Labor

The Institute for New Economic Thinking held its sixth Annual Conference from April 8 to April 11, 2015, in collaboration with the Organization for Economic Cooperation and Development (OECD) in Paris.

Thomas Piketty and Joseph E. Stiglitz discuss the causes of, consequences of, and remedies for inequality.

The ongoing explosion of the incomes of the richest households and the erosion of middle-class employment opportunities for most of the rest have become integrally related in the now-normal operation of the U.S. economy.

How can we better protect Main Street from the externalities of Wall Street?

The objective of this proposal is to build distributional statistics of income and wealth consistent with national accounts aggregates for the United States.

This research project deepens our understanding of labor market conditions during the Great Depression by assemling data at the national, state, and industry level for jobs created, jobs destroyed, unemployment, employment, and the labor force.

There is widespread and growing concern about the availability of good jobs in the U.S. economy. Inequality has been growing for thirty years and is now at levels not seen since the 1920s. Stable and remunerative employment has become harder for U.S. workers to find.

The paper referenced in this post, “Financialization and U.S. Income Inequality, 1970–2008,” recently was awarded the 2014 Outstanding Article Award from the Inequality, Poverty, and Mobility section of the American Sociological Association.

This paper is based on a social accounting matrix (SAM) which incorporates the size distribution of income based on data from the BEA national accounts, the widely discussed 2012 CBO distribution study, and BLS consumer surveys.

In late 2007, the United States started feeling the effects of the Great Recession. And over the ensuing two years the economic disaster spread across the globe.

In the United States achieving equal opportunity in postsecondary education is typically described in terms of enrolling more underrepresented groups into the selective colleges. The belief is that if this step is accomplished it will have a fundamental impact on the problem of inequality at the national level. However, what if there are not enough places in selective colleges to accomplish this goal? What if the selective colleges do not have enough capacity to make a significant impact in the problem of serving students from underrepresented groups withdemonstrated high abilities?

The term human capital describes a set of skills, strengths and know-how that are valuable—both in the narrow sense of being “commercially valuable” (Lindsey, 2013), and the wider one of contributing to a flourishing, deliberate, purposeful life.As Heckman (2014) puts it: “Skills are capacities to act [emphasis added]…They shapeexpectations, constraints, and information” (p. 6).

What is “capital”? To Karl Marx, it was a social, political, and legal category—the means of control of the means of production by the dominant class. Capital could be money, it could be machines; it could be fixed and it could be variable. But the essence of capital was neither physical nor financial. It was the power that capital gave to capitalists, namely the authority to make decisions and to extract surplus from the worker.

Owing to its strong dependence on exports, Germany was among the economies hit hardest by the financial crisis.

We are not “all in it together.”

This paper analyzes equilibrium, dynamics, and optimal decisions on the factor bias of innovation in a model of induced innovation.

Germany’s economic policies are under attack from all sides.

In our two papers, we analyze how changes in personal and functional (wages versus profits) income distribution interact to produce different macroeconomic outcomes in different countries. On the basis of a stock-flow consistent model calibrated for the United States, Germany, and China, simulations suggest that a substantial part of the increase in household debt and the decrease in the current account in the United States since the early 1980s can be explained by the interplay of rising (top-end) household income inequality and certain institutions (e.g. easy access to credit, privately financed education and health care systems).

“You are now leaving the world as you know it.”

Every nation faces the challenge of imagining what a good life means. Sound nutrition, shelter, health care, personal safety, social stability, security of savings, clean air and water, and the development of children are among the elements of what many envision as vital to a happy and healthy society.

The battle for a living wage for the nation’s poorest workers is set against the backdrop of mass unemployment and the highest level of economic inequality in the U.S. in almost a century.

A review of The Entrepreneurial State: Debunking Public vs. Private Sector Myths, the new book by Mariana Mazzucato

A minimum wage is a small minnow in an ocean of deficient aggregate demand

There are a number of possible purposes in assessing the level of economic development of a country or part of a country. The assessment may provide an incentive for better development, particularly if it can be compared meaningfully with assessments for other countries.

This research project analyzes the determinants of wage share, taking account of country-specific institutional aspects, in order to contribute to the theory of distribution, combining insights from political economy, institutional economics, and industrial relations.

What do you get when you put two of the most well known and most widely cited economists in the world, both Nobel laureates, on stage together? A healthy dose of economic reality.

Elephant seals have got too big for their beaches. A large specimen might weigh over 8000 lbs (3700 kg).Their size has a simple evolutionary explanation. Large males fight for the right to mate with a whole beach full of females. For elephant seals it is, quite literally, winner-takes-all. And the key to winning is simple – size.

We have grown accustomed to regulating financial markets based on imagined, not real markets. Real markets are shaped by and co-evolve with institutional arrangements within two fundamental constraints: Imperfect knowledge and the threat of illiquidity.

The financial sector can support growth but it can also cause crisis. The present crisis has exposedgaps in economists’ understanding of this dual potential.

Many feel that due to its size and scale the financial system has become a burden on society rather than a servant to it. What are the key elements of a productive financial sector?

“Natural rate theory” has dominated interpretations of economic trends and policy prescriptions over many decades. European-type welfare state institution were claimed to cause a compressed wage distribution that distorts otherwise well functioning labor markets.

Inequality has been growing and destabilizing confidence in many countries in recent years.

Three major crises are confronting the world. The first is the increasing and uneven burden of humans on the biosphere, and the observation that we have already surpassed the ‘safe operating space’ for humanity with respect to three planetary boundaries: climate change, the nitrogen cycle and biodiversity loss.

In the last few years the impact of income distribution on macroeconomic dynamics has received growing academic attention.

How can we distribute growth globally when the developed world needs growth to emerge from debt overhangs and inequality between nations is still quite formidable?

Long periods of unequal incomes spur borrowing from the rich, increasing the risk of major economic crises

Higher income inequality in developed countries is associated with higher domestic and foreign indebtedness

Does greater inequality produce more fragile economic dynamics? Does concentration of wealth and income make societies more prone to crisis? If so, why?

Inequality did not increase during the early stages of economic development in Japan and the East Asian Tigers. But in India and China it did. Why is that?

This paper describes the broad evolution of inequality in the world economy over the past four decades, and provides a summary account of the relationship between inequality, economic development, political regimes and the functional distribution of income.