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The Archives: December 21

Links for the Week of December 14, 2015

Most-Recent Must-Reads:

  • William McChesney Martin (1958): Discussion: "That would indeed be a great feather in its cap and ultimately its success would be great..." :: And if the Federal Reserve System were to adopt bad policies in the hope of preserving its political independence, its political independence is already lost...
  • Joshua M Brown: The Woes of the Asset Managers: "Goldman is going slash-and-burn for factor investing market share with a pricing structure that rivals what State Street, Schwab, Vanguard and BlackRock are charging for plain vanilla index exposure..." :: Passive diversified portfolios with an eye toward overweighting factors that have historically offered high returns is what nearly all investors should be doing.
  • Dean Baker: The Upward Redistribution of Income: Are Rents the Story?: "[My] argument on rents is important because... it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality..." :: I think Piketty would say that Baker is wrong here...

Most-Recent Links:

MOAR Must-Reads:

  • Sutirtha Bagchi and Jan Svejnar: Does wealth inequality matter for growth?: "The relationship between politically connected wealth inequality and economic growth is negative, while politically unconnected wealth inequality... [has] no significant relationship."
  • Josh Barro: Sorry, but Your Favorite Company Can’t Be Your Friend: "Companies try to blur the lines, insinuating themselves into your friend zone..." :: It's not companies that are trying to blur the lines, so much as pro-market ideologues (and I mean that of the extremely-smart Josh Barro in the nicest possible way) trying to draw lines that cannot be sharply drawn...
  • Henry Farrell: Piketty, in Three Parts: "Piketty['s]... data... confound[s]... previous... wisdom that we didn’t need to worry about inequality. This makes a vast and important social phenomenon... visible, salient and socially undeniable..." :: the best precis of Piketty as both sociological phenomenon and political actor I have yet seen...
  • Paul Krugman (1999): Thinking About the Liquidity Trap: "fiscal stimulus... [is only] a way of buying time... [absent] assumptions that are at the very least rather speculative..." :: How very closely Krugman's fiscal-policy analysis then tracks Rogoff's analysis today...
  • Robert P. Brenner (2001): The Low Countries in the Transition to Capitalism: "The medieval and early modern Northern and Southern Netherlands... [were] the most highly urbanized and commercialized regions in Europe..."
  • Duncan Weldon: Are the Robots Taking Enough Jobs?: "[Without] big increases in... labour-saving technology... slower growth and... greater share[s] of... incomes... to support the retired..." :: I find myself, more and more, wanting substantive integrated studies of...productivity...
  • Rachel Lukasz and Thomas D Smith: Secular Drivers of the Global Real Interest Rate: "Slowing global growth... demographic forces, higher inequality and to a lesser extent the glut of precautionary saving... falling relative price of capital, lower public investment, and... an increase in the spread between risk-free and actual interest rates..." :: What the weights should be on these five possible cures... is not clear to me.
  • Peter Newcomb (2013): Fed Hawks Worry about Threat of Inflation: "Two top Federal Reserve policymakers expressed discomfort on Thursday with the U.S. central bank's easy monetary policy..."
  • Jeff Spross: Don't do it, Fed! It's a trap!: "The first thing is for voters, activists, and politicians to treat monetary policy with the seriousness it deserves..." :: How much of the current diversion between the views of Yellen and Summers is due to the drip-drip-drip of banking-sector opinions?
  • Matthew Yglesias: This week, the US government will take action to slow the economy and prevent wage growth: "for an African-American population that will enjoy a double-scale version of any drop in the unemployment rate, the stakes remain quite high. The same is true of other kinds of vulnerable populations..."
  • Neil Irwin: Yellen Blinks on Interest Rates: "The cost of waiting... to ensure that the economy continues to perform the way... models predict... [is] low..." As Stanley Fischer did not say, if the Fed raises interest rates when the odds are still only 60-40 that it should, it is not probably but definitely raising them too early
  • Tim Duy: Makes You Wonder What The Fed Is Thinking: "And so into the darkness we go." :: The extremely-thoughtful Tim Duy is... genuinely frightened...
  • Jared Bernstein: Will Inflation Really Snap Back Once “Temporary Factors” Abate?: "I noted the Fed’s theory of the case as to why inflation isn’t accelerating..." :: With model uncertainty, a rational optimizing policymaker would keep interest rates at zero for considerably longer...
  • Jon Faust: Liftoff? And then…: "The Fed’s policy projections going into the December FOMC last year showed a year-end 2015 median federal funds rate of about 1.5%..." :: I find this from Jon Faust inadequate, mostly because if its failure to make even a bow in the direction of asymmetric risks...
  • Harriett Torry and Jon Hilsenrath: Lesson for Fed: Higher Interest Rates Haven’t Been Sticking: "The Bank of Israel, under Stanley Fischer, who is now the Fed’s vice chairman, was among the first to move..." :: Much better to wait until you are sure that you will not have to return to zero in short order...
  • Robin Wigglesworth: How the US Federal Reserve Intends to Raise Rates: "Buckle up. On Wednesday, the Federal Reserve is expected to raise interest rates for the first time since 2006..." :: how will it use its tools?... It has taken off the private market will be very interesting to watch.
  • Financial Times: The Federal Reserve May Be Jumping the Gun: "Just because it seems inevitable does not mean it is a good idea..." :: The only wrong thing I see is the statement that "it would probably be more disruptive if the Fed sat on its hands"...
  • Paul Krugman: Obamacare and the Cockroaches: "Zombie ideas are claims that should have been killed by evidence..." :: Still looking, without success, for conservatives at think tanks willing to be reality-based on health care...
  • Ryan Cooper: How Climate Change Ate Conservatism's Smartest Thinkers: "Like Clive Crook, Will Wilkinson, and Walter Russell Mead, Douthat doesn't seriously engage with the evidence..." :: It is important to note that global warming is not unique here...
  • Kevin Hoover: The Methodology of Empirical Macroeconomics: "Representative-agent models [do not] provide microfundations... do not solve the problem of aggregation; rather they assume that it can be ignored..." :: The combination of representative-agent modeling and utility-based "microfoundations" was always a game of intellectual Three-Card Monte...
  • Dani Rodrik: When Economics Works and When it Doesn’t: "The efficient markets hypothesis... models... [of] sovereign debt crises.... I wish we’d put greater weight on stories of the second kind rather than the first. We’d have been better off..." :: There is an awful lot of bad right-wing economics. There is much less bad left-wing economics...
  • Zack Cooper et al.: The Price Ain’t Right? Hospital Prices and Health Spending on the Privately Insured: "Health care spending per privately insured beneficiary varies by a factor of three.... The correlation... [with] Medicare... is only 0.14..." :: Yes. Constraining hospital and doctor-group market power is very important to creating a more efficient health-care system. Why do you ask?
  • Nick Bunker: Trying to Get a Grip on the "Gig Economy": "The sharing economy... follows rather than causes the bulk of the increase in 'independent contracting'..." :: When put that way, what we need is not a halfway house between W-2 employees and 1099 independent contractors, but more expansionary monetary and fiscal policy
  • Steve Greenhouse: A Safety Net for On-Demand Workers?: "With Los Angeles having approved a $15-an-hour minimum wage and with many Uber drivers netting considerably less than that per hour, why exactly shouldn’t drivers be covered—and protected—by minimum wage laws?"

MOAR Links:

MOAR Links:

December 20, 2015 at 21:20 in #equitablegrowth, #shouldread, #weblogging | | Comments (12)

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