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ResponsiblyIrresponsible
Posts: 12,398
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5/26/2015 2:47:48 PM
Posted: 1 year ago
Good stuff - all videos. The first is Paul Krugman and Robert Solow on income inequality. The second is Paul Krugman, Joe Stiglitz, and Thomas Pikkety on the same thing. The third is Stanley Fischer (Vice Chair of the FOMC), Peter Praet of the ECB, David Lipton of the IMF, Takatoshi Ito from Columbia (only person I haven't heard of, actually).

https://www.youtube.com...

http://livestream.com...

http://blogs.wsj.com...

Yes, I'm using this forum as a repository for interesting links. Don't judge me.
~ResponsiblyIrresponsible

DDO's Economics Messiah
lannan13
Posts: 23,029
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5/26/2015 4:26:27 PM
Posted: 1 year ago
At 5/26/2015 2:47:48 PM, ResponsiblyIrresponsible wrote:
Good stuff - all videos. The first is Paul Krugman and Robert Solow on income inequality. The second is Paul Krugman, Joe Stiglitz, and Thomas Pikkety on the same thing. The third is Stanley Fischer (Vice Chair of the FOMC), Peter Praet of the ECB, David Lipton of the IMF, Takatoshi Ito from Columbia (only person I haven't heard of, actually).

https://www.youtube.com...

http://livestream.com...

http://blogs.wsj.com...

Yes, I'm using this forum as a repository for interesting links. Don't judge me.

God, don't tell me you're going OWS on me.
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If the sky's the limit then why do we have footprints on the Moon? I'm shooting my aspirations for the stars.

"If you are going through hell, keep going." "Sir Winston Churchill

"No one can make you feel inferior without your consent." "Eleanor Roosevelt

Topics I want to debate. (http://tinyurl.com...)
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ResponsiblyIrresponsible
Posts: 12,398
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5/26/2015 4:27:15 PM
Posted: 1 year ago
At 5/26/2015 4:26:27 PM, lannan13 wrote:
At 5/26/2015 2:47:48 PM, ResponsiblyIrresponsible wrote:
Good stuff - all videos. The first is Paul Krugman and Robert Solow on income inequality. The second is Paul Krugman, Joe Stiglitz, and Thomas Pikkety on the same thing. The third is Stanley Fischer (Vice Chair of the FOMC), Peter Praet of the ECB, David Lipton of the IMF, Takatoshi Ito from Columbia (only person I haven't heard of, actually).

https://www.youtube.com...

http://livestream.com...

http://blogs.wsj.com...

Yes, I'm using this forum as a repository for interesting links. Don't judge me.

God, don't tell me you're going OWS on me.

I don't need to go OWS to think that income inequality is an important issue, as I do, and the third link is on monetary policy.
~ResponsiblyIrresponsible

DDO's Economics Messiah
lannan13
Posts: 23,029
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5/26/2015 4:29:03 PM
Posted: 1 year ago
At 5/26/2015 4:27:15 PM, ResponsiblyIrresponsible wrote:
At 5/26/2015 4:26:27 PM, lannan13 wrote:
At 5/26/2015 2:47:48 PM, ResponsiblyIrresponsible wrote:
Good stuff - all videos. The first is Paul Krugman and Robert Solow on income inequality. The second is Paul Krugman, Joe Stiglitz, and Thomas Pikkety on the same thing. The third is Stanley Fischer (Vice Chair of the FOMC), Peter Praet of the ECB, David Lipton of the IMF, Takatoshi Ito from Columbia (only person I haven't heard of, actually).

https://www.youtube.com...

http://livestream.com...

http://blogs.wsj.com...

Yes, I'm using this forum as a repository for interesting links. Don't judge me.

God, don't tell me you're going OWS on me.

I don't need to go OWS to think that income inequality is an important issue, as I do, and the third link is on monetary policy.

It's not that big of an issue. There are more important things out there. We do need to fix our economy, but only do that of Milton Friedman will we become great and return to a bull market economy. If we go down the OWS route like Obama, Alinksy, and Hilary want, we're doomed.
-~-~-~-~-~-~-~-Lannan13'S SIGNATURE-~-~-~-~-~-~-~-

If the sky's the limit then why do we have footprints on the Moon? I'm shooting my aspirations for the stars.

"If you are going through hell, keep going." "Sir Winston Churchill

"No one can make you feel inferior without your consent." "Eleanor Roosevelt

Topics I want to debate. (http://tinyurl.com...)
-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~-~
ResponsiblyIrresponsible
Posts: 12,398
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5/26/2015 6:49:38 PM
Posted: 1 year ago
At 5/26/2015 4:29:03 PM, lannan13 wrote:
It's not that big of an issue. There are more important things out there. We do need to fix our economy, but only do that of Milton Friedman will we become great and return to a bull market economy. If we go down the OWS route like Obama, Alinksy, and Hilary want, we're doomed.

But it is a big issue - in fact, it's inextricably linked to "fixing the economy," though obviously a riding tide need not lift all boats.

Granted, I get frustrated when people, like Robert Reich, make an argument so utterly facile as "income inequality reduces consumption, and thus induces a more protracted recovery." It does happen to be true that poor people consume more of their income than rich people do of theirs, and most recessions involve shocks to AD, not to AS, so it doesn't make much sense to shift the AS curve at the expense of the AD curve - i.e., wage flexibility at zero nominal interest rates such that the paradox of flexibility takes hold, we end up with an upward sloping demand curve - yes, there's actually a model where rightward movements in supply *reduce* output. But rich people could generate enough consumption, or better yet enough investment to ameliorate the entire recession if they so choose. Heck, "animal spirits" - which a formal NGDP-level target or other such monetary stimulus would rightly induce - could in fact be sufficient, but it's a psychological guessing game: how do we make people feel well enough to spend, investors feel well enough to invest, or banks fell well enough to lend?

And that brings us to a very complicated issue that Larry Summers from Harvard has written extensively about: secular stagnation. It builds on Keynes's idea that recessions induce an increased desire to save a decreased desire to invest, so we're effectively facing a glut of savings - and, mind you, that's true on a global scale, with Germany posing the best possible example. The problem, of course, is how do we get markets to clear? Well, we reduce interest rates, or hope that they'll gravitate toward the Wicksellian equilibrium real rate by themselves.

But, one key problem - and income inequality is not the sole cause of this, but it's a very significant cause: because of the massive upward movement of income to the top over the past three decades, the Wicksellian real interest rate is far lower than it would've been otherwise, and is likely there permanently, barring structural reform that increases labor force growth, ameliorates the wealth gap, addresses the long-term unemployed in an effort to boost productivity, etc. - though that's, to a large extent, an LRAS issue.

So the problem is that insufficient demand, and the fact that current conventional policy tool cannot achieve that level of demand. Mind you, it wouldn't be hard to do so with a credible regime change, but this is one of the many ways - and Joe Stiglitz highlights several others - that income inequality is in fact restraining the recovery.

Also, there's a new OECD study finding that reducing the income gap would in fact increase growth. Here's a nice summary of it: http://blogs.wsj.com...
~ResponsiblyIrresponsible

DDO's Economics Messiah