Is US Economic growth over? A discussion from innovations perspective

Gordon is an excellent; reading his book now which is a great read. But his theoretical framework is weak. He does not have a theory of growth or of the direction of innovation such as by a Aghion or Aghion.

Is much easier to make the argument that innovation is getting harder simply by putting for the massive increase in the size of the research and development labour force and of graduates and yet no increase in the growth rate.

Mostly Economics

A fab paper by Robert Gordon of Northwestern Univ. I cannot locate a free version.

He looks at the US growth story from the innovation cycle angle. He points to three phases of innovations in US. Each of these phases led to growth in US economy. Some innovations had a much larger and longer impact than others.

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The Decoupling Of Labor Productivity And Median Wages

All Different Things

At the OECD Insights blog, James Plunkett announces findings from the Professor John van Reenen and Joao Paulo Pessoa of the London School of Economics study funded by the Resolution Foundation, Decoupling of Wage Growth and Productivity Growth? Myth and Reality. The research gives keen insight to the problems of median wage stagnation, concluding that there has been a great amount of decoupling between labor productivity and median hourly wages in the UK. Median hourly wages were essentially flat for the past two decades but for a four year growth.

The study defines an important distinction between net and gross decoupling; one which supports the narrative and one which does not. While the first, net decoupling, defined by van Reenan and Pessao as the difference between GDP growth per hour (labor productivity) and average compensation, with GDP deflator taken into account for both, was found not to have diverged, gross decoupling has…

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When, exactly, did India get a nuclear weapon? Part II

Shashank Joshi

A few years ago, I summarised an International Security article by Gaurav Kampani that described India’s process of acquiring nuclear weapons. “The author’s interviews with several senior retired Indian air force officers at the highest levels”, concluded Kampani, “suggest that India achieved an air-deliverable capability sometime in 1995”.

In a new piece by Vipin Narang in the same journal, which looks at why different states pursue nuclear weapons in different ways, we find new details on this period of Indian history. The sentences in bold are attributed to interviews with Naresh Chandra, then the defense secretary (“secretary” refers to a senior civil servant, not a minister).

In March 1989, nine months after [Prime Minister] Rajiv [Gandhi]’s failed UN speech, Rajiv discreetly ordered Naresh Chandra, his newly appointed defense secretary, to take India’s nuclear program over the finish line; the result was “a dramatic change of pace in India’s nuclear weapons plans.”Cabinet Secretary Deshmukh…

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Occupational segregation a weak reed to hang #genderwagegap @FairnessNZ

NZ has a gender wage gap of 6% according to the OECD and 12% according to the Ministry of Women’s Affairs, with 30% of that explained by occupational segregation. That is 2 to 4 percentage points.

You have to explain occupational segregation. Men are represented more in occupations that are riskier. They are paid more for that. There are systematic differences in the occupational choices of married parents, single parents and single mothers regarding the risks of injury. Again, that feeds into wages.

Occupational segregation explains 2 to 4 percentage points of wages. Given that risk premiums – danger money – and trading lower wages for greater flexibility in a job can easily reduce wages or increase them by 2-4%, occupational segregation is simply a proxy for measurement error.

Still more of wage premiums has to be poured into this 2-4% of wages such as occupational segregation in unsocial work hours. Many more women than men work 9 to 5 during the week. Men would then have a wage premium for working nights and weekends. A hell a lot has to be explained away by just 2 to 4% wages.

What does undervalued work mean? Does it mean it is very profitable to employ women in certain occupations such as caring. That implies that high profits will lead new firms to enter these industries bidding up wages and equalising them with other competing jobs.

Kevin Murphy models the stimulus–and the results aren't pretty

Truth on the Market

A great video from the University of Chicago here with comments from John Huizinga, Kevin Murphy and Robert Lucas. John Huizinga also wonders if we’re calculating the costs. Robert Lucas is skeptical.

But Kevin Murphy’s discussion is (not surprisingly) worth the price of admission (I only wish the video showed the slides). He puts some mathematical meat on the bones-answering my earlier question with a lot more variables than Krugman was able to muster.  His model itself raises a range of interesting and essential issues, seemingly glossed over by the stimulus fundamentalists (it’s their turn thusly to be tarred)–including (among others):

the relative inefficiency of government in allocating resources;

the conflict between stimulus and investment (between deploying underemployed resources and improving productivity);

the prospect of drawing otherwise productive resources into less-productive stimulus (Murphy: “You have to remember, even with 7% unemployment, 93% of the resources out there are being…

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The Growth of Low Skill Service Jobs and the Polarization of the U.S. Labor Market


From David Autor and David Dorn:

We offer an integrated explanation and empirical analysis of the polarization of U.S. employment and wages between 1980 and 2005, and the concurrent growth of low skill service occupations. We attribute polarization to the interaction between consumer preferences, which favor variety over specialization, and the falling cost of automating routine, codifiable job tasks. Applying a spatial equilibrium model, we derive, test, and confirm four implications of this hypothesis. Local labor markets that were specialized in routine activities differentially adopted information technology, reallocated low skill labor into service occupations (employment polarization), experienced earnings growth at the tails of the distribution (wage polarization), and received inflows of skilled labor.


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More ultra-Orthodox Jews refuse to sit next to women on planes

Why Evolution Is True

This is becoming so common that it barely rates a mention, but what bothers me is the compliance of female passengers. Yes, it’s happened again: according to many venues, including Haaretz and the Jewish Chronicle  (see also the Daily Mail if you want to go downscale), a group of ultra-Orthodox Jewish men (“Haredis”), on an EasyJet flight from Tel Aviv to London refused to sit next to women after they boarded the plane. That caused considerable consternation, which was resolved when some compliant women offered to move:

Eventually, after a 15 minute stand-off, where the men were said to have blocked the aisles, some of the female passengers offered to move from their seats in order for the men to agree to sit down.

The passenger told the JC: “A group of around 10 ultra-Orthodox men caused absolute bedlam on the flight.

“It was infuriating to witness both for passengers and for…

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