CERF Blog

Nobel economist Edmond S Phelps has a piece, What is Wrong with the West’s Economies?  He discusses the alarming slowdown in western economies dating back to the 1960s, a lack of what he call flourishing or a narrowing of innovation.  It’s a nice piece and I recommend reading it in its entirety.  As you might expect,… Read more

“It’s no longer legal to say, ‘We don’t want African-Americans to live here,’ but you can say, ‘I’m going to make sure no one who makes less than two times the median income lives here,’” Jargowsky told me. The above quote is from an Atlantic article on the resurrection of American slums.  I recommend the… Read more

I saw this Kaufman Foundation article that argues that, by reducing the downside risks, an aggressive government-provided safety net promoted entrepreneurship, jobs, and economic growth.  If one follows the links, there is some empirical support for the argument. So, I figured that if I looked at data across countries, high-support countries would dominate new-business data.  When… Read more

It’s generally agreed that excessively lax lending standards were major contributors to the financial crisis that precipitated the Great Recession.  So, Washington wants to do it again, only more.  Here’s part of what Investors.com has to say: In a just-released federal report, the administration portrays these “credit invisibles” as victims of a traditional credit-scoring system.… Read more

It is.  Corporate welfare sustains inefficient old firms while impeding innovative new firms.  In this Forbes piece, George Leef discusses the use of tax waivers or direct subsidies to attract firms to a city or state.  As he points out politicians of all stripes do this: One of the great bipartisan follies of American politics is the idea… Read more

Tyler Cowen has a piece in the New York Times today.  He’s arguing that fundamental weaknesses and dysfunctions may be causing permanent changes, a reset: The debate over the economy these days isn’t just about income inequality and what should or should not be done about it. Perhaps the most crucial issue is whether economies will… Read more

The preliminary estimate of United States third quarter economic growth was released today. The growth number is 2.8 percent, stronger than any of the three quarters prior. The quarter 2 growth rate was 2.5 percent, and the quarter 3 result beat our forecast of 1.3 percent. This was despite slowdowns in the growth of consumption… Read more

The U.S. Bureau of Economic Analysis (BEA) released their annual comprehensive revision of the national income and product accounts on Wednesday, July 31. Most of the Financial news websites focused primarily on the first estimate of the second quarter of 2013, which was that economic growth was 1.7 percent. The analysis that was presented was… Read more

The advance estimate of U.S. third quarter GDP was released this morning, indicating that the economy grew at 2 percent. Third quarter growth was driven by private consumption and government defense consumption. Investment expenditures were weak, and trade was a small drag on third quarter growth. Business investment expenditures actually contracted, while residential real estate… Read more

A major event in the financial markets last month was the initial public offering of FaceBook (ticker symbol FB).  Despite the subsequent decline in price, the financial press reported that this IPO “instantly” created many new millionaires and billionaires.  By doing so, the IPO has worsened economic inequality in the U.S.  This is because inequality… Read more