Author Archives: Menzie Chinn

Labor Market Interventions and Learning from Other Countries

As documented in Box 1-2 in the IMF’s latest World Economic Outlook, unemployment in the advanced economies remained persistently high. That brings to the fore how to best deal with adjusting the labor force so as to bring down structural unemployment (although obviously higher aggregate demand would help). In my view, there is the “are there no poorhouses?” approach (cut unemployment benefits, etc. and thus reduce the natural rate of unemployment). The other is to use evidence-based approaches to improve the labor force quality, and improve job matching, thereby decreasing structural unemployment. This alternative is discussed in a recent La Follette Policy Report, by Robert Haveman, Carolyn Heinrich, and Timothy Smeeding, entitled “Policy Responses to the Recent
Poor Performance of the U.S. Labor Market”:

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The current recovery in historical context

Or why Ed Lazear should have heeded R&R a bit more.

From “Credit: A Starring Role in the Downturn,” by Òscar Jordà, based on an examination of 14 advanced economies over 140 years:

We are unlikely to learn how the United States will recover from the Great Recession by examining other post-World War II downturns. In the United States, the past six decades have completely lacked another financial event like the one experienced from 2007 to 2009. …

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Some Implications of the Trade Release

So-so news, and how we can sustain net export growth

 

From BEA/Census:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of
Commerce, announced today that total February exports of $181.2 billion and imports of $227.2
billion resulted in a goods and services deficit of $46.0 billion, down from $52.5 billion in
January, revised. February exports were $0.2 billion more than January exports of $180.9 billion.
February imports were $6.3 billion less than January imports of $233.4 billion.

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