United States

The firehose of affluent consumption continues to drive inflation, not the stimulus package

In persisting with its high rates policy, the Fed is acting like James Dean in the famous “chicken run” auto race in Rebel Without a Cause.

The current paper returns to the key questions of wages and incomes and how wealth effects cripple reliance on interest rates to control inflation.

The empirical analysis of public sector investments and the health value created by the drugs selected for Medicare price negotiations provides a cost basis for the assessment of the maximum fair price.

Examining the crucial role of poverty and inequality in shaping household indebtedness.

Increased hospital system consolidation in small Metropolitan Statistical Areas is adversely related to nurse wage growth.

Salaries in the U.S. aren’t keeping up with inflation, despite pandemic-related increases in some sectors. That’s a major threat to the future for all working Americans – especially the youngest.

How Showering Money on Both Parties Paralyzed Regulators

The Consumer Welfare Standard is severely limited or defective, preventing it from being an appropriate standard for modern antitrust.

Lynn Parramore explores Peter Temin’s new book on the country’s two economic histories: progress for whites, slavery and segregation for Black people. He warns of a second-tier global future unless they come together.

President Biden’s first SOTU Address was a missed opportunity to say what he knows to be true: Stock buybacks manipulate the market and leave most Americans worse off

US regulators can step in to ensure drug pricing both supports patient access and drug development

US regulators can step in to ensure drug pricing both supports patient access and drug development

To strengthen the American semiconductor industry, Congress should condition additional funds on suspending stock buybacks

To strengthen the American semiconductor industry, Congress should condition additional funds on suspending stock buybacks

On deregulation and Covid masks, libertarians are loud. On female liberty, deafening silence.

Contrary to rhetoric from Democrats and Republicans, the U.S. has an economic interest in trade and peace with China

Economist Darrick Hamilton, co-author of a new report on wealth across racial and ethnic groups in Tulsa, Oklahoma, explores the legacy of the Tulsa Race Massacre with the Institute for New Economic Thinking’s Lynn Parramore.

An excerpt from the just released book, The Outlier, by Kai Bird

Formerly incarcerated Black people emerge from prison with far less education and social skills than white ex-cons. And they have great trouble forming families or earning a good living.

For thirty years after the Civil Rights Act, a sizable share of white Southerners still voted Democrat. That changed when the party embraced trade deals that hurt American workers.

How NAFTA led to GOP dominance of the American South

Amid debates over costs—and profits—from a coronavirus vaccine, a new study shows that taxpayers have been footing the bill for every new drug approved between 2010 and 2019

An alternative look at the “global savings glut”

The success of projects for pandemic preparedness and response depends on the strength of government-business collaborations.

Over and over again, US government policies designed to transfer and create wealth and economic opportunity were restricted to whites by design.

The Fed is taking an aggressive approach to put out the economic fires of the pandemic. But it needs to allow for flexibility as some business models irreparably change.

Rising inequality has focused attention on the benefits of new technologies. Do these accrue primarily to inventors, early investors, and highly skilled users, or to society more widely as their adoption generates employment growth?

Since the 1980s, the enemy of equal employment opportunity through upward socioeconomic mobility has been the pervasive and entrenched corporate-governance ideology and practice of maximizing shareholder value.

In this introduction to our project, “Fifty Years After: Black Employment in the United States Under the Equal Employment Opportunity Commission,” we outline the socioeconomic forces behind the promising rise and disastrous fall of an African American blue-collar middle class.

A look at the American household debt boom

Increased borrowing by middle-class families with low income growth played a central role in rising indebtedness

The links between campaign contributions from the financial sector and switches to a pro-bank vote were direct and substantial

Effective and quick federal policy response is critical to create conditions for a quick recovery.

Containing Slaves, Freedmen, Jim Crow laws and the Great Migration

This paper records the path by which African Americans were transformed from enslaved persons in the American economy to partial participants in the progress of the economy.

The Irresistible Force Meets the Immovable Object?

Repeat after me: How much pipe should Fed plumbers lay if Fed plumbers like to lay pipe?

This paper provides novel insights on the changing functional distribution of income in the post–war US economy.

The New York Times’ Binyamin Appelbaum explains the role Democratic presidents, from Kennedy to Obama, in moving economic policy to the right

Economist Marie Mora discusses the deep economic crisis that has afflicted Puerto Rico for years

The Chicago School has long used bankrupt assumptions to strangle antitrust policy

The Chicago School has long used bankrupt assumptions to strangle antitrust policy.

