Archive for April 13th, 2011

In case you thought Great Depression was all doom…

April 13, 2011

Atleast this blog thought so. But economists never cease to amaze you really.

Economix blog points to this interview of Alexander J. Field of Santa Clara University. He says the 1930s decades was the most technologically progressive decade of the century!

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Inequality may lead to lower growth

April 13, 2011

One of the many interesting debates on India economy is role of inequality. Some say it has risen with others saying it has lowered thanks to high growth in last 7-8 years. While others say inequality is a natural outcome of a high growth process where it is survival of the fittest. So the well-educated and healthy get maximum advantage. This does not mean the growth process is wrong but state needs to work on the education, health care etc so that opportunities are shared by all.

The debate now is not limited to India (and other Emerging econs). It is a major issue in US as well with Raghu Rajan showing how inequality is one of the major causes of the crisis. This has led to some exciting debate in US as well amidst Tyler Cowen and all. Earlier research by Emmanuel Saez showed how inequality has been rising in US but was not really looked into. Now one is seeing some regular research flowing into the topic.

IMF economists in this paper look at this inequality and growth linkage. They say countries which are more unequal find it difficult to sustain growth. To put it other way, countries which manage to lower inequality tend to grow for a longer time.

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Shiller on how should the financial crisis change teaching economics?

April 13, 2011

Apart from this excellent paper on returning economics to worldly philosophical ways, here is another nice paper from Robert Shiller. This one is on how economics teaching should change after the crisis.

The overall message is the same – economics needs to be taught with other fields as well. And then knowing economic history is so important. He also discusses crisis in economic research and says more important is to tell students what we don’t know:

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A review of measuring inflation expectations

April 13, 2011

Simon Potter of NY Fed has a nice speech on the one of the hot topics in global economy – inflation expectations.

He discusses the two methods of inflation measures – from market instruments and survey based. There are divergences but overall the estimates suggest the expectations are anchored as of now (again many economists differ on this).

More importantly he discusses how NY Fed is trying to improve these measures especially surveys:

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