Blog Post

In recent years, productivity growth in developed economies has been stagnating. The most prominent explanations of this trend involve technology. Technological progress is supposed to increase economies’ productivity and potential growth. So what’s going on?

PBS NewsHour asked some of us six questions about the new steel and aluminum tariffs.

Why has the dollar fallen since January 2017? My answer is an economic turnaround in the rest of the world. Also the level of the dollar remains rather high. But Larry Summers has a different answer.

I am honored that John Bogle has commented on my recent column,  "The February Stock Market Correction." In it I repeated my claim that 2017 saw a “bubble” in the #VIX – i.e., a market perception of low risk in US stocks that was unjustified by fundamentals – and I added that the bubble had burst in February. Bogle of course is the genius who made low-cost index #mutualfunds widely available. His comment & my reply are at Barron’s: “Bogle on Bubbles”.

Much has been written about the stock market correction in the time since the US market peaked on January 26 and abruptly fell 10 % (as of February 8, followed by a partial bounce-back). Some of what is said is useful, some is not. Three pronouncements concern advice to investors, the role of machines, and the connection to the real economy.

Congratulations to Ellen Johnson Sirleaf for yesterday winning the Mo Ibrahim Prize for Achievement in African Leadership. She recently retired as President of Liberia. It is for people like her that the award, which pays $5 million, was originally established. I explained and evaluated the Prize, a fascinating experiment, in “The Ibrahim Prize for Excellence Among African Leaders,” published in the African Policy Journal.

It will be tough to fill the shoes of Stan Fischer as Fed vice-chair. The candidates most actively under consideration by the Administration, to serve as number 2 to Jay Powell as Chair, are Rich Clarida, Larry Lindsey, and John Williams.

There are lots of measures of inequality.  If we are interested only in income distribution within the United States, it doesn’t matter much which one we look at:  They all show rising inequality. But when we look at inequality internationally, which measure we look at makes all the difference.

The recent protests in Iran are surely a wakeup call for President Rouhani. To respond the legitimate grievances of low-income Iranian households, the Rouhani government should do its best to further diversify the Iranian economy and to bolster its manufacturing and industrial sectors. The Rouhani government should also promote the export of non-oil products, following the models of countries such as South Korea, Taiwan, and recently, the Chinese leviathan. Labor-intensive industries as well as service sectors like information technology, ought to be solidified. Rouhani should call upon state-directed industrial committees and agencies to provide Iranian entrepreneurs and manufacturers with fiscal resources, and he should foster financial support and protection for firms that place emphasis on exporting goods abroad.

Inequality has been on the rise within the United States and other advanced countries since the 1980s and especially since the turn of the century.  The possibility that trade is responsible for the widening gap between the rich and the rest of the population has of course become a major political preoccupation