Economy / Finance

A tao of politics

Mar 29 11:21pm interfluidity
Most uses of language can be understood in both referential and functional terms. If I tell the policeman “He ran the red light”, in referential terms I am claiming that, in some world external to my language, there was a car driven by a person I refer to as “he” which crossed an intersection while […]...
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Informational constraints on antipoverty programmes

Mar 29 8:00pm Recent Articles
Policymakers face challenges when trying to identify the right targets for antipoverty programmes. This column assesses whether the data typically available to policymakers in sub-Saharan Africa are up to the task. Commonly used proxy means tests are found to perform worse than simpler methods in identifying poor households. Moreover, analyses of nutritional status reveal substantial inequality within households, suggesting that household-based measures are not very effective in identifying disadvantaged individuals.
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Introducing a new Vox series: CEPR Flashbacks: Insights from past reports

Mar 29 8:00pm Recent Articles
This column introduces a new series – CEPR Flashbacks – which highlights past CEPR reports that are relevant to today’s challenges. In many cases, the analysis is highly pertinent to today’s policy questions, while in others the reports provide useful context on how leading thinkers approached similar problems in the past. The first CEPR Flashback highlights a 1995 report, “Flexible Integration”, which suggested a solution to the problem that EU leaders are tackling in their current reflection on the Future of Europe.
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Persistently Sluggish Productivity Will Slow Hiring Activity

Mar 29 7:34pm Credit Trends from Moody's Analytics
Dismal labor productivity growth eventually implies likewise for labor’s purchasing power.
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Economic Roundup: No Going Back Now for the U.K.

Mar 29 5:34pm Credit Trends from Moody's Analytics
Britain triggers Article 50 to begin process of leaving the EU.
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Do Americans Profit from the Export-Import Bank?

Mar 29 3:21pm Cafe Hayek
TweetHere’s a letter to correspondent Ron Lester: Mr. Lester: You’re correct that Export-Import Bank supporters insist that this Bank is a good deal for Americans because most of the loans that it makes to foreign buyers of American exports are repaid with interest to the U.S. government. Alas, this repayment record does not mean that […] The post Do Americans Profit from the Export-Import Bank? appeared first on Cafe Hayek.
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Fed's Rosengren wants four rate hikes this year

Mar 29 11:30am Economy
Rosengren said four moves should be the Fed's "default" position unless the data dictate that a shift is necessary.
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A Stronger NATO Welcome to Montenegro! Russia Beware

Mar 29 11:07am A Marketplace for Ideas
A stronger NATO is what we need.   Especially the native Europeans, what with President Trump’s threats and innuendos suggesting reduced U.S. support. More tanks, bombers, fighters, armies – anything to push back against the hegemonic Putin.  And more vital military installations – naval bases, landing strips, army stations.  Yes, yes we must push back against Russian aggression. … Continue reading A Stronger NATO – Welcome to Montenegro! Russia Beware The post A Stronger NATO – Welcome to Montenegro! Russia Beware appeared first on A Marketplace for Ideas.
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Homebuilders struggle to fill jobs 'Americans don't want'

Mar 29 10:28am Economy
In Denver, homes are taking about two months longer than normal to build because the workforce is slim.
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Podcast: Luxury for the masses?

Mar 29 10:20am Economics
The Chinese middle class led a boom in demand for luxury goods. But a government crackdown made consumers wary about showing off their wealth. How has China’s new modesty affected the luxury business as a whole? Also: India’s power sector has until now been dependent on using dirty coal but things are changing. And sand has become a scarce resource, leading to a burgeoning trade in illegal mining. Simon Long hosts.
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An influential GOP senator throws cold water on the polarizing House border tax provision

Mar 29 10:01am Economy
Republicans should pursue a "more traditional" approach to corporate tax reform, Sen. Rob Portman tells CNBC.
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Pending home sales see warm spring surge, up 5.5%

Mar 29 10:00am Economy
A monthly index of signed sales contracts to buy existing homes rose 5.5 percent in February.
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Repetition of this Point Passes a Cost-Benefit Test

Mar 29 9:30am Cafe Hayek
TweetBelow the fold is a comment that I left on this EconLog post by Bryan Caplan.  My comment is in response to a comment left, on the same post, by Thaomas – who, I believe, is the Thomas Hutcheson who sometimes comments here at Cafe Hayek.  Thaomas and Thomas Hutcheson frequently complain that libertarian and […] The post Repetition of this Point Passes a Cost-Benefit Test appeared first on Cafe Hayek.
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Fed's Evans says he supports one or two more rate hikes this year

Mar 29 9:21am Economy
One of the Federal Reserve's most consistent supporters of low interest rates said he supports further rate hikes this year.
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Trump cant keep up with all his promises and neither can the US budget

Mar 29 8:16am Economy
Gone are the days when stern Republicans imposed fiscal discipline.
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Is the tax exclusion for employer-sponsored insurance regressive?

