... is, they have essentially assumed the expectations hypothesis. Assessing the variability as well as the level of the term premium, and the relationship between the term premium andthe macroeconomy, ... been the close feedback between the real economy and financial conditions. In many countries, the credit and housing boom that preceded the crisis went hand in hand with strong spending and production. ... seems likely that the recent financial and economic crisis the Great Panic and Recession of 2008 and 2009—will both rearrange the economic landscape and affect the focus of economic and financial research...
... but also by the quantity and quality of the labor force. The indicators of the quantity and quality of the labor force include the change in the proportion of the population in their prime-age ... Source: Piketty and Saez. Note: The vertical axis is the share of total income. The observed relationship between the top tax rates andthe income share of the top 0.1% andthe top 0.1% are ... of the top 0.1% (the top solid line in the figure) andthe top 0.01% (the lower dashed line) since 1945.32 Under both definitions of the top of the income distribution (i.e., the rich), the...
... the Netherlands, the Nordic countries, Poland and the United Kingdom), while playing only a minor role in others (e.g. Hungary,Luxembourg, Portugal and Switzerland). Across the OECD, there are ... common in other OECD countries,such as in the Netherlands andthe United Kingdom, although they generally constituted a muchsmaller share of the loan pool than in the United States.8. The analysis ... observed in the United Kingdom andthe Netherlands – in these two countries the responsiveness of newhousing supply to housing prices is noticeably low (Figure 4.1). By contrast, other countrieswhere...
... York. Immigrants in theEconomy extends the same question to the 25 largest metro areas of the United States.Immigrants andtheEconomy was undertaken with the support of 32BJ of the Service Employees ... growth andthe growth of the immigrant workforce that is evident in the country’s largest 25 metropoli-tan areas applies to the five largest metro areas in the East: theeconomyandthe immigrant ... Taken together, this data illustrates the close and consis-tent relationship between the immigrant share of popu-lation andthe contribution that immigrants make to the economy. Just a handful...
... displays the trend in the income (before taxes) share of the top 0.1% (the top solid line in the figure) andthe top 0.01% (the lower 39 CRS analysis of the data contained in the 1996 and 2006 ... but also by the quantity and quality of the labor force. The indicators of the quantity and quality of the labor force include the change in the proportion of the population of the population ... Source: Piketty and Saez. Note: The vertical axis is the share of total income. The observed relationship between the top tax rates andthe income share of the top 0.1% andthe top 0.01% are...
... connected. For the greater the taxes and disbursements, the greater the gain of the one andthe loss of the other, and vice versa . . . .6 “Ruling” and “ruled” apply also to the forms of government ... 2. DD and SS are the demand and supply curves respectively. OC is the control price and FP the market equilibrium price. At OC, the quantitydemanded is less than the quantity supplied, by the ... Rothbard48prices, these are determined by the supply of andthe demand for money. For the array of prices to rise, there must be an increase in the supply of money, adecrease in the schedule of the demand...
... littlemorebrightly.Theseare the employeesof the automakerbeingrefreshedwithnewlight.Anothertransferofwealthhastakenplace. The autoworkersinturnmakepurchasesfromotherbusiness,small and large, andthe lightcontin-uestoparadethrough the tunnel.We also know that behind the walls of the tunnelthere are more businesses and interconnections ... way“takingover.”There is little attention given to the moremundane and immediatethreatsto the jobmarket andthe overall economy. Perhaps the technologists just assumethat once the ... tunnel. While these businesses ob-viouslydon’tcaterdirectlyto the globalmassmarket,theyarenone-thelessintegratedinto the activitythatoccursin the tunnel, and theyare heavily...
... mayhaveactuallyin-creasedforatime,astheywereabletolowertheirprices.Asaresult,theirprofits, and therefore the wealthoftheirtopemployees and shareholdersincreased.Thesewere the brighterlightsin the tunnelthatinitiallybecamestronger.However,asnearlyallbusinessesin the tunnelcontinuedtoautomatejobs,atsomepoint the decreasein the num-berofpotentialcustomersbeganto ... on the seconddayyouhavetwocents and thenfourcentson the thirdday, and soon. The firstcharton the nextpageshows the firstfifteendaysasourpennydoubles.Youcanseethatwestartoutvery slowly and then ... aregrowingdark.Nowweseethatmanyof the verybrightestlightsin the tunnelfinallyfeel the impact and alsobegintolosetheirlight. The ownersof the businessesin the tunnelareseeingmuchoftheirwealthgraduallydrainaway. The ...
