Robert J. Gordan’s paper ” Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds” challenges Solow’s theory that economic growth can be a continuous process that will persist indefinitely given productivity increases improvements in resources such as technology. One of the “headwinds” that he identifies is the pleasteau in educational attainment in the United States that hasthe country falling in international ratings of academic success. According to the OECD PISA test results for 37 nations at the secondary level, US is ranked as 21st in reading, 31st in math, and 34th in science.
Month: January 2013
A long-standing quip is that computers are seen everywhere but in the productivity numbers (due to Robert Solow? Dale Jorgenson?). Why?
James Kwak in the Baseline Scenario blog gives a nice example: electronic records in healthcare. Let me quote:
…how can you discuss policy if you can’t count?… Some comics are simply too good to pass up. I’ve seen jokes using the 110% quip,…
There’s a certain fascination with gold; it seems to offer a way to constrain central bankers, at one end of the rules versus discretion debate. Mind you, central banks don’t have a stellar track record. The Federal Reserve raised interest rates during the onset of the Great Depression, surely worsening matters. That’s a core criticism of Milton Friedman and Anna Schwartz in their Monetary History of the United States. So it’s sensible to ask if there’s a viable alternative.
Beyond BRICS, a Financial Times blog, reported today that the black market exchange rate for dollars in Argentina reached an all-time high of US$1.00 = P7.54 pesos. As the article mentions, this black market for dollars surged in 2011 after Cristina Fernandez de Kirchner’s re-election. Once reelected, Mrs. Kirchner approved a ruling that only permitted the official purchase of dollars [by individuals] for holiday reasons. In addition, there is an extra 15% charge on all credit card purchases made abroad. Finally, she banned dollars as a currency to be utilized for savings.
According to a recent NY Times article the United States ended the 2012 year with factory output up and low inflation. This year’s tax increases, aimed to reduce the deficit, may put a damper on consumer spending. However, the NY Times has interpreted the low rate of inflation, which lifted consumer purchasing power, as a signal “that the economy may weather this year’s higher taxes.” Millan Mulraine, an economist at TD Securities, believes that the increase in factory and manufacturing output we have observed at the end of 2012 could be “a reflection of a broader pickup in overall economic activity.”
Ron Paul’s January 15th talk in Washington and Lee’s Lee Chapel was inspiring, exciting, and overall great for the University. Ron Paul is an exciting speaker and it is easy for a crowd of young students to get caught up in his rhetoric and forget about what is actually being applauded. The crowd clapped for his “protect our borders” and “protect our liberty” points. Sandwiched between all of these points was Ron Paul’s assertion that America needs to go back to the gold standard. The natural knee-jerk reaction was for the students to clap. In that moment, I was disappointed that the crowd did not pause in silence.
For the 25th time, Detroit is playing host to to the North American International Auto Show (sometimes referred to as the Detroit Auto Show). The event runs from Janurary 14th-27th and features the unveiling of many of the years’ newest models and technologies. Unfortunately following the Great Recession, many of the Shows lacked enthusiasm and optimism in comparison to pre-Recession levels. Thankfully, the recent successes of the post-Bailout auto industry have led to a much more upbeat event than in years past. Some highlights from the first few days of the Show include the unveiling of the new Corvette Stingray, the new Ford Atlas and Transit concepts, the new Bentley GT Speed Convertible (a personal favorite), the new Hyundai Genesis concept, and the new Lincoln MKC Crossover concept.
…chaos, painful chaos… What would happen if Congress refuses to raise the debt ceiling? The answer is chaos, painful chaos that would have horrific short-term…