Posts

Showing posts from May, 2016

The Economics of Persistent Slumps

Image
This week I went with a friend to the Philips lecture  at The London School of Economics and Political Science (LSE) with Professor Robert Hall of Stanford University, originator & author of ‘The Flat Tax’   & one of the founders of Macroeconomics (author of one of the first books on the subject and now the standard University textbook on Macroeconomics  The gist of the lecture was how productivity has declined in the USA. Areas of concern included the rapid fall in the Labour participation rate, which has now started to affect women (who previously were increasing in the labour force quite rapidly) too.



The biggest surprise here is that almost all of the decline in the Labour force is in the top levels of income and education.

Almost all the Labour participation shrinkage in the US Economy is from the richest and most highly educated sectors






 Professor Hall calculated that US GDP would be approximately 15 percentage points higher if this and a few more minor issues were addressed…