Weekend reading
This is a weekly post we publish on Fridays with links to articles that touch on economic inequality and growth. The first section is a round-up of what Equitable Growth has published this week and the second is work we’re highlighting from elsewhere. We won’t be the first to share these articles, but we hope by taking a look back at the whole week, we can put them in context.
Equitable Growth weekly round-up
Is the U.S. financial sector too passive or too active? Nick Bunker sifts through the critiques and potential implications for the U.S. financial sector.
Home care workers have historically been excluded from basic labor protections but Bridget Ansel highlights a new court ruling that has important economic and cultural consequences for this often-overlooked segment of workers.
For economists focused on economic growth, productivity is the Holy Grail. It’s the source of long-run economic growth and steady wage gains for workers. Nick Bunker looks to uncover what we really mean when we talk about productivity and how it drives our understanding of equitable growth.
A new issue brief by Oya Atkas provides a timely reminder of the intellectual history of the minimum wage and overtime and details the arguments that shaped hour and wage limits in the early 20th century.
Links from around the web
With hard data on student debt sparse, stories about the rapid increase in this kind of debt have focused on graduates of four-year universities. But new research released this week by Adam Looney of the Treasury Department and Constantine Yannelis of Stanford University, and covered by University of Michigan economist Susan Dynarski, shows that the rise in debt and defaults has been driven by students at for-profit universities and community colleges. [the upshot]
Traditional monetary policy isn’t effective when interest rates hit zero.And even some forms of unconventional policy, like quantitative easing, aren’t as powerful as previously thought. What’s the solution? Paul Krugman says: “When you print money, don’t use it to buy assets; use it to buy stuff.” [ny times]
J.W. Mason continues to dig into the data on shareholder payouts and capital reallocation. This time around he looks at leaders in payouts. As he writes, “It’s hard to shake the feeling that what distinguishes high-payout corporations is not the absence of investment opportunities, but rather the presence of large monopoly rents.” [the slack wire]
As the unemployment rate has continued its descent toward 5 percent, analysts and economists have wondered why wage growth hasn’t taken off. Economists at the New York Federal Reserve look at the job-to-job transition rate and find it’s a better indicator of wage growth. [liberty street economics]
One of the arguments against the Federal Reserve raising interest rates later this month is that the labor market is far from full employment. But when will it get there? Jared Bernstein and Ben Spielberg crunch the numbers and find, assuming employment growth continues at its current pace, the answer is March 2017. [on the economy]
Friday figure
Figure from “The pace of productivity growth and misallocation in the United States” by Nick Bunker.