I see two articles this morning about how increasing inequality will lead to slower growth. How Increasing Income Inequality Is Dampening U.S. Economic Growth, And Possible Ways To Change The Tide, by S&P Capital IQ. Comment on first article by ABC news, Wealth Gap is slowing US economic growth. The articles are basically describing how […]
At the 9:40 minute point of this video, Heiner Flassbeck says… “… But even people who are asking for more expansionary fiscal policies like Larry Summers or Paul Krugman, they are not talking about intervention in the labor market, but this is what is absolutely needed because there is the imbalance. It has nothing to […]
News was released today that unemployment was 6.2% in July. How close are we to the natural rate of unemployment, or as some might say the NAIRU. In my research into effective demand, I track the natural rate of unemployment. How do I determine the natural rate of unemployment? … By comparing unemployment to the […]
Matt Bruenig gives us a great breakdown of what poverty would look like if we relied on the market to solve it (as we did almost exclusively for thousands of years before the emergence of enlightened modern welfare states over the last two centuries). The poverty rate among the elderly would be > 45%. (Old […]
On a day that news comes out about wage growth perking up, the stock markets fall. (link to Dean Baker’s post) At the moment, the Dow is down 1.18% and the Nasdaq is down 1.81% for the day. The Dow has fallen below my attractor level of 16,800. A day when the stock market falls […]
This posts refers to an article written by Gary Burtless, Unemployment and the “Skills Mismatch” Story: Overblown and Unpersuasive. Mr. Burtless says that businesses are complaining about a skills shortage in an environment of lots of job openings. What kind of model might describe this situation? I have one… (link to model) Labor share represents […]
Just yesterday I posted about how weak real wages in Japan spells trouble for Abenomics. (link) Today we see by way of Stanley White and Leika Kihara at Reuters that output in Japan might be showing recession. “Output is clearly weakening, enough to make you even wonder if the economy is OK,” said Yoshiki Shinke, […]
Janet Yellen said today that there is still considerable slack in the economy in terms of labor and capital. So there is less pressure to tighten monetary policy earlier. Just for the record, from my own research there is little spare capacity left… Here is my graph… Warning! The potential GDP used in the graph […]
One economic variable that I track is the percentage of capital income used for consumption. It is not an exact number but an estimate in order to see trends over time. With the new revisions to GDP out today, I will update this variable. I have previously said that consumption by capital income would drop […]
by Joseph Joyce The BRICS and the Bretton Woods Twins The World Cup was not the only event of global significance to take place in Brazil this summer. The leaders of Brazil, Russia, India, China and South Africa met in the city of Fortaleza and announced the formation of two new financial institutions. One is […]