Things to Read on the Afternoon of January 27, 2015

Must- and Shall-Reads:

• Heather Boushey: On “Capital in the Twenty-First Century”: “We… have lived through an era where the presumption is that our society marches always towards greater equality or less discrimination, even if slowly. But if Thomas is right… this era could be at an end… Downton Abbey… no other way for Grantham’s three daughters to maintain their standard of living other than marrying well. So, the show’s first season focuses on whether the eldest daughters would concede to marry her cousin Matthew. If Thomas is right, then once again, the rules over inheritances will make all the difference for the potential for women’s equality…. In 2014, only one-in-ten U.S. billionaires were women (11.4 percent) and the female share of self-made billionaires is only 3.1 percent…”

1. Simon Wren-Lewis: Post Recession Lessons: “I regard 2010 as a fateful year for the advanced economies… the year that the US, UK and Eurozone switched from fiscal stimulus to fiscal contraction… this policy switch is directly responsible for the weak recovery in all three countries/zones. A huge amount of resources have been needlessly wasted as a result, and much misery prolonged. This post is… about… taking that as given and asking what should we conclude…. To answer that question, what happened in Greece (in 2010, not two days ago) may be critical…. Let me paint a relatively optimistic picture of the recent past. Greece had to default because previous governments had been profligate and had hidden that fact from everyone…. Recessions… tend to be when things like that get exposed. If Greece had been a country with its own exchange rate, then it would have been a footnote… fiscal stimulus that had begun in all three countries/zones in 2009 would have continued (or at least not been reversed), and the recovery would have been robust. Instead Greece was part of the Eurozone…. Policy makers in other union countries prevaricated…. So the Greek crisis became a Eurozone periphery crisis…. This led to panic not just in the Eurozone but in all the advanced economies. Stimulus turned to austerity. By the time some in organisations like the IMF began to realise that this shift to austerity had been a mistake, it was too late. The recovery had been anemic…”
2. W. Arthur Lewis:
3. Stephanie Lo and Kenneth Rogoff: Secular Stagnation, Debt Overhang, and Other Rationales for Sluggish Growth, Six Years on: “There is considerable controversy over why sluggish economic growth persists across many advanced economies six years after the onset of the financial crisis. Theories include a secular deficiency in aggregate demand, slowing innovation, adverse demographics, lingering policy uncertainty, post-crisis political fractionalisation, debt overhang, insufficient fiscal stimulus, excessive financial regulation, and some mix of all of the above. This paper surveys the alternative viewpoints. We argue that until significant pockets of private, external and public debt overhang further abate, the potential role of other headwinds to economic growth will be difficult to quantify.”
4. Dean Baker: Did Cutting the Duration of Unemployment Benefits Lead to Faster Job Growth in 2014?: “Hagedorn, Manovskii, and Mitman…. The LAUS data are largely model driven… little direct data for many counties. The Bureau of Labor Statistics (BLS) generates employment estimates for these counties from a variety of variables…. The same sort of test can readily be constructed at the state level using the CES data… a much larger survey… of employers… [with] considerably less noise… measuring the number of jobs in the same states as we are measuring changes in benefit duration. Following HMM, I divided the states into a long duration group… and short duration group…. While HMM found the long duration group had a sharper uptick in job growth, the CES data show the opposite…”

Should Be Aware of:

• https://perma.cc/
• Jesus McQueen: “I thought the post might say something more controversial than ‘Economists are amoral, Mammon-worshipping robots.'”
• John Holbo (2003): Dead Right

1. Greg Sargent: Republican State Officials Cast Doubts on Anti-Obamacare Lawsuit: “Several state officials who were directly involved at the highest levels… all of them Republicans or appointees of GOP governors… [say] that at no point in the decision-making process… was the possible loss of subsidies even considered as a factor. None of these officials… read the statute as the challengers do. Cindi Jones…. This week, a number of states will file a brief siding with the government, arguing that nothing in the ACA indicated opting for the federal exchange would cost them subsidies. They will argue… that the challengers’ interpretation raises serious constitutional questions: The states were never given clear warning that the failure to set up exchanges could bring them serious harm…. John Watkins…. Sandy Praeger…. Linda Sheppard…”
2. Ogged: Have We Talked About Number Needed to Treat?: “Nice summary here. Longer Wired article here. NNT site here. Table of NNTs for common stuff here. Elegant little Wikipedia table here. Amazing how little effect so many established therapies have.”