Weekend reading: “How low can they go?” edition

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 round-up

The Bank of Japan cut interest rates last week and entered the realm of negative interest rates. And Japan isn’t alone—a number of central banks have pushed interest rates below zero. But how low can they go? Demand for cash may determine the effective lower bound.

A number of states are trying to fill the gaps in the current U.S. retirement savings system by offering state-sponsored accounts. Increasing access and actual contributions to savings accounts will be critical, but let’s make sure investment fees are low as well.

A recession in the United States might be imminent. Or it might not arrive for another year. Or even several years from now. But another one will come eventually. Now’s the time to think about how to fight the next recession.

The gender wage gap is a persistent if declining source of economic inequality in the United States. As the gap has declined, so has the relative importance of the reasons for the gap. But as we potentially enter the final chapter of the convergence, it’s worth looking at the current sources for the wage disparity.

Today’s jobs report on the labor market in January showed that the employed share of prime-age workers jumped up a bit after weak growth in 2015. But looking at recent trends is a bit more sobering. At the pace of the past two years, the U.S. economy won’t reach full employment until 2022, according to Ben Zipperer.

Links from around the web

One troubling trend in the U.S. labor market is the declining rate of job-to-job moves, particularly for young workers. Fewer workers quitting and moving up the job ladder slows down wage growth. That’s why employers’ increasing use of non-compete agreements, detailed by Aruna Viswanatha, is so troubling. [wsj]

Tim Duy breaks down a speech by Federal Reserve Vice Chair Stan Fischer from this past Monday. While Fischer seems confident in the central bank’s planned rate hikes this year, he doesn’t seem to fully grasp, in Duy’s view, how new the normal is when it comes to interest rates. [fed watch]

Negative interest rates were thought to be impossible for a number of reasons—one among them that the technical feasibility of passing on negative rates to retail savers was low. But as Martin Sandbu shows, those technical concerns have been assuaged. Net savers, however, might not like how they’ve been solved. [free lunch]

A major argument in tax policy, in both academic and policy circles, is the extent to which capital income should be taxed lower than labor income. One presidential candidate—Marco Rubio—wants to take it in a direction that would greatly reduce taxes for those at the top: total abolition of capital gains taxes. Josh Barro discusses the idea. [the upshot]

You’ve probably been told not to be concerned about the falling stock market because it isn’t that connected to the real economy. But what if exactly the opposite is true? What if stock market crashes are what cause recessions? John Carney lays out the views of UCLA economist Roger Farmer. [wsj]

Friday figure

Figure from “U.S. job growth slows in January, as the nation remains years away from full employment” by Ben Zipperer.