Brad DeLong: Worthy reads on equitable growth, September 21–27, 2018

Worthy reads from Equitable Growth:

1. This may well be the most important paper we publish this year: Suresh Naidu, Eric A. Posner, and E. Glen Weyl, “Antitrust Remedies for Labor Market Power,” in which the authors examine how “labor market power has contributed to wage inequality and economic stagnation.”
2. Kate Bahn puts her finger on something that has long, long bothered me about the labor market literature on inequality. She writes that “good jobs” are jobs that are well-paid, “respected occupations” are occupations that lead to good jobs, and that the “intrinsic” characteristics of the work have very little to do with whether a job is well-paid or not, and thus has little to do with whether it is a “good job” or not. Check out Kate @lipstickecon.
3. Equitable Growth Research Advisory Board member Arindrajit Dube and friends have a pick-up discussion on how to characterize the impact of employer monopsony power. Dube kicks it off with: “I think growing evidence suggests “laissez faire” equilibrium is monopsonistic. So shocks like de-unionization, outsourcing and eroding wage norms can push down pay  in ways hard to understand with competitive lab mkts. But the shock may not be increased concentration itself.”
4. Equitable Growth Research Advisory Board member Lisa D. Cook is worried that the quantity of Big Data cannot compensate for its low quality. Statistics gives us lots of power with representative random samples. Nothing can give us power without the tools to do what representativeness does. She writes: “Without taking data quality into account, population inferences with Big Data are subject to a Big Data Paradox.”

Worthy reads not from Equitable Growth:

1. Laura Tyson and Lenny Mendonca in their “Universal Basic Income or Universal Living Wage?” write that “the challenge for the future of work is not really about the quantity of jobs, but their quality, and whether they pay enough to provide a decent standard of living … A universal basic income (UBI) would be both regressive and prohibitively expensive. Yet the idea continues to attract a motley crew.”
2. Rob Johnson and George Soros in “A Better Bailout Was Possible,” argue that “a critical opportunity was missed when the burden of post-crisis adjustment was tilted heavily in favor of creditors relative to debtors …. When President Barack Obama’s administration arrived, one of us (Soros) repeatedly appealed to Summers … [for] equity injection into fragile financial institutions and … writ[ing] down mortgages to a realistic market value … Summers objected that … such a policy reeked of socialism and America is not a socialist country.”
3. I highlighted this two years ago. I am highlighting it again as I think it has not received the attention it deserves. Read Ernest Liu, “Industrial Policies in Production Networks,” in which he asks: “Many developing countries adopt industrial policies favoring selected sectors. Is there an economic logic to this type of interventions?”
4. Paul Krugman writes in “What Do We Actually Know About the Economy?” that “among macroeconomists, the self-criticism seems to me to be mainly too narrow: people berate themselves for, say, not giving financial markets a bigger role in their models, but few have done what they should, which is to question the whole direction macroeconomics has gone these past four decades or so.”
5. Silvia Merler writes in “Economy of Intangibles” that “over the past 20 years, there has been a steady rise in the importance of intangible investments … Intangibles share four economic features: scalability, sunkenness, spillovers, and synergies. Haskel and Westlake argue that—taken together—these measurements and economic properties might help us understand secular stagnation.”
6. Lawrence Mishel in “Further Evidence That the Tax Cuts Have Not Led to Widespread Bonuses, Wage or Compensation Growth” writes that “following the bill’s passage, a number of corporations made conveniently-timed announcements that their workers would be getting raises or bonuses … Newly released Bureau of Labor Statistics’ Employer Costs for Employee Compensation data allow us to examine nonproduction bonuses in the first two quarters of 2018.”