Wrap Up for January 2021

Alex Danco provides a summary of David Graeber's Debt: The First 5000 Years.

A desalination breakthrough in water filtration.

Diane Coyle provides a quick review of Robert Nisbet's History of the Idea of Progress. Also, this Robert Nisbet essay from the Liberty Fund.

Instead of talking about saving, talk about demand for assets.

"TFP only budges when new technologies are adopted at scale, and generally this means products, not just science."

This AEI article is definitely worth the reader's time:

"For decades, America has combined the demolition of low-income neighborhoods with regulations and attitudes that impede their replacement."

Francis Coppola notes that "The IS-LM model doesn't tell us the cause: all it does is model the relationship."

Can Congress restore professionalism in our populist era?

"...the U.S. is the only established democracy to see a major decline in social trust."

The 2010s were the lowest decade on record for population growth.

Total factor productivity was already slowing down by 1965.

How credible are central banks willing to be?

Some reflections on low interest rates as a long term problem.

A simple description of the importance of AI in medicine.

On openness: "Being open to other individuals, ideas and businesses does not mean we'll end up with one-world government. On the contrary, we need different systems of rules in order to have institutional competition." Nevertheless, tribalism is presently ascendant, and that is dangerous for continued progress.

There's a difference between our preferred options and the ones which are more convenient. Importantly, convenience is also about making the most of our scarce time.

Unwinding the Fed's balance sheet isn't as straightforward as it might appear.

Reallocation continues apace.

CEOs as a political force.

Many health aides are reluctant to trust the vaccine.

"Public agencies aren't designed to be real estate developers."

"...one focus will be on giving everyday citizens direct economic upside in the city's growth."

Money supply growth has not been adequate since the Covid-19 shock.

Fortunately there are cracks in the great stagnation.

Supply and aggregate supply aren't the same thing: "What matters for stimulus is the short run aggregate supply curve." Whereas, "What matters for the minimum wage is the long run industry supply curve."

These adaptive modules combine all utilities in a single location.

How will we adapt to collapsing aquifers?

Scott Sumner notes how the center left has changed.

Do others at the Fed share Richard Clarida's vision?

The importance of trust and social capital.

"the vast majority of people who make less than median income and live in rental housing, live in private unrestricted properties." Alas, private investors have been snapping up these properties, renovating them, raising the rent and selling for a profit. How might more of these properties remain available to people with less than median income? "We are capitalists."..."We believe in capitalism. But if it's going to survive, we have to make it work for more people. A lot more people."

Michael Strain discusses Biden's economic relief plan with James Pethokoukis.

Graphs from Marcus Nunes show "compelling evidence for the monetary theory of nominal income".

"we believe that there is a real need to accelerate and simplify the architectural process."  And, "It is not enough to design the works. It is necessary, with the same rigor and commitment, to design the logistical operations associated with them."

"A new supply-side economics would recognize that productivity growth is the right target, but it would reject tax policy as the primary means of stimulating productivity." Eli Dourado continues, "Instead, it would examine how everything government does - from permitting to procurement - could be improved to increase productivity." To this, I'd add that in many instances, governments would follow up private actors in their initial efforts to create broader and more dynamic markets. A major part of government's role would be taking sufficient time and effort to understand what's involved, before granting permissions and/or exemptions for private actors - in particular for the creation of special zones which welcome a full range of income levels. Further, governments would want to assist private actors in explaining to the public what's at stake for supply side reforms, so these extensive efforts aren't ultimately derailed by opposition. 

People and firms benefit when their good or service is "necessary to a final product, but only a small share of total costs".

Sometimes, temporary disruptions have permanent effects.

Perhaps we shouldn't be surprised that facts don't always win the day.

Dietz Vollrath is agnostic regarding total factor productivity. Indeed much depends on framing, since general equilibrium is chock full of unknowns. Nevertheless, at the center of general equilibrium, non tradable sectors function as secondary services and cumulative assets such as housing, in response to sources of wealth origination. The defined equilibrium settings I've advocated for, could frame specific equilibrium points by combining aspects of tradable and non tradable sector activity in observable local conditions. Also in this framing, since economic time value would only hold a partial relation to monetary representation, it would become categorized as a form of total factor productivity for each participating group. How so? Time as an economic unit, would provide a consistent measure of knowledge use and skill gains in each observed setting. Since these gains would function alongside a monetary base they would contribute to traditional wealth origination, but they would also contribute to total factor productivity (participating group cumulative gains), via what is not expressed through monetary representation. 

"Price appreciation is now outpacing wage appreciation in 90% of housing markets nationally."