CHICAGO: Why did the household savings rate in the United States plummet before the Great Recession? Two of my colleagues at the University of Chicago, Marianne Bertrand and Adair Morse, offer an intriguing answer: growing income (...)
CHICAGO: On a recent visit to Europe, I found economists, journalists, and business people thoroughly frustrated with their politicians. Why, they ask, can't politicians see the abyss that yawns before them, and come together to resolve the euro (...)
CHICAGO: With the world's industrial democracies in crisis, two competing narratives of its sources — and appropriate remedies — are emerging. The first, better-known diagnosis is that demand has collapsed because of high debt accumulated prior to (...)
CHICAGO: It is amazing how the “one percent” epithet, a reference to the top 1 percent of earners, has caught on in the United States and elsewhere in the developed world. In the United States, this 1 percent includes all those with a 2006 household (...)
CHICAGO: Recently, a number of commentators have proposed a sharp, contained bout of inflation as a way to reduce debt and reenergize growth in the United States and the rest of the industrial world. Are they right?
To understand this (...)
CHICAGO: These days, the United States media are full of ordinary Americans venting their rage at the incompetence and immaturity of their politicians. Even though the US government's debt limit was raised in the nick of time, the process was — and (...)
CHICAGO: Now that the dust has settled over the selection of the International Monetary Fund's managing director, the IMF can return to its core business of managing crises. Christine Lagarde, a competent and well-regarded technocrat, will have her (...)
CHICAGO: Economic growth in the United States seems to be slowing again. This might reflect temporary factors, like the Japanese tsunami, which disrupted supply chains and caused some factories to suspend operations. Also, high oil prices have taken (...)
CHICAGO: US President Barack Obama, like many Western leaders nowadays, made improving education one of his main promises to voters during his election campaign. But other domestic issues — health-care reform, budget battles, and high unemployment — (...)
CHICAGO: Democratic governments are not incentivized to take decisions that have short-term costs but produce long-term gains, the typical pattern for any investment. Indeed, in order to make such investments, democracies require either brave (...)
CHICAGO: Carmen Reinhart and Kenneth Rogoff, in their excellent, eponymous book on debt crises, argue that the most dangerous words in any language are “This time is different.” Perhaps the next most dangerous words are “Next time will be (...)
CHICAGO: Economics is all about demand and supply. Typically, the two are equal, and, if not, powerful forces push them towards each other. But, with high and persistent levels of unemployment in the United States, there is a real question about the (...)
KIEL: The new catchphrase in business seems to be “do well by doing good.” In other words, undertaking socially responsible activities boosts profits. For example, Pepsi bolsters its bottom line by shifting to more nutritious, healthier (...)
CHICAGO: World growth is likely to remain subdued over the next few years, with industrial countries struggling to repair household and government balance sheets, and emerging markets weaning themselves off of industrial-country demand. As this (...)
CHICAGO: Global capital is on the move. As ultra-low interest rates in industrial countries send capital around the world searching for higher yields, a number of emerging-market central banks are intervening heavily, buying the foreign-capital (...)
CHICAGO: At its most recent meeting in Toronto this spring, the G-20 agreed to disagree. Even though the world economy is desperately in need of rebalancing, their declaration was deliberately vague enough to accommodate any set of domestic policies (...)
CHICAGO: Even as the world becomes more integrated, the word “security” crops up again and again, as in “food security” or “energy security.” Typically, this means a country creating and controlling production facilities no matter what the cost. (...)
CHICAGO: Before the recent financial crisis, politicians on both sides of the aisle in the United States egged on Fannie Mae and Freddie Mac, the giant government-backed mortgage agencies, to support low-income lending in their constituencies. There (...)
CHICAGO: Monetary and fiscal policies in the United States, both in this recession and the recession of 2001, have been among the most accommodating in the industrial world. As I write, Congress is working on yet another “jobs” bill. Indeed, John (...)