Mar 29 8:00am The Incidental Economist
If you were to ask 100 randomly-selected health wonks, probably 92 would say that the tax exclusion for employer-sponsored insurance is bad policy. This is one of those issues on which liberal and conservative health economists agree. Liberal and conservative politicians agree with each other, too, though not in the way hoped for by economists. […]...
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Training your brain so you dont need reading glasses

Mar 29 7:00am The Incidental Economist
The following originally appeared on The Upshot (copyright 2017, The New York Times Company). By middle age, the lenses in your eyes harden, becoming less flexible. Your eye muscles increasingly struggle to bend them to focus on this print. But a new form of training — brain retraining, really — may delay the inevitable age-related loss of […]...
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Two views on fighting world poverty

Mar 28 10:57pm Chris Blattman
  Not everyone like my idea for fighting world poverty. Bill Gates wants to solve African poverty by helping more poor people raise chickens. So recently I wrote Gates an open letter in Vox asking him two things. First, consider cash, because … Continue reading → The post Two views on fighting world poverty appeared first on Chris Blattman.
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Week 1 of my Order & Violence course

Mar 28 10:00pm Chris Blattman
The syllabus is here and the slides are here for those that are interested in following along. Unfortunately I am not quite organized enough to offer an online lecture to accompany, but perhaps in future. I increasingly think I might turn … Continue reading → The post Week 1 of my Order & Violence course appeared first on Chris Blattman.
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Economic growth in the US: A tale of two countries

Mar 28 8:00pm Recent Articles
The rise of economic inequality is one of today’s most hotly debated issues. But a disconnect between the different data sets used to measure and understand inequality makes it hard to address important economic and policy questions. In this column, the authors highlight the findings from their attempt to create inequality statistics for the US that overcome the limitations of existing data by creating distributional national accounts.
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Information changes attitudes towards immigrants

Mar 28 8:00pm Recent Articles
There has been a surge of anti-immigrant sentiment in the US and many European countries. This column uses survey results to show that accurate information about numbers of immigrants changes opinions on whether there are too many immigrants, but not on policy towards them. More detailed information on the characteristics of immigrants, however, can increase support for pro-immigrant policies, particularly among those who start off with the most negative views on immigration.
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Post-Brexit trade and development policy

Mar 28 8:00pm Recent Articles
Regardless of what one may think of the decision, the British people have voted to leave the EU – a result that throws up historic challenges as well as historic opportunities. This column introduces CEPR's latest Policy Insight, which suggests that Brexit should be viewed as an important opportunity for fresh thinking.
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Student Debt and Consumer Auto Loans Speed Past Wage & Salary Income

Mar 28 7:33pm Credit Trends from Moody's Analytics
for too many erstwhile students, the funding of an education with debt has proven to be a highly unproductive use of credit.
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Economic Roundup: Q1 U.S. GDP Now Tracking 1.3%

Mar 28 6:34pm Credit Trends from Moody's Analytics
Trade appears to be less of a drag, but the inventory build is coming in light.
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Costs Are Not Comforts, and Burdens Are Not Benefits

Mar 28 6:23pm Cafe Hayek
TweetHere’s another letter to the indefatigable Mr. Nolan McKinney: Mr. McKinney: Scolding me for criticizing Sen. Tammy Baldwin’s “Buy American” bill, you praise the senator for what you call her “realism in that low priced imports destroy American jobs and prosperity.” With respect, if you and Sen. Baldwin really believe that Americans’ greater access to […] The post Costs Are Not Comforts, and Burdens Are Not Benefits appeared first on Cafe Hayek.
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Fed's Powell says central bank still in 'wait-and-see' stance regarding Trump policies

