Peter Thiel’s Graph of the Year

Debt: the First 5000 Years

I recently read Debt: the First 5000 Years by David Graeber, and it has stuck on my mind for a while. It’s one of those “Everybody is wrong about X, here is what you’ve missed in plain sight” -type…

These are some relevant sections from What We Owe The Future:

These are some relevant sections from What We Owe The Future: pic.twitter.com/sPfNF5WzaL— William MacAskill (@willmacaskill) November 11, 2022

Graph: How the Financial Sector Consumed America’s Economic Growth

Last Tuesday, The Century Foundation was honored to host Alan Blinder, renowned economist and recent editor (alongside Andrew Lo and Robert Solow) of

Clearing College Debt | The Paper Pilot

The Paper Pilot's digital garden of thoughts on philosophy, politics, and sociology

Global Inequality — Harvard University Press

Winner of the Bruno Kreisky Prize, Karl Renner InstitutA Financial Times Best Economics Book of the Year An Economist Best Book of the Year A Livemint Best Book of the YearOne of the world’s leading economists of inequality, Branko Milanovic presents a bold new account of the dynamics that drive inequality on a global scale. Drawing on vast data sets and cutting-edge research, he explains the benign and malign forces that make inequality rise and fall within and among nations. He also reveals who has been helped the most by globalization, who has been held back, and what policies might tilt the balance toward economic justice.“The data [Milanovic] provides offer a clearer picture of great economic puzzles, and his bold theorizing chips away at tired economic orthodoxies.”—The Economist“Milanovic has written an outstanding book…Informative, wide-ranging, scholarly, imaginative and commendably brief. As you would expect from one of the world’s leading experts on this topic, Milanovic has added significantly to important recent works by Thomas Piketty, Anthony Atkinson and François Bourguignon…Ever-rising inequality looks a highly unlikely combination with any genuine democracy. It is to the credit of Milanovic’s book that it brings out these dangers so clearly, along with the important global successes of the past few decades.—Martin Wolf, Financial Times

Recent USA Sectoral Balances: Goldilocks, the Global Crash, and the Perfect Fiscal Storm

In the previous blog, we did some heavy lifting. Unless you are an economics or accounting nerd, you found it quite boring. This week we will take a little break from pure accounting, and apply what w

A Debt Puzzle

Over 60% of US households with credit cards are currently borrowing – i.e., paying interest – on those cards. We attempt to reconcile the high rate of credit card borrowing with observed levels of life cycle wealth accumulation. We simulate a lifecycle model with five properties that create demand for credit card borrowing. First, the calibrated labor income path slopes upward early in life. Second, income has transitory shocks. Third, consumers invest actively in an illiquid asset, which is sufficiently illiquid that it can not be used to smooth transitory income shocks. Fourth, consumers may declare bankruptcy, reducing the effective cost of credit card borrowing. Fifth, households have relatively more dependents early in the life-cycle. Our calibrated model predicts that 20% of the population will borrow on their credit card at any point in time, far less than the observed rate of over 60%. We identify a resolution to this puzzle: hyperbolic time preferences. Simulated hyperbolic consumers borrow actively in the revolving credit card market and accumulate relatively large stocks of illiquid wealth, matching observed data.

On shifting consumers from high‐interest to low‐interest debt

Abstract In the United States, many consumers are increasingly accumulating debt, much of which is harmful and expensive. Prior research has devoted a great deal of attention to understanding why consumers generally get into debt and the strategies they can use to repay existing debts. While this work has furthered the agenda of helping consumers reduce or eliminate their overall debt balances, it has failed to emphasize the fact that for many consumers, debt may be unavoidable. This article aims to promote research that addresses not only overall debt reduction but also the need for consumers to shift from more to less costly types of debt. By shedding light on the psychological reasons why consumers may naturally gravitate toward more costly forms of debt when less costly ones may be available, we offer a novel perspective on why consumers get into and stay in debt longer than they should. This new angle has the potential to spur on further research into the ways consumers can use debt more effectively and less expensively in service of the overarching goal of debt reduction.

Survival of the Richest

FUTURE HUMAN Survival of the Richest The wealthy are plotting to leave us behind (This piece is now the basis of a new book, Survival of the Richest: Escape Fantasies of the Tech Billionaires.) Last …

Society's Technical Debt and Software's Gutenberg Moment

Abstract

Economic Possibilities for our Grandchildren- John Maynard Keynes

We are suffering just now from a bad attack of economic pessimism. It is common to hear people say that the epoch of enormous economic progress which characterised the nineteenth century is over; that the rapid improvement in the standard of life is now going to slow down—at any rate in Great Britain; that a decline in prosperity is more likely than an improvement in the decade which lies ahead of us.

We have killed the technical debt - Alex's Blog

Big day for docs 🙂🙂

The Fallacy of Endless Economic Growth

What economists around the world get wrong about the future.