Brad DeLong: Worthy reads on equitable growth, August 10–16, 2018

Worthy reads from Equitable Growth:

  1. An excellent contribution to Equitable Growth’s working paper series from Ioana Marinescu and Herbert Hovenkamp, who lay out the analysis of how antitrust policy should be done, given that compensated firms face their counterparties not just in the product markets but in labor markets, too. They write in “Anticompetitive mergers in labor markets” that “increased market concentration in labor markets threatens to facilitate coordinated interaction among employers that could lead to lower output and wage suppression in employment markets.” I think this is the most important thing I have seen out of our shop here at Equitable Growth this summer.
  2. Michael Kades writes in “Why market competition matters to equitable growth” that “the stakes are much higher than an ideological battle or technical adjustments to a legal regime.” He’s right. We need to understand how antitrust practice affects the degree of monopoly in the United States and how monopoly affects equitable growth and societal well-being. Today, we do not. I think that attempting to understand these two issues is the most important analytic issue for policy-relevant economic research in the United States today.
  3. The analysis of rising inequality and its effects in the United States and elsewhere over the past generation has suffered from a relative downplaying of the role of the family and how income gets earned and then transformed into well-being. Central to this is the rapidly changing economic role of women in the workforce, but that is not all of it. We need more and better analyses of how public policy needs to shift in the context of changing family structure and rising inequality. Elisabeth Jacobs presents some of our thinking about how Equitable Growth is and will be trying to support this effort in her column “Rethinking 20th century policies to support 21st century families.”
  4. Kate Bahn reminds us in her tweet: “This needs to be screamed from the rooftops every Jobs Day. We cannot have a substantive conversation about how tight the labor market is without examining demographic disparities.” She then sends us to Equitable Growth alumnus John Schmitt quoting Janelle Jones, who writes: “Despite Drop in Black Unemployment, Significant Disparities Remain.”
  5. Not to put the pressure on or anything, but I expect very good things from our Equitable Growth grant to Matthew Staiger to research “Parental Resources And The Career Choices of Young Workers,” which will have “a specific focus on the impact of parental resources on entrepreneurship and job mobility.”

Worthy reads not from Equitable Growth:

  1. Questioning the utility of history for rational self-government, David Walsh tweets: “That Twitter is the major forum for this says a lot about the pitiful state of our institutional capacity.”
  2. Erica Groshen and Robert Groves argue in “Better Data for a Better Economy” that “mov[ing] the Bureau of Labor Statistics—the source of statistics on jobs, wages, working conditions, productivity and prices—from the Labor Department to the Commerce Department is worth consideration.”
  3. Nancy L. Yu, Preston Atteberry, and Peter B. Bach note in “Spending On Prescription Drugs In The US: Where Does All The Money Go?” that “the U.S. pharmaceutical industry is characterized by a complex and often opaque system of distribution and reimbursement.”
  4. No surprise—throwing people off Medicaid has substantial costs and no benefits at all, observes Thomas DeLeire in “The Effect of Disenrollment from Medicaid on Employment, Insurance Coverage, Health and Health Care Utilization.” He writes this after examining the consequences of this action: “From July through September 2005, TennCare, the Tennessee Medicaid program, disenrolled approximately 170,000 adults following a change in eligibility rules.”
  5. A very good point is made by Ben Golub in his tweet that there is good reason not to take a markup-free model as our benchmark from which we begin our analysis of President Trump. He writes: “Krugman thinks efficiency loss of a trade war is small (Harberger triangle size) even though trade is now in intermediates along supply chains. This view is, I think, wrong because it ignores the most important thing about supply chains: complexity.”
  6. Read Cathy O’Neil’s “Mark Zuckerberg Is Totally Out of His Depth,” in which she writes: “I might be the only person on Earth feeling sorry for the big boys of technology. Jack Dorsey from Twitter, Mark Zuckerberg from Facebook, all those Google nerds: They’re monumentally screwed, because they have no idea how to tame the monsters they have created.”
  7. “There are three possible stories about how supply chains might increase the costs of trade war, and while two of them are right, I suspect that many economists are buying into the third, which isn’t,” writes Paul Krugman in “Supply Chains and Trade War (Very Wonkish).”
  8. “Every once in a while in history, cause and effect smack us in the face,” observes Michael Tomasky in “What Are Capitalists Thinking?” He writes that “the kind of capitalism that has been practiced in this country over the last few decades has made socialism look far more appealing. … If you’re 28 like Alexandria Ocasio-Cortez … what have you seen during your sentient life?”
  9. In “Trump’s trade policy is an exercise in futility,” Douglas Irwin notes: “Yet for all the Sturm und Drang … of his trade policy, the president is likely to end up being terribly disappointed by the results of his efforts.”

August 16, 2018


Brad DeLong


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