Mar 28 5:59pm Economy
"The scope, the timing and the contents of fiscal policy remain pretty uncertain, and we are just going to have to wait and see," Powell said.
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Centralized Cost-Benefit Analysis Fails the Cost-Benefit Test

Mar 28 1:43pm Cafe Hayek
TweetResponding to this EconLog blog post by Alberto Mingardi (which itself is on my colleague Dan Klein’s recent op-ed on the U.S. Food and Drug Administration), EconLog commenter Thaomas writes: These all sound like what one would get if FDA followed cost benefit principles in its operation. THAT is what we ought to seek, not […] The post Centralized Cost-Benefit Analysis Fails the Cost-Benefit Test appeared first on Cafe Hayek.
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Lotta Moberg on Special Economic Zones

Mar 28 11:44am Cafe Hayek
TweetGMU Econ alum Lotta Moberg’s excellent new book, The Political Economy of Special Economic Zones, is now out and available for purchase. Here’s publisher Routledge’s description: Special Economic Zones (SEZs) have become a popular development policy throughout the world over the last half a century. These zones form designated areas where governments offer businesses lower taxes, […] The post Lotta Moberg on Special Economic Zones appeared first on Cafe Hayek.
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Open Letter to Sen. Tammy Baldwin (D-WI)

Mar 28 9:56am Cafe Hayek
TweetSen. Tammy Baldwin (D-WI) Capitol Hill Washington, DC Sen. Baldwin: Seeking to protect American steel corporations and workers from foreign competition, you introduced legislation to require that “100 percent American-made iron and steel is used in water infrastructure projects funded by the Drinking Water State Revolving Fund (DWSRF).”  In your statement meant to justify this […] The post Open Letter to Sen. Tammy Baldwin (D-WI) appeared first on Cafe Hayek.
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First-quarter GDP estimates could rise as February trade deficit narrows sharply

Mar 28 9:26am Economy
The U.S. goods trade deficit narrowed sharply in February, which could prompt economists to raise their estimates for first-quarter gross domestic product.
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Monthly US home-price gains reach 31-month high

Mar 28 9:00am Economy
The index found that home prices rose 5.9 percent year over year in January.
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US heading for recession after 2 years of unsustainable growth, economist says

Mar 28 7:39am Economy
The U.S. is headed for a recession in the next two years as excessive fiscal stimulus takes the economy into unsustainable territory.
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What happens next to the ACA?

Mar 28 7:00am The Incidental Economist
This post was co-authored with Rachel Sachs, a law professor at Washington University School of Law. It has been cross-posted at Take Care, a new blog concerned with President Trump’s constitutional duty to take care to faithfully execute the law. In his speech after withdrawing the Republican health care bill from consideration on Friday, Speaker of […]...
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The Brexit arguments work for Scotland too

Mar 28 6:19am Economics
THERE is an old chess short story about the grand master who ends up in a remote village. Short of money, he agrees to pay two locals; his meal will be free if he wins both matches. But there is a catch; in one game, he must play as white, in the other as black. As soon as the matches start, he realises his mistake when the man playing white in the second game simply copies the grand master's moves as white in the first.  No matters what the master does, he cannot win both games; if he wins in the first, he must lose in the second.The three-way negotiations between Britain, the EU and Scotland could yet work out the same way. Every argument used by Theresa May against the EU can be used her by Nicola Sturgeon.Taking back control. The Leave campaign clearly resonated with voters when it talked about the need for Britain to take back control of its laws from a remote Brussels bureaucracy. But the argument applies just as well in Scotland where the Conservatives last won most seats in 1955; in the 2010 and 2015 elections, the Tories got one seat but the Scots still ended up with a Conservative prime minister. It will probably happen in 2020 as well. Do the Scots have...Continue reading...
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Trumps take on corporate tax rate could look very much like Obamas

Mar 28 6:05am Economy
The rate may need to be 28 percent so the president’s plan is tax neutral. When Barack Obama proposed that figure, repeatedly, Republicans called it too high.
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Which States Account for Our Trade Deficit with Mexico?

