Archive for the ‘Inequality’ Category

The Tradeoff between Inflation and Unemployment: What We Don’t Know Can Hurt Us

July 28th, 2014

To assert that economists are having trouble figuring out the relationship between inflation and unemployment is like saying chefs can’t figure out what to do with salt and pepper.  It’s that fundamental.  Yet, we’re befuddled, and that has powerful policy implications. For example, a prominent macro economist recently suggested to me that we must have… Read more

Evidence: Is It Really Overrated?

July 4th, 2014

A few weeks ago, during the evidentiary dustup between Piketty and the FT, I quasi-favorably quoted a Matt Yglesias line re empirical evidence being overrated.  A number of readers were understandably unhappy with that assertion, arguing that they come here to OTE for fact-based analysis based on empirical evidence (with, admittedly, a fair bit a… Read more

Mankiw, Piketty, and Wealth Taxes

June 23rd, 2014

While he acknowledges its diminishingly small probability of occurring, Thomas Piketty’s idea for a global wealth tax falls neatly out of his model wherein wealth accumulation amidst slow growth relentlessly leads to higher inequality. Some have raised objections to the underlying model—it assumes, for example, that the wealthy save rather than spend much of their… Read more