Andrea Gabor, author of “After the Education Wars,” discusses how California is pushing back on millionaire-driven charter schools. Will the rest of the America follow?

With journalism moving from a stable to a precarious profession, digital media workers have become some of the most organized in the startup world

There is not one opioid crisis in America—there are many. And supply-focused measures won’t stop them.

Ben Power, who adapted the play “The Lehman Trilogy,” talks about the eponymous family’s role in the creation and destruction of American wealth

A collection of our research on populism, globalization and nationalism

The Chicago School’s weakening of antitrust law hurt the economy

This paper presents an historical analysis of the antitrust laws.

Prisoners employed in manufacturing constitute 4.2% of total U.S. manufacturing employment in 2005; they produce cheap goods, creating labor demand shock.

Decades before it caught on with other economists, Sadie Alexander was the first economist to recommend a government jobs guarantee in the US

Pharmaceutical pushers like Purdue “couldn’t have done their dirty work” without America’s increasingly unbalanced economy

Until 2008, rising home values gave the middle class a cushion amid growing income inequality. But following the financial crisis, that wealth has failed to return.

The Koch brothers scandal at George Mason University

It’s time to connect political violence with economic violence.

The U.S. presidential election of 2016 featured frontal challenges to the political establishments of both parties and perhaps the most shocking election upset in American history.

Sen. Tammy Baldwin features arguments in questions to SEC nominees, pharmaceutical industry witness

The 2008 financial crisis was a shock to faith in entirely free financial markets. But the neoliberal assumptions underlying the previously dominant “Washington Consensus” continue to inform much Western commentary on China’s economy.

This paper discusses household debt as a long term phenomenon that influences economies beyond crises.1 In other words, rather than look at how household indebtedness can lead to crises, I will focus on its surprising persistence at very high levels, and its interactions along the way with other key variables, such as public policies and spending. The first section describes some stylized facts and the final section explores the macroeconomic consequences.

A discussion featuring Kenneth Smith, Head of the Trade and NAFTA Office of the Ministry of the Economy of Mexico, and Jay Pelosky, Principal of Pelosky Global Strategies.

April 28-29, 2017, USC Dornsife INET is hosting a conference on inequality, globalization, and macroeconomics at the University of Southern California. The goal of this conference is to bring together leading researchers to discuss and present new approaches and new results on the relationships between inequality and macroeconomics and between inequality and globalization. Please direct any questions or comments to [email protected]. 

The “War on Poverty,” and the impact of public policy

In this comment, we explain our objections to the SEC’s current formulation of the Pay Ratio Disclosure Rule on each of three grounds: the erroneous estimation of CEO pay; the unclear specification of the “median” worker; and the risk of normalizing a pay ratio that is far too high. Then we present the latest data on the remuneration of the 500 highest-paid CEOs in the United States, demonstrating the way in which the SEC’s measure of CEO pay that enters into the CEO-to-median-worker pay ratio tends to systematically underestimate actual executive pay.

A trade war would undoubtedly hurt both sides. But there is reason to believe that the US has more to lose. If nothing else, the Chinese seem to know precisely which weapons they have available to them. China could stop purchasing US aircraft, impose an embargo.

Stanford economic historian Professor Gavin Wright, addressing the Institute’s conference on the economics of race, argues that the conditions facing the children of the great migration from the South are very different to the conditions for the children of those who stayed behind. 

Mallaby’s research shows that Greenspan knew more about the looming perils than people realize.

Professor Tchen explores the many layers of “otherness” at work in America’s political economy

Professor Temin sees the US economy as bifurcated along lines analogous to the situation described in developing world economies by W. Arthur Lewis.

Donald Trump’s presidency is a symptom of an interregnum between economic orders – a period that will result in a new balance between state and market. While his administration’s economic policies are unlikely to provide the right answer, they may at least show the world what not to do.

Slight increases in national-average earnings for older workers mask long-run stagnation and decline in Michigan, Ohio, Pennsylvania and Wisconsin – states that unexpectedly voted for Donal Trump

On June 2, 1965, under a mandate established by Title VII of the Civil Rights Act of 1964, the U.S. Congress created the Equal Employment Opportunity Commission (EEOC) to enforce federal anti-discrimination laws related to employment. The expectation was that African Americans would be prime beneficiaries of the EEOC.

