Tag: economics

How Important Is Inequality?

The authors attribute the growth of household inequality to 3 interacting forces. The first is rising returns to education. Earnings across educational classes have become more polarized. The second factor is increased positive assortative mating. People with similar socioeconomic backgrounds tend increasingly to marry each other, exacerbating income inequality. Third, the increase in married female labor force participation has heightened inequality

Uber and Airbnb Resurrect Dead Capital

Just as Hernando de Soto estimated there is over $9T in dead capital globally, a non-trivial amount of the $1Ts in Americans’ non-financial household net worth is undoubtedly dead—not because of informal titles, uncertainty of ownership, or dysfunctional financial institutions, but because the owners of this capital didn’t really see what they have as capital. And even if they did, markets were too riddled with information asymmetries, barriers to entry, and high transaction costs for this capital to be commercialized.

What we are seeing now is likely the tip of the iceberg; who knows what other capital lies dormant and how entrepreneurs may find ways to use it.

Negative Equity

The US has the second largest population of indebted people, and US poor people are able to rack up more debt than the poor Indian person. this isn’t just a theoretical exercise either: while basic income will probably happen, i don’t see a global debt jubilee happen. which would mean that everyone in the world would have enough to eat, but people with negative equity would still not be able to live free lives because they’ll be constrained to serving their debt load.

India does software right, sometimes

federal IT projects can work remarkably well (if you’re india)

One of the most important positive developments of our time – both underpublicized and underappreciated — is our growing ability to send and receive money securely across space. It’s not just Paypal or Bitcoin in the West, as the truly significant gains from payment systems are coming in the developing world. In particular, the efforts of the Indian government to set up a biometrically-based payments system are improving the lives of many millions and may go down as one of the most impressive achievements of contemporary times.

Detroit special economic zone

Besides paying a flat 5% tax on income and corporate revenues, areas designated Economic Freedom Zones would carry no capital gains taxes, see reduced payroll taxes and be suspended from meeting certain environmental protection regulations, among other changes.

special economic zones for areas hardest hit. why not? if he is right, something good will come of it, if he is wrong, we can say shut it libertarians. win-win.

Russia pretends for the Olympics

the highly inefficient industrial structure of the old Soviet economy, based on misallocation of both resources and people, remains intact. The oil rent reinforced and perpetuated it: it has bought political stability and the loyalty of the population, but has slowed down modernisation. Inevitably, the result is stagnation. During the 2000s the number of bureaucrats almost doubled.