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Better Permitting and More Building: Possible? - Conversable Economist
It seems natural enough, at least based on US experience, to believe that building and permitting are in a natural opposition: that is, stronger permitting means less building. Zachary Liscow has been looking for a way out of this opposition. He spells out some of his thoughts in "Reforming Permitting to Build Infrastructure" (Hutchins Center
Predistribution, Not Redistribution, in the Nordic Countries - Conversable Economist
Maybe it's just because I live in Minnesota, a state where the differences between immigrants from Sweden, Norway, and Finland are still apparent in the names of towns and the surnames of people. But when I run into people who would prefer that the US distribution of income be more equal, they often point to
US Income Inequality Before Taxes and (Many) Transfers: Census Data - Conversable Economist
Each year, the US Census Bureau publishes three overview reports to update the annual data on income, poverty rates, and health insurance. Here, I focus on some figures from Income in the United States: 2024, by Melissa Kollar and Zach Scherer (September 2025, P60-286). Here's a figure showing several measures of pre-tax income inequality. It's
EU Productivity and Lack of Integration - Conversable Economist
Economic growth and productivity growth across the nations of the European Union has been lagging the US economy. What are the reasons and what might be done? A group of essays in the June 2025 issue of Finance & Development offers some insights. A common theme is that EU economic integration has not proceeded as
Interview with Dean Karlan: US Government Foreign Aid - Conversable Economist
Back in November 2022, Dean Karlan took the job as the first "chief economist" for USAID. In that position, he had a staff of about 30 whose task was to figure out the benefits and costs of different aid programs, with the goal over time of refocusing aid on problems and situations where the payoff
What Do Managers Do? - Conversable Economist
Economists have been thinking for a long time about the operation of buying and selling in markets. However, they have traditionally spent less time studying what happens inside a firm--a setting in which forces of supply and demand are replaced by managerial decision-making. Anyone who has had both a good boss and bad boss knows
ICYMI: Journal of Economic Perspectives Summer Issue Free Online - Conversable Economist
In the old days of publishing the Journal of Economic Perspectives on paper--like last year--I didn't worry about publishing an issue in August. Even if potentially interested readers were on vacation or away from the office, I figured that the physical paper copy of the journal would hang around in their mailbox, or perhaps in
Crypto, Stablecoins, and the Rise of Tokenization - Conversable Economist
Bitcoin and cryptocurrencies in general are no longer the bright shiny new thing. The Journal of Economic Perspectives, where I work as Managing Editor, was describing and discussing the crypto world a decade ago. What happened to all those predictions that Bitcoin would rapidly displace existing currencies? In "Crypto, tokenisation, and the future of payments."
Why Do Americans Work So Many Hours? - Conversable Economist
Compared to workers in most other high-income countries, Americans tend to work more hours per year. Here's a figure from the OECD, which is based on taking the total number of hours worked in an economy and dividing it by the number of workers for the most recent year available. Because different countries will measure
Interview with John Haltiwanger: US Statistical Agencies - Conversable Economist
Both the budgets and methods of US statistical agencies like the Bureau of Labor Statistics and the Bureau of Economic Analysis have come under political challenge. this double-edged attack raises a question of sincerity: If the real goal is to enable these agencies to update their methods for the information age--for example, to rely less
Snapshots of Global Capital Markets - Conversable Economist
The Securities Industry and Financial Markets Association, typically referred to as SIFMA, is trade association: that is, it's an organization made up of investment banks, asset managers, brokers, and others. Among other rule-setting, lobbying, and public education missions, it publishes an annual databook: this year, the SIFMA Capital Markets Handbook 2025 (July 2025). Here are
Why Is Productivity Falling in the US Construction Sector? - Conversable Economist
In the long run, the standard of living for people in an economy rises as the amount of output produced per hour of work--that is, productivity--rises. There's reason for concern when productivity in an industry falls for a sustained period of time. In partiuclar, productivity seems to be falling in construction of housing, at the
Interview with Gary Hoover: Teaching with Purpose - Conversable Economist
Scott Wolla of the St. Louis Fed interviews Gary Hoover on his thoughts about teaching economics ("Gary Hoover: Teaching with Purpose," July 1, 2025, transcript available). Here are a few excerpts, but there's more in the full version: How he got interested in economics I’m a student who is in high school, and I’m watching
