Housing, justice, jobs, and the flat Phillips Curve: Racial discrimination and a possible role for the Fed

May 15th, 2017 at 11:35 am

Over at WaPo. One attribute of the post is the link to Richard Rothstein’s important new book documenting the “unhidden policies” responsible for racial residential segregation. The rigor of his research creates a bullet proof case for a) the laws, covenants, and zoning practices that kept African-Americans in high-poverty areas, and b) the difficulty unwinding those impacts today. I predict this book is going to be a big deal. At least I hope so.

Here’s the figure showing the constant ratio where black unemployment rates are 2x those of whites. This may be one of the most consistent relationship in economics, which is why I argue for lower overall unemployment in the piece, to tap this powerful elasticity to disproportionately push down the black rate.

Source: BLS

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One comment in reply to "Housing, justice, jobs, and the flat Phillips Curve: Racial discrimination and a possible role for the Fed"

  1. Peter K. says:

    Sad to see Krugman’s column today where he writes

    “Now, however, unemployment is near historic lows; quit rates, which show how confident workers are in their ability to find new jobs, are back to pre-crisis levels: wage rates are finally rising; and the Fed has begun raising interest rates.

    America may not be all the way back to full employment — there’s a lively debate among economists over that issue. But the economic engine no longer needs a fiscal jump-start. This is exactly the wrong time to be talking about the desirability of bigger budget deficits.”

    No pushback from the center left econosphere. A sorry state of affairs.


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