While most labor market indicators point to an economy near full employment, a notable exception is the sluggish rise of wages. However, this slow wage growth likely reflects recent cyclical and secular shifts in the composition rather than a weak labor market. In particular, while higher-wage baby boomers have been retiring, lower-wage workers sidelined during the recession have been taking new full-time jobs. Together these two changes have held down measures of wage growth.
Perhaps the only surprise about the populist backlash that has overwhelmed
many advanced democracies' politics is that it has taken so long. Even two
decades ago, it could be predicted that mainstream politicians' refusal to offer
remedies to the side effects of a hyper-globalized age would create political
space for demagogues.
China has just announced that last year, for the first time since it began
opening up its economy to the world at the end of the 1970s, exports declined on
an annual basis. And that is not all; in value terms, global trade declined in
Parallels are often drawn between the Great Recession of the past decade and the economic turmoil of the interwar period. In terms of global trade, these comparisons are based on obsolete and incomplete data. This column re-estimates world trade since the beginning of the 19th century using a new database that includes fewer developed countries. The effect of the Great Recession on trade growth is sizeable but fairly small compared with the joint effect of the two world wars and the Great Depression. However, the effects will become more and more comparable if the current trade stagnation continues.
In 1936, John Maynard Keynes's magnum opus, The General Theory of Employment,
Interest and Money, was published. How much of Keynes's theory, which
revolutionized the way policymakers approached economic problems, still holds