Mar 28 5:30am On the Economy blog
The U.S. state with the largest trade deficit with Mexico doesn’t border the country. Far from it, actually.
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Cohort Size and Cohort Age at Top US Economics Departments

Mar 27 9:46pm Stochastic Trend
I'm working on a new bibliometrics paper with Richard Tol. We are using Glenn Ellison's data set on economists at the top 50 U.S. economics departments as a testbed for our ideas. I had to compute the size of each year cohort for one of our calculations, and thought this graph of the number of economists at the 50 departments in each academic age year was interesting:There isn't as sharp a post-tenure drop-off in numbers as you might expect, given the supposed strict tenure hurdle these departments impose. But as we can see the cohorts increase in size up to year 5, which might be explained by post-docs and other temporary appointments, or people even moving up the rankings after a few years at a lower ranked department. So, as a result, the tenure or out year would be spread over a few years too. On the other hand, as the data were collected in 2011, the Great Recession might also explain lower numbers for the first few years.A post-retirement drop-off only really seems to occur after 39 years. The oldest person in the study by academic age was Arnold Harberger.
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Economic resilience: The growth and economic fragility trade-off

Mar 27 8:00pm Recent Articles
Severe recessions have been frequent among OECD countries over the past four decades. This column explores the implications of various broad types of policy to minimise the risk and frequency of such episodes for the trade-off for the growth-fragility nexus. Product and labour market policies improve growth but are essentially neutral with regards to economic risks, while better quality institutions increase both growth and economic stability. Macroprudential and financial market policies, on the other hand, entail a trade-off between growth and risk.
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The Feds price stability achievement

Mar 27 8:00pm Recent Articles
US monetary policy has been the target of substantial criticism over the years. This column outlines one key area where the Federal Reserve has done remarkably well – managing price stability.  Its ability to control inflation is a key reason that, for the sake of the US and global economies, the Fed’s independence should be preserved.
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How the Federal Reserve controls interest rates

Mar 27 7:45pm Econbrowser
The way in which the Federal Reserve controls the short-term interest rate today is completely different from the way things worked ten years ago. I was looking for a good description of how the current system works and couldn’t find one, so decided to write my own. Ultimately a central bank’s ability to control the […]...
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US Equities Shrug Off Healthcare Dud as Lower VIX Favors Thinner Spreads

Mar 27 7:34pm Credit Trends from Moody's Analytics
Notwithstanding the recent widening of spreads, the high-yield bond spread still effectively prices in a reduction by default risk.
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Economic Roundup: Washington Could Begin to Test U.S. Business Confidence

Mar 27 6:34pm Credit Trends from Moody's Analytics
Attention shifts to corporate tax reform, but there are more pressing issues to tackle.
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Healthcare Triage: Premium Support, Medicare, and Obamacare

Mar 27 4:09pm The Incidental Economist
A number of Republican health care policy proposals that seemed out of favor in the Obama era are now being given new life. One of these involves Medicare, the government health insurance program primarily for older Americans, and is known as premium support. That’s topic of this week’s Healthcare Triage. This episode was adapted from a column Austin and […]...
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Chicago Fed's Evans: Failure of GOP's health-care bill 'adds to uncertainties' in US

Mar 27 4:05pm Economy
Chicago Fed. President Evans said Monday that inflation looks "well on its way" to reaching economic objectives.
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More on the Injustice of Trade Retaliation

Mar 27 1:12pm Cafe Hayek
TweetHere’s another letter to the very insistent Mr. Nolan McKinney: Mr. McKinney: You again insist that “government is duty-bound to protect our companies from subsidized foreign competitors.” And I again insist that such foreign subsidies, in addition to enriching Americans as a whole, visit no unfairness or injustice on American producers.  The reason is that […] The post More on the Injustice of Trade “Retaliation” appeared first on Cafe Hayek.
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Glorious Time to Be Russian Free Speech in the Moscow Springtime

Mar 27 11:40am A Marketplace for Ideas
What a glorious time to be Russian.  Governed by a constitution that provides “freedom of ideas and speech” for everyone.  And other wonderful freedoms, including a “freedom of conscience” and a “freedom of religion.”  A Russian can’t “be forced to express his views and convictions or to reject them.”  Thank God “censorship shall be banned.” … Continue reading Glorious Time to Be Russian – Free Speech in the Moscow Springtime The post Glorious Time to Be Russian – Free Speech in the Moscow Springtime appeared first on A Marketplace for Ideas.
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There is no debt ceiling crisis, at least for now

Mar 27 10:13am Economy
As policymakers battle over Trump's economic initiatives, they won't have to worry about the U.S. becoming a deadbeat.
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Heres what small businesses want more than an Obamacare repeal

