Tech's push to teach coding isn't about kids' success – it's about cutting wages | Technology | The Guardian

Tech's push to teach coding isn't about kids' success – it's about cutting wages | Technology | The Guardian

More money for Massachusetts transportation won't solve problems

The Massachusetts Taxpayers Foundation this week released a new report on the state's transportation system.  Key take-away:

“What is clear is that the state lacks the requisite information to make profoundly difficult choices,” the report writes. “Questions such as which projects to fund and when, and how revenue sources should be allocated must be included as part of a long-term sustainable transportation finance plan to address our transportation needs. Unfortunately, the state has not yet adopted such a plan.”

MassLive.com has a good summary of the report. 

Boston Fed President Eric Rosengren: Trends point to higher inflation

From the Boston Fed:

Speaking in New York, Boston Fed President Eric Rosengren said that underlying trends suggest "an economy that risks pushing past what is sustainable, raising the probability of higher asset prices, or inflation well above the Federal Reserve's 2 percent target."

"Steps lowering the probability of such an outcome seem advisable – in other words, seem like insurance worth taking out at this time," he said. "As a result, it is my view that regular and gradual removal of monetary accommodation seems appropriate."

Noting that the weakness in inflation readings appears to be transitory, Rosengren said "the declines in the unemployment rate below the level most see as sustainable seem likely to be more long-lasting."

"Discerning the underlying trends in unemployment and inflation – looking through transitory effects – is likely to be quite difficult in coming months," Rosengren said, citing the impact of recent hurricanes on economic data.

In addition, Rosengren noted that the Federal Reserve's dual mandate indicators – employment and inflation – are sending somewhat conflicting signals of late: labor markets have continued to improve, yet inflation has slipped down a notch this year.

Asking how policymakers might resolve the conflicting signals when "the central bank's dual mandate is 'dueling,'" Rosengren explored the forecasts of both central bankers and private forecasters. Both suggest that by the end of next year, inflation is expected to be close to target, while the unemployment rate will continue to fall – and as a result, will move further below most estimates of a sustainable unemployment rate.



Read more: Trends and Transitory Shocks - Federal Reserve Bank of Boston

35.  Tarnishing the Golden and Empire States: Land-Use Restrictions
and the U.S. Economic Slowdown
by Kyle F. Herkenhoff, Lee E. Ohanian, Edward C. Prescott  -  #23790 (EFG)

Abstract:

This paper studies the impact of state-level land-use restrictions on
U.S. economic activity, focusing on how these restrictions have
depressed macroeconomic activity since 2000.  We use a variety of
state-level data sources, together with a general equilibrium spatial
model of the United States to systematically construct a panel
dataset of state-level land-use restrictions between 1950 and 2014. 
We show that these restrictions have generally tightened over time,
particularly in California and New York.  We use the model to analyze
how these restrictions affect economic activity and the allocation of
workers and capital across states.  Counterfactual experiments show
that deregulating existing urban land from 2014 regulation levels
back to 1980 levels would have increased US GDP and productivity
roughly to their current trend levels. California, New York, and the
Mid-Atlantic region expand the most in these counterfactuals, drawing
population out of the South and the Rustbelt.  General equilibrium
effects, particularly the reallocation of capital across states,
accounts for much of these gains.  

http://papers.nber.org/papers/w23790?utm_campaign=ntw&utm_medium=email&utm_source=ntw

Structural Transformation, Deep Downturns, and Government Policy

Joseph E. Stiglitz

NBER Working Paper No. 23794
Issued in September 2017
NBER Program(s):   DAE   EFG

Most recessions are a result of some shock to the economic system, typically amplified by financial accelerators, and leading to large balance sheet effects of households and firms, which result in the effects persisting. But, over time, the balance sheets get restored. Even banks recover.

But episodically, the “shock” is deeper. It is structural. Among advanced countries, the movement from agricultural to manufacturing in the last century, and the more recent movement from manufacturing to the service sector reflect such a large economic transformation. The associated downturns are longer lasting. The usual responses, in particular, monetary policy, are only of limited efficacy. Policies have to be designed to facilitate such transformations: markets on their own typically do not do well.

This paper explains why such transformations are associated with persistently high unemployment, and describes the effects of particular government policies. It looks at the lessons of the Great Depression both for the advanced countries and the developing countries as they go through their structural transformations.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Which sectors provided the most job growth since January 2007: A 10-year look

Source: Bureau of Labor Statistics, CES Series

Last Friday, the Bureau of Labor Statistics reported the U.S. economy created 156,000 jobs in August 2017, a number below economists' consensus estimates. The unemployment rate "was little unchanged" according to the BLS, but actually ticked upward to 4.4 percent. Major job gains emerged in manufacturing, construction, professional and technical services, health care and mining. How have these sectors fared since the peak before the Great Recession, which began in December 2007 and ended in June 2009? How does Friday's snapshot relate to longer term trends? 

The decline in manufacturing jobs in the United States has trended downward over the decades. Few workers are producing more output. The interesting takeaway from this chart is the decline in construction jobs. Despite the uptick in the economy, construction jobs are down 800,000 since January 2007.  The high-paying education and health services and professional the business services added more than two-thirds of the decade long gain to total non-farm employment. Less impressive is the gain in the generally lower paid professions of leisure and hospitality which added 2.6 million since January 2007. 

When pot laws are not the same across states, can we expect seepage?

In their new working paper, Benjamin Hansen, Keaton Miller, Caroline Weber ask "How Extensive is Inter-State Diversion of Recreational Marijuana?" Only a small amount they say. 

Abstract:

Despite federal prohibition, recreational marijuana is available to 21% of the United States population.  A chief concern among policy makers across multiple levels of government and political parties is inter-state diversion of marijuana from states with legal markets to others.  We measure this diversion with a natural experiment.  Oregon opened a recreational market on October 1, 2015, next to an existing market in Washington, which opened on July 8, 2014.  Using comprehensive administrative data on the universe of Washington sales, we find Washington retailers along the Oregon border experienced a 41% decline in sales immediately following Oregon's market opening.  Retailers along Washington's borders with Idaho and Canada experienced no such decline.  The decline occurred equally across weekdays and weekends, and was largest among the largest transaction sizes, suggesting diversion, not drug tourism, was to blame. Our estimates suggest that 11.9% of the marijuana sold in Washington was diverted out of the state before Oregon legalized and
7.5% remains diverted today.

A gated copy of the research paper can be found here.