EconoMonitor

Ed Dolan's Econ Blog

  • What Does the Unemployment Rate Measure? Labor Market Slack or the Social Stress of Joblessness? Why Does it Matter?

    The unemployment rate published monthly by the Bureau of Labor Statistics is one of the most widely watched of all economic indicators. But why? What does it really measure? The news media, politicians, and voters tend to see the unemployment rate as an index of the social stress of joblessness. There is ample evidence to […]

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  • Does the Social Safety Net Provide Enough Incentive to Work?

    One of the most common criticisms of social safety net programs is that they discourage work. As House Speaker Paul Ryan has put it, they risk becoming a “hammock that lulls able-bodied people to lives of dependency and complacency,  that drains them of their will and their incentive to make the most of their lives.” […]

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  • Promises of Corporate Tax Reform are Forgotten as Obama Wages War on Inversions

    The Obama administration has taken off the gloves in its war on runaway corporations. On April 4, the Treasury released a new set of rules designed to curb “inversions,” a strategy in which a US company cuts its corporate tax burden by merging with a foreign company and moving its official tax residence out of […]

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  • Voters are Angry about Free Trade. What is the Right Policy Response?

    The two most watched candidates of this presidential election season, Donald Trump and Bernie Sanders, have put anger over the effects of free trade at the center of their campaigns. In doing so, they have won millions of votes. Many of the arguments they use in their stump speeches are overly simplistic, but the anger […]

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  • The Great Bipartisan War on Free Trade

    Like most economists, I am strongly inclined toward free trade. I cringe to see the way free trade is under attack, from both parties, during this primary season. The two populist candidates are the worst offenders. Bernie Sanders, whom I support on many other issues [1] [2] [3], goes off the rails when it comes […]

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  • Sanders is Right, the US Needs a Healthcare System More Like Those in Europe

    Presidential candidate Bernie Sanders has reopened the healthcare debate by urging America to adopt a system more like that of other wealthy countries. “The United States is the only major country on earth that doesn’t guarantee health care to all people,” he says, “And we end up spending far, far more per capita on health […]

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  • Marco Rubio Would Leave Economic Policy Rudderless

    Stabilizing the national economy is one of the federal government’s key responsibilities. Is that too much to ask? OK, then, can we at least ask that the government not make things worse when instability strikes? Not if you’re Marco Rubio. Sooner or later an oil price meltdown, a banking crisis, or a Chinese hard landing […]

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  • Why Would Anyone Want to Make the US More Like Europe? Here are Some Reasons

    The idea that Democrats want to make America more like Europe is a favorite Republican attack line. Writing in The New York Times, David Brooks expresses amazement that so many millennials are supporting Bernie Sanders, an open admirer of the European model. Why would anyone in their right mind favor “sluggish” Europe over “vibrant” America? […]

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  • The Case for Breaking Up Too-Big-To-Fail Banks

    The presidential campaign has brought new attention to the problem of banks that are too big to fail (TBTF). As everyone agrees, the largest banks are bigger than ever. As the following chart shows, the share of all bank assets held by the four largest banks rose from 33 percent in 2007 to 41 percent […]

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  • China’s Latest “Devaluation:” A Currency War in the Making?

    China’s currency has, once again, been weakening against the dollar. It is down by more than 4 percent since October, including a fall of more than one percent just last week. Writing in the New York Times, Landon Thomas, Jr. warned that “China’s decision to push the value of its currency lower has opened a […]

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