Readings in Economics

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    Put money to work.

    Put money to work.

    — 3 weeks ago
    #weather  #markets  #economics 
    Mohamed A. El-Erian offers six reasons why business investment has stalled, despite firms' bulging cash reserves. →

    But, while shareholders have clearly benefited from companies’ unwillingness to invest their ample cash, the bulk of the injected money has been circulating only in the financial sector. Little of it has directly benefited economies that are struggling to boost their growth rates, expand employment, avoid creating a lost generation of workers, and address excessive income inequality.

    — 1 month ago
    #economics  #el-erian 
    Dani Rodrik shows why Sub-Saharan Africa's impressive economic performance is not sustainable | Project Syndicate →

    In principle, the region’s potential for labor-intensive industrialization is great. A Chinese shoe manufacturer, for example, pays its Ethiopian workers one-tenth what it pays its workers back home. It can raise Ethiopian workers’ productivity to half or more of Chinese levels through in-house training. The savings in labor costs more than offset other incremental costs of doing business in an African environment, such as poor infrastructure and bureaucratic red tape.

    — 1 month ago with 1 note
    #economics  #africa 
    "American children are having fewer accidents than they once did, and our natural inclination is to cheer the news. The rate of “nonfatal fall injuries” among children ages 5 to 14, for example, declined by more 10 percent from 2001 to 2012. But if fewer childhood falls reflect increasing attempts to safety-proof life, the trend might not be the improvement it seems. Various indicators suggesting reduced dynamism in the U.S. economy can be viewed similarly; our inclination is to celebrate a reduction in job destruction rates, but should we?"
    — 1 month ago
    #peter orszag  #economics  #bloomberg 
    Kenneth Rogoff identifies several obstacles to keeping living standards on an upward trajectory | Project Syndicate →

    "The third problem is that of aging populations, an issue that would pose tough challenges even for the best-designed political system. How will resources be allocated to care for the elderly, especially in slow-growing economies where existing public pension schemes and old-age health plans are patently unsustainable? Soaring public debts surely exacerbate the problem, because future generations are being asked both to service our debt and to pay for our retirements."

    Might the hyper-compensated and well educated engineer unforeseen, profitable solutions to these problems?That is sometimes a problem of economic thinking, failure to account for the potential of yet-to-be-developed better ideas.

    — 1 month ago with 1 note
    #economics  #rogoff  #harvard  #project syndicate 
    "For the past three decades, one strand within the economics profession was constructing models that assumed that markets worked perfectly. This assumption overshadowed a wide body of research that helped explain why markets often work imperfectly – why, indeed, there are widespread market failures,"
    — 1 month ago with 1 note
    #Stiglitz  #Akerlof  #economics  #Project Syndicate  #markets  #government  #politics