WHAT CAUSES RECESSIONS: LOOKING AT MICRO-ECONOMICS & HOW TO LOOK AT THE MIDDLE INCOME TRAP2/27/2019
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RADICAL INEQUALITY MEETS RADICAL MARKETS: THE SOLUTION TO AMERICA'S PROBLEM WITH INEQUALITY2/21/2019 The solution to capitalist inequality: Radical markets
Dalibor Rohac | The American Interest The problems the radical Left seeks to address are real. But their solutions are not nearly radical enough. Local experiments, rather than irreversible federal schemes, are the way to go. Yes, We Should Fear Budget Deficits Brian Riedl, E21 In the past two years, the President and Congress have enacted $2.5 trillion in tax cuts and another $2.5 trillion in higher discretionary spending (assuming both are fully extended over the decade). Annual budget deficits are about to surpass $1 trillion and are on their way to $2 trillion within a decade. The national debt has more than doubled from $10 trillion to $21 trillion since 2008, and is projected to surpass $37 trillion within the next decade. Over the next 30 years, the Congressional Budget Office (CBO) forecasts an $84 trillion avalanche of new debt. Read more here.... Trade, Technology, And Jobs: How To Think About Free Trade by John B. Taylor via PolicyEdThe consequences of free trade are very similar to what happens when a new technology is invented. In both cases goods and services get better and more affordable for everyone, new jobs are created, and some jobs are replaced. So, the next time someone proposes new trade barriers, imagine instead that they had proposed outlawing a new invention. Free Trade
with Milton Friedman, John B. Taylor, John H. Cochrane , Edward Paul Lazear, Michael J. Boskin, Richard A. Epstein, Russell Roberts, Tom Church via PolicyEdAfter a generation of trade liberalizations, many Americans—on the left and the right—are having second thoughts. HERE'S HOW TRUMP FIXES THE FED: FROM THE NY SUN & AEI EXAMINES LINK BETWEEN PRODUCTIVITY AND WAGES2/4/2019 Trump's Ideal Nominee for the Fed Editorial of The New York Sun | February 4, 2019 https://www.nysun.com/editorials/trumps-ideal-nominee-for-the-fed/90559/ The link between wages and productivity is strong
Michael Strain | Expanding Economic Opportunity for More Americans This paper outlines the wage-setting process and the conceptual issues of critical importance to any empirical investigation of the link between compensation and productivity. It presents recent evidence suggesting that the link between productivity and wages is strong. The case for growth
James Pethokoukis | Commentary Growth works, improving everyone’s standard of living, if not always equally, at least steadily. Growth signifies the evolutionary and upward surge of mankind, evident in everything from modern medicine to interstellar space travel. And a policy geared toward increasing economic growth — pursued attentively and unapologetically — will save the US. India To Become Bigger Than China Eventually: Raghuram Rajan featuring Raghuram Rajan via The Times of India India will eventually surpass China in economic size and will be in a better position to create the infrastructure being promised by the Chinese side in South Asian countries, former RBI governor Raghuram Rajan said on Tuesday. WEF 2019: Raghuram Rajan Says Indian Economy May Slow Down If A Coalition Govt Is Formed featuring Raghuram Rajan via Business Today Former RBI governor Raghuram Rajan said there was a possibility that the Indian economy might slow down if a coalition government came to power after the 2019 Lok Sabha election. In an exclusive interview to India Today at the World Economic Forum in Davos, Rajan spoke on several issues that affected the Indian economy India's Central Bank Needs Far Bigger Capital Buffer, Study Says quoting Raghuram Rajan via Bloomberg India’s central bank has insufficient capital, much less a surplus to hand over to the government, a new study shows. Cleaning Up Indore - An Excerpt From Raghuram Rajan's New Book with Raghuram Rajan via NDTVAt the same time, we do know that enhanced trade and technological change transmitted through markets have led to the loss of middle-income jobs and weakened the economic basis for the community in many parts of the developed world. It may be this, coupled with the flight of those who can leave, that is more responsible for the social disintegration of the community. What We Are Reading Today: The Third Pillar
