Wrap Up for March 2018

Why should productivity improvements lead to a contractionary monetary response?

"If there is ever going to be a time for thinking about long-term fiscal issues, this is it."

"...while the goods sector accounted for about 44 percent of total hours worked in 1960, by 2010 this was down to just 21 percent."

From the abstract:

It was only as the productivity growth in the computer industry slowed down in the 2000s that the negative effect of differential productivity growth across jobs became apparent for aggregate productivity. Our quantitative results show that the decline in the labor share can also be explained by computerization, which substitutes labor across all industries.

Board of Governors Monetary Policy Report for February 2018

Charles Goodhart reviews Andrew Lo's Adaptive Markets: Financial Evolution at the Speed of Thought

Should the Fed be hitting the brakes?

"The odd relationship between gangster and central banker"

"...emerging market economies have accounted for 70 percent of global economic growth since the crisis - double their share from two decades ago."

From the NYT
"...hospitals should be a last resort, not the hallmark of the healthcare system. The bulk of healthcare resources should go instead into homes and communities."

In Defense of Centrists (Alice Rivlin)
"In this divided country, if the two parties do not work together to find common ground, we are doomed either to gridlock or wild swings in policy - and we will never address the hard challenges of climate change and rising debt, which demand bipartisan consensus to share the pain as well as the benefits."

"...what has changed are expectations, not estimated potential growth."

Venezuela: Is democracy still within reach?

How strong are Niall Ferguson's arguments re networks and hierarchies?

Tim Harford: "We should never forget, either, that all statistics are a summary of a more complicated truth."

The "tailwinds" aren't showing up in real consumption spending.

Labour's income share and the productivity slowdown.

3D is starting to bring down housing costs, this approach uses cement.

Output simplicity imparts system strength.

Tyler Cowen reflects on John Steward Mill for NPR.

A conversation with Chris Blattman

What is holding back consumption?

Healthcare: Maybe the U.S. isn't so different from its peers.

In the United States, Older people now outnumber children.

"The federal government has poured billions of dollars into job support initiatives that have not yielded a successful model, a troubling fact as training grows more important."

When does specialization become a problem?

"...the main effect of rising education hasn't been that everyone gets good jobs."
https://www.aei.org/publication/the-case-against-education-a-long-read-qa-with-bryan-caplan/

Incapacity benefits: "In the 1990s, these went overwhelmingly to older men, in former mining and factory towns who had lost their jobs. But increasingly they are going to younger people with low levels of education in seaside towns."

How does "Medicare Extra" compare to universal catastrophic coverage?

"Five facts about prisoners and work, before and after incarceration" (Brookings)

The government is beginning to recognize that tight money caused the Great Recession.

"I've had city officials all over the country explain that each new resident costs the municipal government money but each new business generates tax revenue and creates jobs. Preferential zoning to induce more income has been the default model for planning agencies chasing cash for decades."

Some musings on credentials. I, too, was an administrative assistant before this work came to require a college degree.

"...aging alone explains close to 40 percent of the cross-country variation in the adoption of robots."

Science Magazine explains Vaclav Smil.

Houston, Dallas and New York City in the running.

"Edward Glaeser on Joblessness and the War on Work" Russ Roberts is my age so he also remembers how in 1950, high school graduates were considered middle class. Also, the number of two-earner households has gone down since 1980, in part because of fewer marriages.

OPEC's short term management of oil prices, has an interesting correlation with Fed "control" of interest rates.

"The middle class in Europe has become more fragile."

How many steps does it take, before one reaches a fiat money definition?

An important debt oped from John Cochrane and his colleagues.

"Why does the Fed believe that inflation is going to rise?"