Thanks to a post on Greg Mankiw's blog, I found this great interview article with Daron Acemoglu on inequality, institutions, and economic growth. As you might imagine, he tells the story that institutions like property rights, majority rule and minority rights, etc. are central to the story of growth, more central in his view than geography, health, religion, and so on. But he's very neatly fit it all into a convincing narrative about recent (since 1980) trends in income inequality.
I particularly liked his insight about high marginal tax rates on high earners being a disincentive to engage in (legal and reported) rent-seeking behavior that doesn't really add value. I hadn't heard it before and it makes some amount of sense. Is there a case for marginal tax rates that rise at first, then fall for middle and upper-class earners, and then rise again strongly at the very top? Where exactly in the income distribution would such rent-seeking be most likely?
Friday, December 16, 2011
Monday, December 12, 2011
NPR reports on the experiences of migrant (re)construction workers in New Orleans, who have greatly increased the state's Hispanic population. The only element missing from this case study in reconstruction and immigration is any mention of upward pressure on prices or wages.
Friday, December 2, 2011
A look at the upsides and downsides of the oil boom (associated with the technique called "fracking") from NPR. A doubling of the local population, a sharp turnaround from the long secular decline reported just a few years ago in National Geographic.
Here is the latest from NPR on growth and prices in China, probably written in response to the recent action by the People's Bank of China to reduce the required reserves ratio. The Penn World Table agrees that consumption spending is only maybe 30-40 percent of Chinese GDP, with investment spending at about the same share.