with Raghuram Rajan via Arab NewsThe Third Pillar is a brilliant and far-seeing analysis of the current populist backlash against globalization. China can’t get its economic story straight Derek Scissors | AEIdeas China announced its 2018 economic results Sunday night. They featured 6.4 percent annualized real gross domestic product growth in the fourth quarter. Real growth was announced at 6.8 percent in the first quarter. But do we know Q1’s 6.8 was right? ASIA TIMES: FIXING CHINA'S NATIONAL ECONOMIC INDICIES Is All Economic Growth Created Equal? Oren Cass, The Bulwark Imagine a button that would instantly double the productivity of the labor market’s most productive quintile, but also cause the least productive quintile to drop out of the labor force. Would you push the button? The top quintile is more productive to begin with, so the gain from doubling its productivity exceeds the loss at the bottom—the tradeoff leaves our economy more productive and output higher. Read more here.... Growth Without Jobs Means Nothing: Raghuram Rajan
interview with Raghuram Rajan via Economic Times (India) Hoover Institution fellow Raghuram Rajan talks about how India needs to move towards a more job-creating economy, all the growth will go for nothing if India does not create good jobs. PHOTO: ANN SCHWARTZ & MILTON FRIEDMAN: BOTH KNEW THE LIMITATIONS OF MONETARIST THOUGHT. BLOOMBERG Modern Monetary Theory is a joke that’s not funny Michael R. Strain | Bloomberg Opinion The core assertion of Modern Monetary Theory -- that a government that prints its own money can always pay its bills -- is correct. Yet advocates of MMT fail to fully grapple with the inflationary risks that would come with treating government debt as wholly unimportant. With the central bank dedicated to financing the government, the task of managing inflation would become a fiscal matter, creating economic, political, and distributional problems far greater than those MMT seeks to solve. These issues are further discussed in this week's "Political Economy Podcast" with AEI scholars James Pethokoukis and Stan Veuger. What is Modern Monetary Theory? James Pethokoukis and Stan Veuger | "Political Economy Podcast" On his latest podcast, James Pethokoukis talks Modern Monetary Theory with Stan Veuger. The two discuss why MMT has suddenly become so popular, the theory’s intellectual origins, whether it has anything new to say about economics, and the political and economic risks of using the theory as a basis for monetary — and, consequently, fiscal — policy. Why Modern Monetary Theory is an unserious idea for an unserious time James Pethokoukis | The Week Is Modern Monetary Theory a fiscal cheat code for funding major expansion and creation of federal spending programs? The core observation -- that the government can always print money to pay its debt -- is true. But in practice MMT represents a mirror version of the Laffer Curve obsession seen among some on the right. Ultimately, policy decisions involve choices and trade-offs — and those presented under MMT are not appealing. Debt denial is a threat to America Desmond Lachman | The Wall Street Journal Contrary to the claims of Modern Monetary Theory's advocates, deficits do matter. There is no guarantee that the US government will be able to borrow at low rates indefinitely, and with the deficit currently exceeding 5 percent of gross domestic product (GDP) and the debt exceeding 100 percent of GDP, the debt-to-GDP ratio is set to increase indefinitely. Increased deficits will lead investors to demand higher yields on government bonds, especially if they see higher risk of inflation or default. Taking these facts into account, MMT is a recipe for fiscal ruin. Modern Monetary Theory and policy Stan Veuger | AEI Economic Perspectives Proponents of so-called Modern Monetary Theory emphasize that governments can always avoid defaulting on existing obligations denominated in a currency they themselves create. In many instances, they extrapolate from this correct observation to sweeping claims about the proper size of government and the role of monetary and fiscal policy. To the extent that these claims go beyond those of mainstream monetary doves, policymakers would be unwise to rely on them. Exposing the flaws of Modern Monetary Theory: A short-read Q&A with Stan Veuger James Pethokoukis | AEIdeas Planet Earth to Modern Monetary theorists
Desmond Lachman | AEIdeas Hopefully Modern Monetary Theory is but another passing fad with little policy relevance. If not, we should fear for our children who will have to pick up the pieces of yet another misguided economic policy experiment. John Taylor Sees 'Pretty Strong' U.S. Economy As 'Promising'
interview with John B. Taylor via Bloomberg Hoover Institution fellow John Taylor discusses the Federal Reserve's rate path, US economic strength, and the partial US government shutdown. JOHN B. TAYLOR AND HOOVER INSTITUTION RE-EXAMINE THE CRASH & WHY FINANCIAL BOOM'S ARE MURDERED12/29/2018 New Hoover Press Book Examines Causes Of 2008 Financial Crisis via Hoover Daily Report In the new Hoover Institution Press book, Gambling with Other People’s Money, Russ Roberts argues that rescuing rich people from the consequences of their decisions with money coming from average Americans is bad for democracy. Do Economic Booms Die Of Old Age?