Some Economics of Leasing Antiquities - Conversable Economist
Here's the economic problem of antiquities: All over the world, there are historical artifacts buried under land or submerged underwater, or both. Also, there are museums and rich collectors all around the world who would like to possess these antiquities. But of course, the situatin here is more complex than basic supply and demand. Antiquities
Does the Invisible Hand Work For Honor, Too? A Thought from Montesquieu - Conversable Economist
One of the prevailing ideas that philosophers were trying out in the 17th and 18th century was that the line between personal interest and social good was not always clear-cut. Indeed, there were cases in which pursuit of personal interest was also of benefit to society as a whole. Here's an example from Montesquieu in
Voltaire on the Civility of Markets - Conversable Economist
A person does not really read Voltaire's Philosophical Dictionary (1764)--or at least I don't --but instead surfs through it from time to time, trying to hit some of the high spots. Here are a couple of comments for reflection on a summer's day, from the 1901 translation by William Fleming. In the entry under "Presbyterian,"
In Praise of Editors - Conversable Economist
As someone who has spent nearly 40 years working as an editor, I'm of course continually on the lookout for statements that praise editors. I know, I know--you'd think it would be easy to find examples of such a widely held sentiment. But it's harder than you might think. However, in the 100th anniversary issue
Federal Reserve Independence: Not Just a Good Idea, It’s the Law - Conversable Economist
Back in 1974, in the aftermath of the OPEC oil embargo, the National Maximum Speed Law was passed by Congress and signed into law by President Richard Nixon. It required all states to enact a maximum speed limit of 55 miles per hour, or else to face a cutoff of federal highway funding. The goal
What Economic Ideas are True and Nontrivial? - Conversable Economist
Short answer: comparative advantage is a plausible candidate. This story is an old one, but perhaps it has become old enough that some readers will not be familiar with it. It's told in a 1969 address by Paul Samuelson (Samuelson, Paul A. 1969. “Presidential Address: The Way of the Economist.” In P. A. Samuelson (ed.),
Learning, AI, and John Searle’s Chinese Room - Conversable Economist
In a 1980 book, Minds, Brains, and Programs, the philosopher John Searle used what has become known as the "Chinese room analogy" to discuss the relationsihip between artificial intelligence and learning. Searle set up his discussion this way: Suppose that I’m locked in a room and given a large batch of Chinese writing. Suppose furthermore
Summer 2025 Journal of Economic Perspectives Freely Available Online - Conversable Economist
I have been the Managing Editor of the Journal of Economic Perspectives since the first issue in Summer 1987. The JEP is published by the American Economic Association, which decided back in 2011–to my delight–that the journal would be freely available online, from the current issue all the way back to the first issue. You can download individual
Using Royalty Payments to Track Technological Leadership - Conversable Economist
It seems clear that China's economy is moving from being a technological follower, primarily using technology invented elsewhere, and moving toward generating a greater share of its own technology. But other than pointing to anecdotes or stories of specific companies, how might we measure the extent of this shift? François de Soyres, Ana Maria Santacreu, and Ethan
Nathaniel Hawthorne on How the Invention of Iron Stoves Ruined Society - Conversable Economist
My tradition on this blog is to take a break (mostly!) from current events in the middle and later part of August. Instead, I pre-schedule daily posts based on things I read during the previous year about three of my preoccupations: economics, editing/writing, and academia. With the posts pre-scheduled, I can then relax more deeply
How Many Jobs Depend on Exports? - Conversable Economist
Some jobs can be traced to export industries: thus, reduce trade and these jobs are at risk--at least their current form. The International Labour Organization offers an estimate of how much employment in countries around the world is linked to their exports to the United States (World Employment and Social Outlook: May 2025 Update). As
The US Auto Industry: Evolving, not Evaporating - Conversable Economist
One of those facts that "everyone knows" is that the US auto industry has been crushed by foreign competition. As Adam Ozimek points out in "Myths and Lessons from a Century of American Automaking" (Economic Innovation Institute, August 1, 2025), while the US car industry certainly no longer features large manufacturing plants in the city
Shifting Markers of Adulthood - Conversable Economist
A half-century ago, four markers were sometimes said to characterize adulthood: moving out of the parental home, getting a job, getting married, and having kids. How have those patterns evolved over time? Paul Hemez and Jonathan Vespa of the US Census Bureau provide some figures in "Significant Drop in Share of Young Adults Achieving Four
Federal Statistics and False Economies - Conversable Economist
