Wrap Up for June 2018

Neil Irwin (NYT): "...the United States is not as stable and reliable a place to do business as you once thought."

"Labor force growth accounted for 50% of US GDP gains between 1950 and 2015."

Given industrial production levels during this period, why was there no recession call in 2015/16?

Tim Duy: "Beyond September, the game will become more complex."

"Now, executives of big U.S. companies suggest that the days of most people getting a pay raise are over, and that they also plan to reduce their work forces further."

There's some disagreement over the size and potential of the gig economy. Has it become smaller than we think?

High skill time based service dominance - in terms of aggregate revenue demand - likely affects this outcome. In these sectors, it's easier to associate technological gains with specific professional roles, rather than entire worker distributions. "Productivity and Pay: Is the Link Broken?"

Annie Lowrey tells a tale of two economies.

"Income and Wealth Inequality in America" from 1949 to 2016

More flexible ownership options, would mean more personal agency and autonomy in our lives: a thoughtful post from Kevin Erdmann.

It's probably a good thing this referendum didn't pass!

Sometimes the most useful determinant of value, is whether process complexity could instead be kept as simple as humanly possible. And again, less unnecessary complexity, please.

How might a lack of media of exchange, disrupt trade instead of output and employment?

This version of "affordable living" is reminiscent of science fiction.

Will autonomous vehicles become the general equilibrium stimulus that some now foresee?

"...risks that hit quickly are taken more seriously than risks that accrue slowly over time, even if the slow-stewing risks cause more havoc when they burst."

What does "guaranteed" emergency care really mean?

Money is running short for federal prison staffing.

If only other aspects of economic policy were as boring as FOMC communications have recently been.
"...no one is even talking about how to start living within our means."

"From 2007 to 2017 the fraction of Americans employed fell by 2.9 percentage points."

What to make of the growth in corporate bonds?

When it comes to big spending cuts, the blame has to be spread around.

"One-third of the world's 300 largest metropolitan economies are now in China."

Breaking up Google isn't a good idea. I've been worried about these arguments, because Google has become such an important part of knowledge preservation - especially for those whose contributions to societal dialogue might ultimately be lost.

Fortunately, some tech jobs don't require a bachelor's degree. Or a coastal location.

Arnold Kling, from a recent National Affairs Article:

There are many drivers of job satisfaction. Monetary compensation, status and work relationships can all play a role, as can a sense of accomplishment, meaning, structure, and control, among other things. And, as with happiness, occupational satisfaction is comparative. Often we become annoyed at the thought of others attaining higher status or earning more money based on relatively few skills or little effort, but we tend to neglect to consider the hardworking people with advanced skills who have relatively low-status and low-income employment.

How might a recessionary trend actually matter, if losses in monetary representation translate into people doing more things for themselves, instead of achieving those ends through shared formal employment? Nick Rowe also responds to Scott's post.
And, "There is no circular flow of income; there is a circular flow of money."

Reducing the "fear factor" of artificial intelligence.

By no means has the economy returned to "a more normal place".

"Fintech is more limited in scope than monetary tech. Only that portion of the population that uses these innovations is affected - everyone else's financial habits continue on as before. Recent examples include bitcoin, p2p lending, and roboadvisors."

In time arbitrage, with its divisions of labour which would take individual and group routines into account, it also helps to consider that "At any point in life, people spend their time in 25 places."

It turns out this isn't the first time patent litigation has been a problem.

Will deep learning algorithms "hit a wall" before they become useful at a broad societal level?

A good example of the need for knowledge preservation on more sustainable terms: "A Quarter of Private Colleges Ran Deficits in 2017."

Who will be initially affected by the trade war?