Economics is all demand and supply. The general supply and demand balance each other, otherwise you will have a strong force to the two close to each other. However, the U.S. unemployment rate stayed high, meaning that the nature of supply and demand issues emerged: the aggregate demand is too low, or the supply of a problem?
Obama seems to think that problems in the area of demand, so a second stimulus measures through tax cuts and government spending while increasing the transfer, so as to stimulate consumption and investment. The Fed also have similar ideas, not only short-term interest rates down to a minimum, and to take control of long-term interest rate risk policy.
foreign Johnson Zaibao stop large-scale recalls the warm state forest behind the taking of 23 million subsidy allegedly left Enron: Bank This is why the economic recovery smart
has started, these policies failed to inhibit the unemployed? Reformist economists said the stimulus package has been successfully prevented a more serious recession, but these measures are too binding the hands and can not bring about a strong recovery.
respond to conservative economists, it is because the government is so wasteful of taxpayer money, which leads to fear of future tax increases American family adopts a lower profile and increase savings. In addition, more radical and enable corporations to government regulatory and tax measures to the future was unsettled, so do not want to invest.
both views have some truth. For the relief of unemployment, state aid and government spending in some projects it is possible to avoid a more painful recession, but the high deficit that is deeply worried about American families, after they tried to recede in the consumer frenzy reduce debt and re savings. Regulation of health care and other fields make it difficult to make long-term variable not only investment decisions, but also enable enterprises to establish long-term employment relationship is difficult.
, however, can not wait to judge the current policy, we should be on the recent U.S. economic recovery, the slow growth of employment has a clear understanding of the problem.
1960 年 to 1991, the United States generally recover quickly from the economic recession. Counting from the bottom of the economic recovery, an average of eight months to return to previous employment. 1991 to 2001 recession recovery process very difficult. For example, in 2001, only three months output recovery, employment recovery has spent 38 months.
caused by many reasons for this result. Some economists suggested that the previous recession temporarily lay off workers, recovery and re-employment is different from the abolition of 1991 posts a more long-term. Enterprises have been dragged before a recession no commercial value, the decision to close factories and lay off workers, increase the impact of the recession. This led to unemployed workers forced to change jobs to find work, so need more time and more training.
no matter what the correct interpretation of the recent economic recession, history suggests that the employment recovery will take time. However, the problem one way, the difference with the past is the large number of unemployed construction workers. This is another side to explain why employment growth has always been tepid, but also for policy decision gives a useful inspiration.
construction jobs in the boom before the significant increase in the GDP share of real estate investment from 1997 to 2006 increased by 50%. As my colleague Erik Hurst and its partners revealed that, from 2000 to 2006 GDP share of construction employment in the fastest-growing states from 2006 to 2009 is also the most severe contraction of these states in 2006 to 2009 and most dramatic changes in the unemployment rate.
hard to imagine that any increase in aggregate demand will drive the real estate market to re-employ all the staff, but please remember that stability in the appreciation of the real estate market is expected to support the prosperity and development, and today it seems these hopes has been completely shattered. American newspaper magnate Hearst, according to estimates, this In other words, if it is dragged down the construction industry, the U.S. unemployment rate may be only 6.5%, far better than in December 2010 to 9.4%.
policymakers should remember that it was easing monetary policy to promote the prosperity of the real estate market, the United States during the last recession recovery depend on the same success of the policy has pushed the employment rate. In fact, many people leave school without any technology in the construction trades, leading to the Las Vegas high school graduation rate was significantly reduced. Now these uneducated unemployed than college graduates have to face more than twice the unemployment rate. Very difficult for them to find suitable jobs.
policy makers should learn the lesson is clear: its hard to stimulate demand again and again, leaving a lot of potential problems to the future, it would be better to improve the long-term employment of unemployed persons approach focuses on the promotion of especially for those who labor in the construction related industries. Ultimately, a more benign labor supply will create a healthier and more long-term needs.
Booth of the University of Chicago Business School finance professor
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