The Berkeley Blog » Business & Economics

Inequality on the horizon of need

Brad DeLong — Fri, 31 May 2013 16:12:52 +0000

By any economic measure, we are living in disappointing times. In the United States, 7.2% of the normal productive labor currently stands idle, while the employment gap in Europe is rising and due to exceed that of the US by the end of the year. So it is important to step back and remind ourselves that the “lost decade” that we are currently suffering is not our long-run economic destiny.

As Paul Krugman recently reminded us, John Maynard Keynes perhaps put it best:

This is a nightmare, which will pass away with the morning. For the resources of nature and men’s devices ... More >

The case for cultivating gratitude at work

Jeremy Adam Smith — Mon, 20 May 2013 17:18:45 +0000

Why should anyone thank you for just doing your job? And why should you ever thank your coworkers for doing what they’re paid to do?

These are common questions in American workplaces, often posed rhetorically—and sometimes with hostility.

Elsewhere in American life, we say “thank you” to acknowledge the good things we get from other people, especially when they give out of the goodness of their hearts. We say “thanks” at home and in school, in stores and at church.

But not at work. According to a survey of 2,000 Americans released earlier this year by the John Templeton Foundation, people are less ... More >

More services means longer recoveries

Martha Olney — Thu, 02 May 2013 18:09:11 +0000

By Martha L. Olney and Aaron Pacitti

Recovery from recessions takes longer than it has in the past.

The current crisis aside, this change has not happened because recessions themselves are longer. Nor has it occurred because recessions are deeper than in the past. Instead this change is the result of slower economic growth following the end of a recession. And slower growth means longer recoveries.

As shown below, the four longest recoveries in recent history, as measured by the number of months it took until the economy recovered all of the jobs lost during the recession, also have been the four most ... More >

China: The sleeper awakens (part 1 of 5)

Steve Blank — Thu, 11 Apr 2013 12:28:41 +0000

I just spent a few weeks in Japan and China on a book tour for the Japanese and Chinese versions of the Startup Owners Manual.

In this series of 5 posts, I thought I’d share what I learned in China. My post about Japan will follow. All the usual caveats apply. I was only in China for a week so this a cursory view. Thanks to Kai-Fu Lee of Innovation Works, David Lin of Microsoft Accelerator, and my publisher China Machine Press.

Summary: I’ve lived in Silicon Valley for 35 years, I’ve taught in entrepreneurial clusters in New York, Boston, Helsinki, Santiago Chile, St. Petersburg, Moscow, ... More >

What immigration reform could mean for American workers, and why the AFL-CIO is embracing it

Robert Reich — Wed, 03 Apr 2013 17:39:11 +0000

Their agreement is very preliminary and hasn’t yet even been blessed by the so-called Gang of Eight Senators working on immigration reform, but the mere fact that AFL-CIO President Richard Trumka and Chamber of Commerce President Thomas J. Donohue agreed on anything is remarkable.

The question is whether it’s a good deal for American workers. It is, and I’ll explain why in a moment.

Under the agreement (arrived at last weekend) a limited number of temporary visas would be issued to foreign workers in low-skilled occupations, who could thereafter petition to become American citizens.

The agreement is an important step toward a comprehensive ... More >

Wealth and motivations for saving

Carola Binder — Mon, 25 Mar 2013 02:56:03 +0000

In a recent column in the Atlantic called “Building the Wealth of the Poor and Middle Class,” Noah Smith suggests a few ways to improve the unequal distribution of wealth in America. He notes that “one obvious thing we could do to make wealth more equal is – surprise! -redistribution…Giving the poor and middle-class more income will boost the amount they are able to save, the percentage they are willing to save, and the return they get on those savings. Part of the reason America’s wealth distribution is so unequal in the first place is that our income distribution is very unequal.” ... More >

Bob Evenson: An economist with heart

David Zilberman — Sat, 16 Mar 2013 20:50:51 +0000

Recently I learned one of my dear colleagues, Bob Evenson from Yale University, passed away. Bob grew up on a farm in the Minnesota and got his PhD at the University of Chicago. He became a leading development economist, and taught for more than 30 years mostly at Yale.

My early impressions, as a student in Israel and in Berkeley, was that Chicago economics and development were an oxymoron. Chicago economists were supposed to be free-market, cold-hearted creatures that only cared about efficiency. Bob was actually the opposite of this stereotype: he really cared about people, and no matter who you ... More >

The Great Recession and preferences for redistribution

Carola Binder — Mon, 04 Mar 2013 19:26:33 +0000

Differences in attitudes towards welfare and redistribution are an important source of political tension, especially during recessions. What factors shape people’s attitudes towards welfare and redistribution?

There are two main strands of thought on this question in the literature. One strand emphasizes economic self-interest as a key determinant of attitudes toward welfare and distribution. According to this view, people’s position in the labor market, exposure to layoff risk, and ﬁnancial status are the main factors determining their attitudes. Another strand emphasizes different ideological dispositions on issues such as fairness, equality, and the role of government.

It is empirically difficult to distinguish between ... More >

Crazy enough to change the world

Steve Blank — Tue, 19 Feb 2013 18:19:09 +0000

“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.“

— Steve Jobs, Stanford University commencement speech, 2005

Last week one of our mentors abruptly resigned from coaching one of the Lean LaunchPad student teams after claiming the students were ignoring his practical advice ... More >

Austerity: Kind of a drag

Sylvia Allegretto — Tue, 12 Feb 2013 23:59:40 +0000

“Start with a basic point: Slashing government spending destroys jobs and causes the economy to shrink.” –from New York Times columnist Paul Krugman (2/8/13).

Krugman, I and others have cautioned against austerity for years. It simply never made any sense to make an already weak economy weaker by slashing government spending before having a sustained and robust recovery. But, as job losses were mounting to post-depression unprecedented highs, the deficit hawks swept in. They ignored all that we know about economic theory and practice and pivoted from the real crisis of jobs to the presently non-threatening issue of government deficits and ... More >