Mark Thoma: Links (5/22/19) [feedly]

a collection of recent top articles via Mark Thoma

Links (5/22/19)
https://economistsview.typepad.com/economistsview/2019/05/links-52219.html

 -- via my feedly newsfeed

• Robo-Apocalypse? Not in Your Lifetime - J. Bradford DeLong Not a week goes by without some new report, book, or commentary sounding the alarm about technological unemployment and the "future of work." Yet in considering the threat posed by automation at most levels of the value chain, we should remember that robots cannot do what humans cannot tell them to do.
• The Economy Is Strong. So Why Do So Many Americans Still Feel at Risk? - Jacob Hacker President Trump is running for re-election on the strength of the economy, and why not? The unemployment rate is lower than it's been in five decades. The stock market is booming. Overall economic growth has been steady. There's just one problem: Voters are not particularly enthused about it. Recent polls suggest a substantial majority of Americans feel the economy is working only for "those in power." A big reason for this disconnect is that many Americans feel insecure.
• Origins of "Microeconomics" and "Macroeconomics" - Timothy TaylorEconomists have written about topics that we would now classify under the headings of "microeocnomics" or "macroeconomics" for centuries. But the terms themselves are much more recent, emerging only in the early 1940s. For background, I turn to the entry on "Microeconomics" by Hal R. Varian published in The New Palgrave: A Dictionary of Economics, dating back to the first edition in 1987.
• Yet More Scary Graphs of Manufacturing: Midwest Edition - Econbrowser In every single state in the Great Lakes region, save Michigan, manufacturing employment has either peaked or (charitably) gone on a growth hiatus.
• The rise of corporate market power - Brookings The rise of corporate market power is receiving increasing attention in research and public discourse—including the current U.S. presidential election debate—with good reason. The IMF's April 2019 World Economic Outlook (WEO) has a chapter on the topic, which I had the opportunity to discuss at a recent conference. Author Zia Qureshi Visiting Fellow - Global Economy and Development Increased interest in market power is motivated by some mega trends or puzzles. The "productivity puzzle": Productivity growth has slowed even as new technologies, led by the digital revolution, have boomed. The "investment puzzle": Investment has slowed even as the cost of borrowing has been low and corporate profits high. Sluggish productivity and investment have contributed to slower economic growth. Income and wealth inequalities have risen, sharply in some countries, such as the U.S. Income has shifted from labor to capital, and the distribution of both labor and capital income has become more unequal. Wealth has soared, even though investment in productive capital has slowed. These trends have stoked social discontent and political tumult. What explains these puzzles and trends?
• Strengthening Automatic Stabilizers - Timothy Taylor For economists, "automatic stabilizers" refers to how tax and spending policies adjust without any additional legislative policy or change during economic upturns and downturns--and do so in a way that tends to stabilize the economy. For example, in an economic downturn, a standard macroeconomic prescription is to stimulate the economy with lower taxes and higher spending. But in an economic downturn, taxes fall to some extent automatically, as a result of lower incomes. Government spending rises to some extent automatically, as a result of more people becoming eligible for unemployment insurance, Medicaid, food stamps, and so on. Thus, even before the government undertakes additional discretionary stimulus legislation, the automatic stabilizers are kicking in. Might it be possible to redesign the automatic stabilizers of tax and spending policy in advance so that they would offer a quicker and stronger counterbalance when (not if) the next recession comes?
• Trump Team Vets Fed Critic for Board Seat - The New York Times The Trump administration is vetting Judy Shelton, a conservative economist and former Trump campaign adviser, for a seat on the Federal Reserve Board, according to people familiar with the matter, putting the longtime Fed critic one step closer to a leadership role at an institution she would like to drastically change.
• Audits of Highest-Income Taxpayers Fall Again - Center on Budget and Policy Priorities The IRS reported yesterday that it audited fewer millionaires and large corporations in fiscal year 2018 than the previous year, continuing a multi-year decline. Since 2010, the President and Congress have cut IRS funding substantially, causing workforce reductions and shortages of top auditors who have the expertise to review millionaires' and corporations' complex returns. These budget cuts pose a risk to a basic government function — i.e., collecting the revenue needed to fund public services — because the federal government relies largely on voluntary compliance with the tax code and, for such compliance to continue, taxpayers must trust that the IRS is enforcing the law fairly and people are paying the taxes they owe. As a result, policymakers must reverse their deep IRS funding cuts of recent years and commit to a multi-year effort to rebuild the agency.
• The Economy Is Strong and Inflation Is Low. That's What Worries the Fed. - The New York Times America's job market is booming and the economy is strong, but that combination is not raising prices the way it used to.
• Unconventional monetary policy: A tale of heterogeneity - VoxEU The ECB's unconventional monetary policy package implemented in February 2012 changed collateral requirements. This column examines the effects in the French credit market, using data on corporate loans. Credit indeed increased after the liquidity injection, exclusively driven by supply. There was also strategic risk-taking by a group of banks, an unintentional implication of the policy.