In this blog written by Bruce Bartlett, many of the concepts in class are touched on in some sort of matter. He begins by stating the problem "that economists always have in analyzing the economy is separating cyclical effects, which are temporary, from structural effects, which have long-term implication." So I first pose the question, from what we have learned in class, which effect played a larger role in the 2008 Global financial crisis?
Bartlett also touches on the fact that cyclical and structural unemployment are both problems and that automation is leading to more and more unemployment problems today. With this being said, I am wondering if outsourcing jobs is a larger problem today or automation within our country is a larger problem within the job market?
It is a very intereting article. It is clear that the world is changing day-to-day. The technology, such as computers robots and so, are replaced worker tasks. Therefore, if the workers are not retrained, they may not have the skills to get a new job. Nowadays, US, Japan,and so forth are aheading those troubles. According to Nina Kolyako, the structural reforms will be crucial to strengthening the employment market. The controversy regarding appropiate solutions for improving this situation is questionable. The government stimuluos, for example, is one alternative. However, the fiscal cliff have taken precedence since 2012 and eary 2013.
ReplyDeleteThe standard "economisty" response to people who fear technology causing unemployment is to dismiss the worrier as a luddite and then pont out that over the past three hundred years we've gone from ploughs to airplanes without a sustained, systemic increase in unemployment. However, I have seen more economists lately acknowledging the possibility that the nature of technological advances has been changing, and may start making human labor obsolete. The most common source of this fear is that labor's share of income compared to capital has been unexpectedly declining over the last ten years or so (normally it stays steady at about 2/3, it's dropped to about 60%). For example, here's Noah Smith talking about an ideal system of redistribution in a world where robots have largely replaced humans.
ReplyDeleteMyself, I think the fears are unfounded. I think we'll continue to see people shift into the service sector, make/repair machines, and program machines. Human beings want a lot of things, I'm sure we'll always find something that another human can do for money.
I appreciate that Bartlett highlighted the importance of identifying cyclical verses structural problems are the policies used to fix them. If the wrong situation is interpreted, a counterproductive policy can be implemented.
ReplyDeleteIn regards to Carter’s questions, I believe the deregulation in mortgage banking and investing coupled with the real estate boom and America’s willingness to buy on credit is the cause for the 2008 financial crisis. I do not think automation had a role in the financial crisis, but do believe it is costing jobs in today’s struggling economy. I believe automation is a larger problem than outsourcing. With that being said both give us an opportunity to create higher quality jobs in the United States through advances in science and technology.