Transcript Economic Progress & Human Wellbeing

As Time Goes By;
History and Economics
Gavin Wright
25th Summer Economics Institute
July 30, 2012
25 Years of Summer Economics
1. 1988
2. 1989
3. 1990
4. 1991
5. 1992
6. 1993
7. 1994
8. 1995
9. 1996
10.1997
Joint meeting (International)
Participating in the Economy
Participating in Financial Markets
Technology and the Economy
Economic Growth: World Perspective
Economic Agenda for the Nation
Economic Agenda for California
?
Economic Issues in Pres. Election
Economics of Creative Destruction
11. 1998 The American Economic Miracle
12. 1999 ?
13. 2000 The New Economy?
14. 2001 Global Challenges Facing U.S. Economy
15. 2002 Competition in the American Economy
16. 2003 Global Economic Developments
17. 2004 Economic Wellbeing in America
18. 2005 Economic Growth in 21st Century
19. 2006 Participating in Economic Prosperity
20. 2007 Health, Health Policy, & Economics
21. 2008
22. 2009
23. 2010
24. 2011
25. 2012
Economic Policies in Pres. Election
American Economy Under Stress
Behavioral Economics & Others
Economics for the Long Run
Looking Forward & Looking Back
Looking Back, Looking Ahead:
Keynes (1930)
Economic Possibilities for Our Grandchildren
In the long run mankind is solving its
economic problem. I would predict that the
standard of life in progressive countries one
hundred years hence will be between four
and eight times as high as it is to-day… It
would not be foolish to contemplate the
possibility of afar greater progress still.
Keynes: Implications of LongRun Growth
Thus for the first time since his creation man
will be faced with his real, his permanent
problem – how to use his freedom from
pressing economic cares, how to occupy the
leisure, which science and compound
interest will have won for him, to live wisely
and agreeably and well.
Acemoglu’s Ten Trends
1. The Rights Revolution
Democracy and Civil Rights
2. The Sweep of Technology
“Directed technological change?”
3. Unrelenting Growth
4. Uneven Growth
Rising Disparities (between nations & within)
5. Transformation of Work and Wages
Democracy Around the World
1976 Portugal
1978 Spain
1983 Argentina
1985 Brazil
1988 Korea
1990 Chile
1990 Poland
1990 Hungary
1994 South Africa
1996 Ghana
1997 Mexico
1999 Indonesia
1999 Nigeria
2005 Liberia
2011 Tunisia
2012 Egypt
6. The Health Revolution
Convergence in Life Expectancy
7. Technology without Borders
Globalization: Trade & Knowledge
8. Century of War, Century of Peace
Cf. Steven Pinker, Better Angels (2011)
9. Counter-Enlightenment in Politics
Rise of religious activism
10. Population Explosion, Resources and
the Environment
Trade/GDP
Deaths/100,000
Homicides/100,000
Traffic Deaths
Acemoglu Synthesis:
Spread of Inclusive over
Extractive Institutions
Inclusive institutions: Broadly-based
opportunities and rights, pluralistic politics
Technological change, growth, better
health, decline in violence
But also population growth and threats to
environment
Rising College Premium
Economists’ Views on Rising
Inequality
•
•
•
•
•
•
Technology (SBTC)
45%
International Trade
12%
Fall in Real Min Wage 9%
Fall in Unionization
8%
Rising Immigration
6%
Other
14%
The Very Top: Market Forces?
The Top 1%:
Winner-Take-All Markets
• Market for Superstars:
– Athletes & Entertainers
• Elite Personal-Service Positions:
– Lawyers, Investment Bankers
• CEOs (two rival theories)
– Opening the Market
– Collusion with the board
• Not plausibly explained by tech/skill “bias”
Lawyers!
Top-Half & Bottom-Half
Inequality
Polarization after 1990
Surge in IT Investments
Computers and Skills
• Autor et al Polarization thesis:
• Computers substitute for routine cognitive
and manual tasks
• But not for
– “abstract reasoning tasks” (problemsolving, coordination)
– Nonroutine manual tasks (truck drivers,
waiters, janitors)
=> “hollowing out” of wage distribution
Stagnation in Schooling
Rising College Tuition
Polarization Overstated:
Prominent Middle-Skill Jobs
• Construction
– Inspectors, Electricians, Plumbers
• Healthcare Support
– Dental Hygienists, Technicians, Therapists,
Diagnostic Sonographers
• Law
– Detectives/Investigators, Paralegals
• Protective Services
[Holzer & Lerman, “The Future of Middle-Skill
Jobs” (Brookings 2009)]
Employment Shares by
Occupational Skill, 1986 & 2006
Returns to Additional Schooling
Male vs. Female
Murray, Coming Apart (2012)
The New Class Segregation
Lifestyle Choices:
diet (obesity), culture, intense parenting
residential separation
The College Sorting Machine
Dominance of Upper Middle-Class
The Perpetuator: Homogamy
Economic Base: Market Value of Brains
Reading Test Score Gaps (by Birth Year)
High vs. Low Income Students
1940
1970
2000
Black vs. White Students
Moretti, New Geography of Jobs
“Great Divergence” in metro areas based on
% College Grads in Population
Agglomeration Economies
Thick Labor Markets
Specialized Service Providers
Knowledge Spillovers
Universities as Engines of Growth
Medical Schools & hospitals
Salaries of High School Graduates
and % College Graduates
Paradox
Rising globalization intensifies localization