... madeevenmorechallengingby the factthat the objectscouldbeinmanypossibleorientationsorconfigurations.Consider the simplecaseofapairofsunglassessittingonatable. The sunglassesmightbeclosedwith the lensesfacingdown,orwith the lensesup.Orperhaps the glassesareopen with the lenses oriented vertically. Or maybe one side of the glassesisopen andthe other closed. And, ofcourse, the glassescouldberotatedinanydirection. And perhapstheyare ... securitieswerethensoldtobanks and financialinstitutionsallover the world,with the understandingthattheywereverylowriskinvestments.When the subprimeborrowersstarteddefaulting, the valueof the mortgage-backed securitiesplunged, andthe derivativesdidnotworkasexpected.Inmanycasesitwasdifficultorimpossibletocalculatetheirvalue.Inaddition,financialinstitutionshadengagedinmanyothercomplexinterrelationships ... morepopular.Whatwillwedoifsomedayasubstantialpercen-tageof the three and ahalfmillioncashiersin the U.S.nolongerhavejobs?Whatadditionaleducation and trainingcanweoffertheseworkers? And whatjobswoulditpre-parethemfor? And what is the impact of thatpotential unemploy-mentonmarketdemandforgoods and services?Cashiersaregenerallynothighlypaid,buttheynonethelessexistaslightsinourmassmarkettunnel.Cashiers,justlikeotherworkers,drivecars,buyclothes and consumerelectronics,rent...
... demand will in-crease, andtheeconomy will therefore produce moregoods and services.Inotherwords, the samenumberofworkerswillbeemployedbuttheywillproducemore.32 The ... collating and faxing in-formation. The intellectualportionof the job—eitherap-provingordenying the loan—isprobablyalreadyessential-lyhandledbyacomputer.Throughout the economy, there*Formoreonrobotics and itspotentialimpactonemployment and on ... Germany,in-storeretailsales and customerassistanceisbeingauto-matedviaacell-phoneinterface.Shoppersareabletogetrealtimeassistance,whileshopping,throughtheirmobilephones.Theycanalsoscanbarcodesastheyshop and, in the nearfuture,willbeabletopayfortheirpurchasesdi-rectly through their phones—presumably avoiding the checkoutislealtogether. The specterofnearfullyautomatedsupermarkets and chainretailstoresiscauseforgenuineconcern.Thesearenow the jobsoflastresort.Theseare the jobsthatworkersdisplacedfromotherindustriestakebecausethereisnoth-ingbetteravailable.Lookbackat the tableonpage59.Wehavealreadymentionedthat3.5millioncashiersarepoten-tiallyatrisk. The tableshowsanother4millionretailsales-persons and 2.3millionlaborers and freight,stock and ma-terialmovers,aswellas1.7millionstockclerks and orderfillers.Whatnewjobscouldwepossiblyfindforallthesepeople?Readanyarticlein the popularpressabout the fieldofrobotics and itspotentialfutureimplications, and youwillalmostinvariablyfindasentencepointingoutthat“in the future,...
... within their capabilities, then how willthey acquire the income necessary to create the demandthatinturndrivesproduction?Ifweconsider the singular-ityinthiscontext,thenisitreallysomethingthatwillnec-essarilypushusforwardexponentially?Orcoulditinac-tualityleadtorapideconomicdecline?** The technologistswhospeculateabout the singularitydon’tseemtooconcerned ... shouldersofAmerican and Europeanconsumers. And aswehavenotedagain and againinthisbook,thoseWesternconsumersalldependonjobs.Ifautomationbe-ginstodramaticallyimpactemploymentinChina,whileat the sametimedemanddwindlesin the West and certain-lyif the catastrophiceventdescribed at the beginning ofthischapteroccurs—thenthiseconomicperpetualmotionmachineisgoingtocollapse.Givenallthis,whatcanwereallysayabout the futureofChina?Nearlyafourthof the world’spopulationlivesinChina;therefore,thereisnodoubtthatthiscountrywillcontinuetohavesignificant, and perhapsincreasing,influ-encein the decadestocome.However,simplyextrapolat-ingcurrenttrendsisveryunlikelytogiveanaccuratepro-jection.Chinaisgoingtobeheavilyimpactedbyaccelerat-ing ... purchasing the goods they are producing. Oreveniftheycanaffordtobuythoseproducts,theyareun-likelytodo sobecausetheyaremuchmoreinterestedin THE LIGHTS IN THE TUNNEL...
