for reversing the trend.
- Speakers: Jared Bernstein, Economic Policy Fellow, Milken Institute; Senior Fellow, Center on Budget and Policy Priorities; Former Chief Economist to Vice President Joe Biden
- Edward Conard, Author, "Unintended Consequences"; Former Senior Managing Director, Bain Capital
- Robert Doar, Fellow in Poverty Studies, American Enterprise Institute; Former Commissioner, Human Resources Administration, City of New York
- Chrystia Freeland, Member of Parliament, Canada; Author, "Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else"
- Moderator: Alan Schwartz, Executive Chairman, Guggenheim Partners
This session, as I thought it would be before it started, was annoying:
America's Debt and the Economy: A Hard Look at Public Spending and Finance: With mandatory programs consuming 13.6 percent of GDP and rising, security spending at 5 percent, debt service at 1.5 percent (under benign interest-rate conditions), and revenue at 19 percent, there is little or no room in the nation's budget to fund the discretionary programs that support competitiveness and growth over the long term. That will require investment in infrastructure, technology, environmental protection, education and job training, among other areas. Despite the shutdowns and threats of default, both Republicans and Democrats understand that our future prosperity demands a responsible focus on these imperatives. But how can the government's budgeting process move beyond short-term fixes? This discussion will identify areas for strategic bipartisan collaboration to put the U.S. on track for meaningful reform, leading to the creation of a budget that better addresses our challenges and reflects our priorities.
- Douglas Holtz-Eakin, President, American Action Forum; Former Director, Congressional Budget Office; Former Chief Economist, Council of Economic Advisers
- Maya MacGuineas, President, Committee for Responsible Federal Budget
- Steven Rattner, Chairman, Willett Advisors; Former Counselor and Lead Auto Advisor to the U.S. Secretary of the Treasury
- Gene Sperling, Former Director, National Economic Council, The White House
- Moderator: Maria Bartiromo, Anchor and Global Markets Editor, Fox Business Network
I heard things such as:
Need to get spending under control to create a good investment climate.
Large spending programs are crowding out discretionary programs such as defense and infrastructure.
One of the most serious issues we face.
Wait until rates go up.
Nobody in Washington is interested in talking about it.
We have to cut entitlements (Medicare, Medicaid, Social Security).
Our economic growth is lower because of the debt. Our economy is worse off because of it.
Huge benefit right now from cutting deficit.
Anyone who is sensible would agree with us.
Neither Bush nor Obama has been willing to explain to the public what a huge problem the debt is.
We need to do this, it is an important thing for our children.
President needs to make this a national priority, like it did with income inequality.
With all the problems in the world, is now the time to be cutting defense spending?
Simpson Bowles was a very, very, very good plan.
You get the idea. There was very little about tradeoffs, e.g. higher unemployment when we reduce the debt during a not so robust recovery, though Sperling did address this a bit, not enough on revenue enhancement, and -- though it did come up at times -- the relationship between health care costs and our long-term debt problems was not made as clear as it should have been.
When it comes to recovering from the recession, these people are the problem, not the solution.
But maybe I'm just being cranky (and biased from the start) -- watch the video and tell me what you think...
"The French economist Thomas Piketty discussed his new book, Capital in the Twenty-First Century at the Graduate Center. In this landmark work, Piketty argues that the main driver of inequality—the tendency of returns on capital to exceed the rate of economic growth—threatens to generate extreme inequalities that stir discontent and undermine democratic values. He calls for political action and policy intervention. Joseph Stiglitz, Paul Krugman, and Steven Durlauf participated in a panel moderated by Branko Milanovic."
This is worth watching:
Information technologies and infrastructure play an increasingly important role in daily life. But at the same time, cyber security is becoming increasingly threatened. How does society deal with these conflicting challenges.
This keynote INET panel features speakers Steven Bellovin, Yvo Desmedt, Amir Hertzberg, and Bart Preneel, moderated by Thomas Ferguson.
For those of you who just can't get enough of Larry Summers (his talk starts at the 9:00 mark):
I can't watch myself, so have no idea if this is horrible or not, but in case it's of interest:
Since Larry Summers is all the rage these days, here he is on how history will view QE:
Paul Krugman says to watch this tribute to Stan Fischer:
And here's PK's talk on Currency Regimes, Capital Flows, and Crises:
Central banks across the planet are engaging in a robust agenda that would have been unrecognizable just a few years ago. Quantitative easing, macro prudential monitoring, asset market support in Europe have all made it much more difficult to understand what a central bank does and does not do.
Can central banks easily mop up liquidity and shrink their balance sheets when the world economy begins to recover, or will inflationary dynamics emerge? In the mystical realm of money, are central banks courting controversy that will threaten their credibility and stature within society? If they lose their leading role what will markets condition their expectation upon?Charles Goodhart - Professor, London School of Economics (Paper)
Moderator: Andrew Sheng - President, Fung Global Institute
[NGDP targeting fans may be interested in what Goodhart has to say.]