Inequality and Monetary Policy
The ratio of the 90th to the 10th percentile of the US income distribution has been unaffected by the Federal Reserve's unconventional monetary policies since the financial crisis.
Cadillac Tax
The “Cadillac tax” on expensive employer-provided health insurance plans will reduce costly distortions in US health care if it is allowed to take effect as scheduled in 2018.
Responses
Breaking Up Banks
This week's IGM Economic Experts Panel statements:
The four largest domestic US banks currently have around 40% of the industry’s domestic assets (an average of 10% each). In early 1998, before Glass-Steagall ended and before Citicorp merged with Travelers, they held 13.2% (an average of 3.3% each). Thirty years ago, before interstate branching was fully permitted, that combined share was around 8% (an average of 2% each).
A) Capping US banks’ size so that no single bank could be larger than 4% of the sector's domestic assets would lower systemic risk in the US.
B) The US financial system would contribute more to the average American’s welfare if the size of US banks were capped so that none could be larger than 4% of the sector's domestic assets.
The four largest domestic US banks currently have around 40% of the industry’s domestic assets (an average of 10% each). In early 1998, before Glass-Steagall ended and before Citicorp merged with Travelers, they held 13.2% (an average of 3.3% each). Thirty years ago, before interstate branching was fully permitted, that combined share was around 8% (an average of 2% each).
A) Capping US banks’ size so that no single bank could be larger than 4% of the sector's domestic assets would lower systemic risk in the US.
B) The US financial system would contribute more to the average American’s welfare if the size of US banks were capped so that none could be larger than 4% of the sector's domestic assets.
Bureau of Labor Statistics
This week's IGM Economic Experts Panel statements:
A) By providing important measures of US economic performance — including employment, consumer prices, wages, job openings, time allocation in households, and productivity — the Bureau of Labor Statistics creates social benefits that exceed its annual cost of roughly $610 million.
B) Cuts in BLS spending would likely involve net social costs because potential declines in the quality of data, and thus their usefulness to researchers and decision makers, would exceed any budget savings.
A) By providing important measures of US economic performance — including employment, consumer prices, wages, job openings, time allocation in households, and productivity — the Bureau of Labor Statistics creates social benefits that exceed its annual cost of roughly $610 million.
B) Cuts in BLS spending would likely involve net social costs because potential declines in the quality of data, and thus their usefulness to researchers and decision makers, would exceed any budget savings.
Trade and Toughness
This week's IGM Economic Experts Panel statement:
An important reason why many workers in Michigan and Ohio have lost jobs in recent years is because US presidential administrations over the past 30 years have not been tough enough in trade negotiations.
An important reason why many workers in Michigan and Ohio have lost jobs in recent years is because US presidential administrations over the past 30 years have not been tough enough in trade negotiations.
Primary Voting
This week's IGM Economic Experts Panel statements:
A) There is no perfect voting system. That is, no voting system can ensure that the winner will be the person who best represents voters’ wishes, including how intensely they favor or disfavor each candidate.
B) One clear defect of a winner-take-all election with 3 or more candidates, and with each voter choosing only one candidate, is that a candidate who is strongly disliked by a majority, but strongly liked by a minority, can beat a candidate who is liked by a majority and disliked by relatively few.
A) There is no perfect voting system. That is, no voting system can ensure that the winner will be the person who best represents voters’ wishes, including how intensely they favor or disfavor each candidate.
B) One clear defect of a winner-take-all election with 3 or more candidates, and with each voter choosing only one candidate, is that a candidate who is strongly disliked by a majority, but strongly liked by a minority, can beat a candidate who is liked by a majority and disliked by relatively few.
Oil Price Speculation
This week's IGM Economic Experts Panel statement:
Large movements in monthly oil prices, either up or down, are driven primarily by speculators, as opposed to changes in the current (and planned) supply or demand for oil.
Large movements in monthly oil prices, either up or down, are driven primarily by speculators, as opposed to changes in the current (and planned) supply or demand for oil.
Brexit
This week's IGM Economic Experts Panel statements:
A) If the UK opts to withdraw from the European Union, and assuming Scotland stays in the UK, the level of the UK's real per-capita income a decade later will be lower than if it remains part of the EU.
B) If the UK exits the EU, then it substantially increases the chances that some other current region of the EU will also exit within the following decade.
A) If the UK opts to withdraw from the European Union, and assuming Scotland stays in the UK, the level of the UK's real per-capita income a decade later will be lower than if it remains part of the EU.
B) If the UK exits the EU, then it substantially increases the chances that some other current region of the EU will also exit within the following decade.
China’s Growth
This week’s IGM Economic Experts Panel statement:
China’s growth model, specifically the unusually high investment rate and low consumption rate, is unsustainable.
China’s growth model, specifically the unusually high investment rate and low consumption rate, is unsustainable.
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