quoting Robert E. Hall via Bloomberg Ben Bernanke got a big laugh from economists in Atlanta on Jan. 4. A few minutes after Janet Yellen said, “I don’t think expansions just die of old age,” he replied, “I like to say they get murdered.” All right, not that funny. But the nerdy repartee between the past two Federal Reserve chairs at the annual meeting of the American Economic Association reveals how central bankers think about recessions—and says something about how likely it is that the U.S. will tip into one over the next year. The Reinvention Of Economics After The Crash
quoting John H. Cochrane via Quartz Economics is searching for its third act. Over the past few decades, the field had become more self-assured, harnessed more mathematics, and moved further away from social sciences such as psychology in the direction of hard sciences such as physics. Macroeconomists, who are concerned with understanding the economy in its broadest sense, were in a self-congratulatory mood. Financial crises: Past and future Carmen M. Reinhart | AEI Economics Working Paper Series This working paper, based on Carmen Reinhart's Adam Smith Lecture at the 60th National Association for Business Economics Annual Meeting in September 2018, takes a selective global tour of some of the prominent economic and financial risks in advanced, emerging, and low-income developing economies. Financial crises: Past and future
Carmen M. Reinhart | AEI Economics Working Paper Series This article, based on Carmen Reinhart’s Adam Smith Lecture at the 60th National Association for Business Economics Annual Meeting on September 2018, takes a selective global tour of some of the prominent economic and financial risks in advanced, emerging, and low-income developing economies. She briefly discusses some persistent medium- to long-term concerns about the rising levels of US public debt, the tensions that arise from internal economic objectives, and the external pressures associated with the US dollar’s role as the world’s principal reserve currency. The tour starts with an assessment of the 2008–09 global financial crisis’ recovery experience. The crisis next time Carmen M. Reinhart and Vincent R. Reinhart | Foreign Affairs Carmen Reinhart and Vincent Reinhart argue that there remains a central warning of 2008: Countries should never grow complacent about the risk of financial disaster. The next crisis will come, and the more the world forgets the lessons of the last one, the greater the damage will be. The authors ask, 10 years after the financial crisis, what have we learned. They believe the most disquieting lesson is how complacent politicians, policymakers, and bankers had grown before the crisis and how much they had forgotten about the past. The crisis also proved that inflation can be too low. The real tragedy, however, is that none of these lessons is new; that the world had to relearn so many important lessons during the last crisis suggests that it will forget them again. Finance’s Lengthening Shadow
Nicole Gelinas, City Journal Transfer Of Excess Reserve May Pull Down Credit Rating Of RBI: Raghuram Rajan quoting Raghuram Rajan via The Economic Times Former RBI Governor Raghuram Rajan has cautioned that transfer of excess reserve to the government may bring down rating of the central bank. Economic Manifesto Released In India quoting Raghuram Rajan via Tehran Times (Iran) Top Indian economists, including former Reserve Bank of India governor Raghuram Rajan, have released an economic manifesto for India, meant to spur debate and discussion. Decision On Excess Reserves Should Rest With RBI Alone: Kaushik Basu
mentioning Raghuram Rajan via Live Mint The issue of parting with a portion of RBI reserves, which as of June stood at Rs 9.43 trillion, to the government has been a contentious issue between the government and the central bank for a long time. "All Indians Should Be Concerned," Says Raghuram Rajan On RBI Crisis
quoting Raghuram Rajan via NDTV Urjit Patel took over from Raghuram Rajan in 2016, just two months before Prime Minister Narendra Modi's colossal demonetisation move. Capital Takes All
Teresa Ghilarducci explains why, despite record-low unemployment, wages for American workers are still stagnating. What's Behind The Wall Street Journal Management Top 250
with Amit Seru via The Wall Street Journal Of the five dimensions of a company’s performance that make up our Drucker Institute rankings, innovation has stood out from the beginning as the toughest for us to capture. Not that sizing up the other four areas—customer satisfaction, employee engagement and development, social responsibility and financial strength—is child’s play. |
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KEYNES VS. HAYEK RAP
KEYNES VS. HAYEK RAP ROUND 2
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