socialist-economics

Dean takes a contrary view, that the surge in imports does not make the GDP report a bad one. Of course, it depends on how one assesses all the causes of the surge, including the Ukraine war, and the not yet ended pandemic. The Surge in Imports and the Drop in GDP: Offloading the Ships Lined Up Offshore Many people were struck by the 1.4 percent drop in GDP in the first quarter, with some reports suggesting this was the beginning of a recession. This is not the real story of the first quarter GDP, instead it looks like growth is continuing at a healthy rate. To understand this point, it is important to recognize how imports are counted in GDP, since the increase in imports subtracted 2.53 percentage points from GDP growth in the quarter.[1] Imagine that the sum of consumption spending, investment, and government spending increased at 2.7 percent annual rate in the quarter (which they did). Now suppose that we offloaded $60 billion of goods from boats sitting offshore, increasing our im...

Understanding the economics of monopsony: How labor markets work under imperfect competition https://equitablegrowth.org/understanding-the-economics-of-monopsony-how-labor-markets-work-under-imperfect-competition/  -- via my feedly newsfeed Contrary to what many of us were taught in Introduction to Economics courses in college and graduate school, markets are rarely perfectly competitive. In the case of the market for labor—a market that, it is worth noting, is fundamentally different from those where financial products or commodities are bought and sold—imperfect competition means that workers' pay is solely determined neither by their productivity nor by the forces of supply and demand. In recent years, rising interest in the causes, consequences, and policy implications of imperfect competition has sparked a new wave of research on a framework known in economics as monopsony. Kate Bahn, the director of labor market policy and chief economist at the Washington Center for Equitabl...