Mar 27 9:44am Economy
As a bloc, small-business owners have been among the health care law’s most vocal opponents, NYT reports.
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Growth under Trump to remain modest despite cuts and spending, economists say

Mar 27 9:12am Economy
A poll of economists says growth is expected to accelerate but remain modest, even if Trump's tax cuts and infrastructure spending are implemented.
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Twelve economic facts on energy and climate change

Mar 27 9:00am Brookings Topics - U.S. Economic Performance
The United States is in the midst of an energy revolution. The North American shale boom has unlocked vast quantities of natural gas, upending domestic electricity markets and enabling rapidly growing export volumes. American shale oil has sent global oil prices to their lowest sustained level in a decade and slashed U.S. imports in half. […]        ...
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North Carolina's 'bathroom bill' will cost the state $3.76 billion

Mar 27 7:00am Economy
The law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to the Associated Press.
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Residual Seasonality: The Return of an Old First-Quarter Friend?

Mar 27 5:30am On the Economy blog
The Atlanta Fed is projecting first-quarter real GDP growth at an annual rate of 1.0 percent, while the St. Louis Fed is projecting 2.7 percent.
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Trump son-in-law Jared Kushner to oversee government overhaul

Mar 27 2:22am Economy
Trump is to appoint son-in-law Jared Kushner to head a new White House innovation team to revamp federal bureaucracy.
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Macro Musings Podcasts: Jeffrey Frankel

Mar 26 11:29pm Macro and Other Market Musings
My latest Macro Musings podcast is with Jeffrey Frankel. Jeff is a professor and economist at Harvard University and directs the program on international finance and macroeconomics at the National Bureau of Economic Research. Jeff joined me to talk about the future of globalization, the dollar, the Plaza Accord, and more. It was a fascinating conversation throughout. You can listen to the podcast on Soundcloud, iTunes, or your favorite podcast app. You can also listen via the embedded player above. And remember to subscribe since more episodes are coming.
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Aftershocks of monetary unification: Hysteresis with a financial twist

Mar 26 8:00pm Recent Articles
Asymmetric aggregate supply and demand disturbances across its regions prevent the smooth functioning of a currency union. This column argues that the disturbances in peripheral regions of the US show more symmetry with those in the anchor region than is the case for the Eurozone. Moreover, disturbances to the GIPPS, which previously were in Europe’s periphery, have become more correlated with disturbances to the anchor (Germany) compared to other Eurozone countries. Hysteresis operating via the financial sector may provide an explanation for this development.
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Immigrants and innovation in US history

Mar 26 8:00pm Recent Articles
The impact of immigration on US economic development has become a controversial issue in recent policy debates. This column, arising from a study linking Federal Census data with patent records, examines the historical role of immigrant inventors in the process of US technological innovation. Immigrant inventors appear to have been of central importance to American innovation during the 19th and 20th centuries, both through their own inventive activity and through their influence on domestic inventors.
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The productivity slowdowns dirty secret: A growing performance gap

Mar 26 8:00pm Recent Articles
Even before the Global Crisis, productivity growth had slowed in many OECD countries. This column argues that the global slowdown at the aggregate level masks a deterioration in both productivity growth within firms and a process of creative destruction. Using a cross-country firm-level database for 24 countries, the authors reveal an increasing productivity gap between the global frontier and laggard firms, fewer exits by weak firms, and a decline in entry. These problems have been compounded by the failure of policy to encourage the diffusion of best practices in OECD countries.
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Unfair Trade Is Unfair Only to Foreign Consumers and Taxpayers, Not to Domestic Producers

Mar 26 1:32pm Cafe Hayek
TweetHere’s yet another letter to my prolific correspondent Nolan McKinney: Mr. McKinney: Subsidies given by foreign governments to foreign rivals of American producers do not (contrary to your argument) “in ethics justify retaliation by our government to protect our producers from that unfair competition.” All arguments that protectionism be used to combat alleged “unfair competition” […] The post Unfair Trade Is Unfair Only to Foreign Consumers and Taxpayers, Not to Domestic Producers appeared first on Cafe Hayek.
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Re-specifying the inflation target for low real interest rates

Mar 26 1:30pm longandvariable
The Fed’s John Williams has commented that the Fed should revisit the inflation target to provide for future episodes in which very low interest rates are needed. This is welcome.  Blanchard, Krugman, and many others have made the same argument. … Continue reading →...
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