The federal budget for collecting statistics has been dropping for years, and the Trump administration is continuing that trend. The American Statistical Association has been working on a project documenting and discussing the trend called ASA FedStat Health Project. The project back in 2023, during the Biden administration. The final report called The Nation’s Data
Refocusing US Health Care Spending - Conversable Economist
The ongoing paradox of the US health care system is that US per capita spending on health care is much higher than any other country, but the results in terms of gains to US health don't seem to stack up. Lawson Mansell describes the problem and offers some solutions in "Health Care Abundance: A Supply-Side
Little Progress in Reducing US Carbon Emissions - Conversable Economist
There's a game played about reducing US carbon emissions that I find annoying. It involves making a big deal about announcing timelines, but not actually taking the steps needed to meet those timelines. For example, as President Biden was leaving office late 2024, he annouced a goal that the US economy would be net-zero for
Global Trade Imbalances: An IMF Perspective - Conversable Economist
Global trade imbalances got bigger in 2024, driven by the big economies. Here's a figure from the External Sector Report: Global Imbalances in a Shifting World, from the IMF (July 2025). The horizontal axis shows trade balances in 2023. Looking at the horizontal axis, the US has by far the largest trade deficit in 2023,
Trying to Soften Up the Federal Reserve - Conversable Economist
There's a well-known approach in politics when one agency wants another agency--not under its direct control--to do something. You first try to soften up the resistance of the other agency by accusing them of stuff. It's even better if the accusations have some substance behind them, but really, all that matters is that the accusations
Tradeoffs of Lower Fertility Rates - Conversable Economist
When I was first worrying about public policy issues, back in the late 1970s, discussions of fertility rates often invoked the 1968 best-seller, The Population Bomb, written by Paul Ehrlich. At that time, the global population was about 3.5 billion--roughly half its current level. But the book warned that it was already too late, that
Only Five Ways to Address Rising US Debt - Conversable Economist
Greg Mankiw delivered the Martin Feldstein Lecture at the Summer Institute of the National Bureau of Economic Research on the subject, "The Fiscal Future" (July 10, 2025, video here, text here). He notes: Herbert Stein once wisely said that “if something cannot go on forever, it will stop.” And I have no doubt that this
So Why Has Rural Housing Become Less Affordable? - Conversable Economist
Many of the arguments for risings US housing prices relate to events in metro areas. For example, some metro areas like Manhattan and San Franciso have limited land on which to build. Add in rising demand for living in these locations and rules that limit building, and the result is housing prices that rise faster
Does the US Benefit When the US Dollar is the Global Reserve Currency? - Conversable Economist
I have been asked a surprising (to me) number of times over the years whether the US dollar was in danger of losing its status as the global "reserve currency"--that is, the currency in which most international transactions are denominated. The assumption behind the question is that it's a good thing for the US economy
Can the Financial Plumbing Handle Growing Treasury Debt? - Conversable Economist
Back during the Great Recession of 2007-09, it became common for economists to talk about "financial plumbing" as part of the problem. The metaphor of pipes and drains and valves was meant to suggest that a relatively small blockage or capacity limitation in one part of the financial plumbing could lead to much bigger systemic
Interview with Carmen Reinhart: Sovereign Debt, the US dollar as Reserve Currency, and More - Conversable Economist
Tim Sablik sets the stage for the conversation in "Carmen Reinhart: On twin financial and currency crises, the future of the dollar, and sovereign debt" (Econ Focus: Federal Reserve Bank of Richmond, Third Quarter 2025). On the status of the US dollar as the global reserve currency: When we talk about the dollar's dominance, it's
Latin America: A Lost Century for Catch-up Growth - Conversable Economist
It is common in talking about 1980s to refer to it as a "lost decade" for economic growth, when many developing economies around the world were trapped in destructive patterns of debt and inflation. But William F. Maloney, Xavier Cirera, and Maria Marta Ferreyra make a stronger claim about growth in Latin America, which is
How Much Will AI Increase Productivity? - Conversable Economist
It seems plausible that the developing AI technologies will improve productivity. I have friends and family who tell me how it is already useful in their own everyday work, often for speeding up the process of producing first drafts: say, of a Powerpoint slide for display, or a recommendation for an internship, or the software
V.S. Naipaul on the Pursuit of Happiness - Conversable Economist
The US Declaration of Independence famously states: "We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness." The Trinidad-born writer V.S. Naipaul, who won the Nobel Prize for Literature in