The career prospects of overeducated Americans

Brian Clark, Clement Joubert, Arnaud Maurel 16 November 2014

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Americans had accumulated more than 1 trillion dollars in student loan debt as of 31 December, 2013. While the press conveyed widespread concern over this number, it might be that efficient credit markets are allowing more individuals to invest in education, with large rewards in terms of future earnings. After all, young college graduates earned 62.5% more on average than high school graduates in 2013 (Taylor et al. 2014). However, researchers have started paying more attention to the fact that the huge average ‘college wage premium’ masks large differences in post-college earnings.

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Topics:  Education Labour markets

Tags:  overeducation, unemployment, underemployment, US

TTIP is about regulatory coherence

Lionel Fontagné, Sébastien Jean 16 November 2014

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The TransAtlantic Trade and Investment Partnership (TTIP) negotiations have become a full-blown political issue. This is understandable. The two largest economic entities in the world – already highly integrated – are negotiating a deep integration agreement, going beyond what has been done previously in any agreement except the EU’s Single Market programme. This makes TTIP different. Can economists say anything about the likely economic impact of such an agreement?  

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Topics:  International trade

Tags:  TTIP, US, EU, trade agreements

Influencing household inflation expectations

Alberto Cavallo, Guillermo Crucas, Ricardo Perez-Truglia 10 November 2014

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Expectations about macroeconomic variables play an important role in economic theory and policymaking. Household inflation expectations, in particular, are key to understand consumption and investment decisions, and ultimately, the impact of monetary policies. Although central banks have a natural desire to influence expectations, there is no consensus on how household expectations are formed or what the best way to affect them is (see Bernanke 2007, Bachmann et al. 2012, Coibion and Gorodnichenko 2013, and Armantier et al. 2014).

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Topics:  Monetary policy

Tags:  expectations, beliefs, inflation, inflation expectations, monetary policy, US, Argentina, central bank communication, rational inattention, costly information, learning

The impact of the maturity of US government debt on forward rates and the term premium: New results from old data

Jagjit Chadha 02 November 2014

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Revisiting the supply effect

The question of the impact of the stock and maturity of net government debt on longer-term US Treasury yields, and the potential implications for central bank balance sheet policies, matters for monetary policy.

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Topics:  Financial markets Macroeconomic policy Monetary policy

Tags:  public debt, yield curve, debt maturity, term premia, interest rates, open market operations, monetary policy, QE, US, Federal Reserve, market segmentation, Greenspan Conundrum, debt management, fiscal policy, unconventional monetary policy

Macroeconomic policy mix in the transatlantic economy

Moreno Bertoldi, Philip R. Lane, Valérie Rouxel-Laxton, Paolo Pesenti 24 October 2014

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The reason why the macroeconomic policy mix has been different on the two sides of the Atlantic in recent years remains a hotly debated issue. Was it due to a different reading of the root causes of the Global Crisis and, therefore, of the type of policy response considered most appropriate?

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Topics:  Global crisis Macroeconomic policy

Tags:  eurozone, US, macroeconomic policy, transatlantic economy, global crisis

Innocent bystanders? Monetary policy and inequality in the US

Olivier Coibion, Yuriy Gorodnichenko, Lorenz Kueng, John Silvia 25 October 2014

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In recent decades, the Fed has given way completely, at the highest level and with disastrous consequences, when the bankers bring their influence to bear…  As the American economy begins to improve, influential people in the financial sector will continue to talk about the need for a prolonged period of low interest rates.  The Fed will listen. This time will not be different.”  Acemoglu and Johnson (2012)     

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Topics:  Monetary policy Poverty and income inequality

Tags:  US, monetary policy shocks, income inequality, consumption, household heterogeneity

Maximising happiness does not maximise welfare

Edward Glaeser, Joshua Gottlieb, Oren Ziv 15 October 2014

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Recent interest in the psychology and economics of happiness has had pronounced influence on public policy. The high-profile report by Stiglitz et al. (2009) epitomises a push for policies to explicitly promote increases in survey measures of wellbeing as a major social objective. Places ranging from the country of Bhutan to the city of Somerville, Massachusetts explicitly measure happiness, or subjective wellbeing, and strive for improvements over time in such measures.

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Topics:  Frontiers of economic research

Tags:  happiness, welfare, cities, Rust Belt, US

Americans work too long (and too often at strange times)

Daniel S. Hamermesh, Elena Stancanelli 29 September 2014

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The facts on work hours and timing

The average US workweek is 41 hours, 3 hours longer than Britain’s and even longer than in Germany, France, Spain, or the Netherlands (see the Table below).

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Topics:  Labour markets

Tags:  work hours, night work, weekend work, US, Europe

Cross-country differences in perceptions of inequality

Judith Niehues 28 September 2014

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The well-known and frequently tested median voter theorem predicts a positive relationship between income inequality and state redistribution; if the decisive median voter’s income is below the social average, he votes for more welfare redistribution because he expects to benefit from progressively financed welfare programmes. However, this theory does not perform very well when confronted with data. Although income inequality is high in the US, support for welfare state programmes is relatively low. In contrast, income differences in European countries are substantially lower.

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Topics:  Poverty and income inequality Welfare state and social Europe

Tags:  income inequality, perceived income inequality, Europe, US

The rise of China and the future of US manufacturing

Daron Acemoglu, David Autor, David Dorn, Gordon H. Hanson, Brendan Price 28 September 2014

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The end of the Great Recession has rekindled optimism about the future of US manufacturing. In the second quarter of 2010 the number of US workers employed in manufacturing registered positive growth – its first increase since 2006 – and subsequently recorded ten consecutive quarters of job gains, the longest expansion since the 1970s.

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Topics:  International trade

Tags:  manufacturing, US, China, value added

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