MIT professor and co-author Daron Acemoglu suggests that economic prosperity comes from high-wage job creation.

Fiona Sydney

2019-05-19 19:31:00 Sun ET

MIT professor and co-author Daron Acemoglu suggests that economic prosperity comes from high-wage job creation. Progressive tax redistribution cannot achieve the same economic gains that would result from more high-skill employment. The government should promote better tech advances and labor market institutions to empower workers through higher education systems. Also, the government should encourage firms to deploy better technology to boost real wage growth and labor productivity. The government can increase product market competition such that firms cannot charge monopoly prices without hiring more workers. Meanwhile, the current institutional architecture depresses U.S. private-sector wage growth (2.5% per annum from 1947 to 2000 and almost nil thereafter). In this negative light, the government should raise the U.S. tax-revenue-to-GDP ratio from 27% to the 35% OECD benchmark. The incremental fiscal intake can help ensure higher wages for tech-savvy high-skill workers.

Moreover, the government has to set clear rules with respect to tech market power, privacy, and content curation. Recent examples include the E.U. fines on Google for online search market dominance, Facebook-Cambridge-Analytica data breach, and Amazon premium user surveillance via Alexa-and-Echo artificial intelligence. These rules may entail plausible penalties on foreign interference in U.S. elections, privacy invasion, and the viral distribution of inappropriate content etc.

 


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Warren Buffett offloads a few stocks from the Berkshire Hathaway portfolio in November 2018.

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President Trump ramps up 25% tariffs on $200 billion Chinese imports soon after China backtracks on the Sino-U.S. trade agreement.

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Chicago finance professor Raghuram Rajan suggests that free markets need populist support against an unholy alliance of private-sector and state elites.

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The Chinese Xi administration may choose to leverage its state dominance of rare-earth elements to better balance the current Sino-U.S. trade war.

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2019-06-13 10:26:00 Thursday ET

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President of US-China Business Council Craig Allen states that a trade deal should be within reach if Trump and Xi show courage at G20.

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2019-07-15 16:37:00 Monday ET

President of US-China Business Council Craig Allen states that a trade deal should be within reach if Trump and Xi show courage at G20.

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Anat Admati and Martin Hellwig raise broad critical issues about bank capital regulation and asset market stabilization.

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2023-06-07 10:27:00 Wednesday ET

Anat Admati and Martin Hellwig raise broad critical issues about bank capital regulation and asset market stabilization.

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