Columbia professor Dan O’Flaherty explains how an awareness of racial trauma developed from growing up in Newark inspired him to write and teach on the economics of race.

Economics has a race problem.

Hoping to learn from other countries’ experiences in organizing finance for agriculture, more than 150 Americans were sent abroad in the summer of 1913 to investigate the minutiae of farm-credit systems in and around Europe.

In an Al Jazeera documentary “In Search of the Great American Job”, Institute scholar William Lazonick offers some arch insights into the relationship between financialization — particularly the “shareholder value” ideology in corporations, which drives the transfer of profits to shareholders through stock buybacks — and job creation and inequality.

Economist Darrick Hamilton and Institute President Rob Johnson discuss “stratification economics”, which addresses the failure of orthodox economics to see, explain and point to remedies for persistent racial inequality.

Scholar sees Institute for New Economic Thinking conference as an important opportunity to discuss issues of race and economics, and of Detroit’s past and future 

Historian Prof. Thomas Sugrue offers a critique of the conventional wisdom that roots the city’s fate in the racial tension of the tumultuous ‘60s and the decline of the auto industry.

In this Q-and-A, historian and National Book Award finalist Heather Ann Thompson argues that draconian police tactics in black Detroit neighborhoods had as much to do with the city’s decimation as white flight and lost jobs.

Improvements in data collection create potential for better outcomes for the LGBT community.

Institute for New Economic Thinking President Robert Johnson, in an appearance of the CNN International show Quest Means Business, warns that the anger of Trump’s supporters is unlikely to ebb absent significant economic and political changes — and that this anger could be more successfully marshaled by a more skilled and sophisticated Republican challenger four years from now. 

Theoretical dogmas that are literally blind to the causes of the racism that determines the economic fates of most African-Americans leaves the economics profession unable to comprehend or recognize remedies for a key driver of America’s crippling inequality. Instead, conventional economic models unmindfully shape policies that actually exacerbate racial conflict.

The 2008 financial meltdown wiped out what was left of the savings of millions of American families, but Professor Edward Wolff says decades of income inequality had set the stage for the collapse of their household wealth.

The US stands out as an outlier: the US spends far more on health than any other country, yet the life expectancy of the American population is not longer but actually shorter than in other countries that spend far less.

Oversights of two generations of social scientists have weakened democracy.

Globalisation was once considered a doctrine of salvation - but it has produced too many losers and created a breeding ground for heralds of simplistic truths. It is high time for a new doctrine.

Technology will ruin America if we don’t compensate for its impact, warns Andy Stern.

How Gerald Friedman’s assessment of Bernie Sanders economic proposals prompted a rare public political spat among economists.

Gerald Friedman responds to the Romers on the Sanders Plan.

The Romer/Romer letter to Professor Gerald Friedman marks a turning point. It concedes that there are indeed important issues at stake when evaluating the proposed economic policies of Presidential Candidate Bernie Sanders. These issues go beyond the political debate and should be discussed seriously between and among professional economists.

Bullet-point financial reform proposals are either too simple or too vague.

The tragic crisis in Flint, Michigan, where residents have been poisoned by lead contamination, is not just about drinking water. And it’s not just about Flint. It’s about race and class, and the stark contradiction between the American dream of equal rights and opportunity for all and the American nightmare of metastasizing inequality of wealth and power.

This research project focuses mainly on whether the wealth of the United States middle class recovered and whether wealth inequality continued to rise or moderated over the years 2010 to 2013 following the financial crisis of 2008.

Many Americans have expressed outrage over Pfizer’s plan, through its merger with Allergan, to move its tax home from the United States to Ireland. Now, in a New York Times op-ed, Carl Icahn, the billionaire corporate raider turned hedge fund activist, has joined the chorus. He labels the Pfizer-Allergan deal a “travesty,” blaming the U.S.’s “uncompetitive international tax system.”

Archival artifacts from the history of economics.

This research project investigates the rise of federal credit programs in the United States, leading to a better understanding of the development of federal credit programs.

This research project examines how the spatial pattern of inequality in US cities shapes the provision of public transit and more broadly the prospects for a more equitable and sustainable transportation policy.