... todecline.Rememberthatwearetalkinghereaboutaverageworkers.Toget the graphabove,youmighttake the dis-tributionofincomesin the UnitedStates and thenelimi-nateboth the richest andthe poorestpeople.Thengraph the averageincomeof the remaining“typical”people (the bulk of consumers) ... byindustries,productionbecomesmoreefficient.Thisresultsinsomelossofjobs,butitalsoresultsinlowerpricesforgoods and services.Inotherwords,itputsmoremoneyinconsumers’ pockets. These consumers then go out and buyallkindsof things, and so the resultisincreasedde-mandfor the productsproducedbyalltypesofindustries.Some ... itundermines the mass market. That is a reality that ulti-matelywillaffect everyone andthe corporate CEOsof the future are going to find themselves on the frontlinewhen the wavehits.Currently,businessesin the UnitedStatescandeductall...
... elimi-nates the jobsthatprovideincometoconsumers. The es-sentialideaisthatweshouldimposesomecombinationofaconsumptiontax and/ oraspecialdirecttaxonbusinessthatcaptures the incomewhich,inanon-automatedecon-omy,wouldbepaidoutinwages.Overtime,as the wagespaidtoaverageworkersdecrease(asapercentageofreve-nue),thesetaxeswouldbegraduallyincreasedtorecaptureatleastaportionofthisincome. The overallobjectiveistorecapturejust the optimalamountofincome and thengetitinto the handsofconsumerssothattherewillbesuffi-cientconsumerdemandtocontinuedriving the economy. Once the income ... unless there is either existing market de-mandor the reasonableexpectationofsuchdemandin the foreseeablefuture. The idea that productionrespondstodemandisoneof the definingcharacteristicsofcapitalism.Removing ... corruptionamongofficialsin the country.Thesepeopleveryoftenactprimarilyfortheirownbenefit and, inparticular,inwaysthat preserve theirpositions and power—rather thanfor the benefitoftheircountryasawhole.In the finalanaly-sis,...
... havestrongeducations and training.Thesepeoplearebeneficia-riesof the informationage.On the toxicwastelandsideof the fence, are relatively unskilled workers. These people THE LIGHTS IN THE ... Amazonhavebeenheavilyimpactedbybothtechnology and globa-lization.Theyoftensurvivebystringingtwoorthreeparttimejobstogetherorworkinlowwagejobswithfewben-efits. The obvioussolutionisforustofindawaytoofferthesepeopleadditionaltraining—sotheycanhopoverto the goodsideof the fence.Ithinkthat the problemwiththisscenarioisthat the fenceisgoingtomove, and itmaymoveveryrapidly. The goodsideof the fenceisgoingtocontract, and increasingnum-bersofwell-educatedworkersaregoingtofindthemselvessuddenlyon the toxicside.AsIpointedoutinChapter2,we ... Light The natural cycle in the tunnel is stable and reinforcing. The vast majority of the consumers in the tunnel nowglowwithapredominantlygreenlight.Astimepasses, the collectiveintensityof the lightscontinuestograduallyin-crease.Suddenly,...
... acentrallyplanned economy, and perhaps most chillingly, the overthrow of govern-ments and a“dictatorshipof the proletariat.”In the wakeof the collapse of communism, these ideas ... Amazonmanjudge. The otherparticipantsareanotherperson and amachine—bothofwhomattempttoconvince the judgethattheyarehumanbyconductinganormalconversation.If the judgecan’ttellwhichparticipantiswhich,then the machineissaidtohavepassed the TuringTest. The TuringTestisperhaps the mostwell-known and acceptedmethodformeasuringtruemachineintelligence.Inpractice, the ruleswouldneedtobefurtherrefined, and it ... great many of the moreroutinejobsin the economy. WhilenarrowAIisincreasinglydeployedtosolverealworldproblems and attractsmostof the currentcommer-cialinterest, the HolyGrailofartificial...