Chicago financial economist Raghuram Rajan views communities as the third pillar of liberal democracy.

Jonah Whanau

2019-02-25 12:41:00 Mon ET

Chicago financial economist Raghuram Rajan views communities as the third pillar of liberal democracy in addition to open markets and states. Rajan suggests that communities serve as an indispensable part of a healthy economic society in stark contrast to a key source of market frictions (which may inhibit the smooth operation of the global economy). In recent times, both Brexit and the electoral successes of Donald Trump have shaken the dismal science. Prominent economists begin to consider what can constitute an efficient response to regional economic inequality. For instance, Lawrence Summers and his co-authors empirically demonstrate that both employment subsidies and tax credits should target U.S. regions with more elastic labor participation.

As open markets and states interact with socioeconomic webs of human relations, values, and norms, technological phase shifts tend to rip markets out of those old webs with populist backlashes through human history. Socioeconomic interactions eventually gravitate toward a new equilibrium with a messy and arduous transition. When markets and states scale up, political clout and economic power concentrate in vibrant hubs that prosper to the detriment of peripheral communities. Democracy preserves market competition, and open market competition preserves democracy. Rajan proposes strengthening communities as an antidote to new socioeconomic challenges.

 


If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.

Blog+More

Capital gravitates toward key profitable mutual funds until the marginal asset return equilibrates near the core stock market benchmark.

Peter Prince

2019-07-27 17:37:00 Saturday ET

Capital gravitates toward key profitable mutual funds until the marginal asset return equilibrates near the core stock market benchmark.

Capital gravitates toward key profitable mutual funds until the marginal asset return equilibrates near the core stock market benchmark. As Stanford finance

+See More

House Judiciary Committee summons senior executive reps of the tech titans to assess online platforms and their market power.

Peter Prince

2019-08-18 11:33:00 Sunday ET

House Judiciary Committee summons senior executive reps of the tech titans to assess online platforms and their market power.

House Judiciary Committee summons senior executive reps of the tech titans to assess online platforms and their market power. These companies are Facebook,

+See More

European economic integration seems to have gone backwards primarily due to the recent Brexit movement.

Daisy Harvey

2019-10-19 16:35:00 Saturday ET

European economic integration seems to have gone backwards primarily due to the recent Brexit movement.

European economic integration seems to have gone backwards primarily due to the recent Brexit movement. Brexit, key European sovereign debt, and French and

+See More

Amazon follows Apple to become the second U.S. public corporation to hit $1 trillion stock market valuation.

Dan Rochefort

2018-09-03 09:31:00 Monday ET

Amazon follows Apple to become the second U.S. public corporation to hit $1 trillion stock market valuation.

Amazon follows Apple to become the second American public corporation to hit $1 trillion stock market valuation. Amazon's founder and chairman Jeff Bezo

+See More

Federal Reserve publishes its inaugural flagship financial stability report.

Peter Prince

2018-12-05 09:38:00 Wednesday ET

Federal Reserve publishes its inaugural flagship financial stability report.

Federal Reserve publishes its inaugural flagship financial stability report. Fed Chair Jerome Powell applauds both low inflation (2%) and low unemployment (

+See More

Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir.

Amy Hamilton

2019-03-13 12:35:00 Wednesday ET

Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir.

Uber seeks an IPO in close competition with its rideshare rival Lyft and other tech firms such as Slack, Pinterest, and Palantir. Uber expects to complete o

+See More