APRIL 6 2017

Alex Tuckett, BoE: Does productivity drive wages? Evidence from sectoral data. Since 2008, aggregate productivity performance in the UK has been substantially worse than in the preceding eight years. Over the same period, aggregate real wage growth has also been significantly lower – it has averaged -0.4% per annum from 2009-16, compared with 2.3% per annum from 2000-08. Rather than a simple and clean link from productivity to wages, the industry level data point to a richer and more multi-directional relationship between productivity and wages. Productivity growth is linked to wages, but the relationship may go both ways, and the link between productivity and real wages may operate through prices as much as nominal wages.

Matthew C Klein, FT:  How America made Scandinavian social democracy possible. The researchers suggest the migration flows, which were small relative to the native population of America but equivalent to about 25 per cent of the total population of Scandinavia, changed the character of Norwegian and Swedish society by removing the most ambitious and independently-minded people. In other words, Scandinavian social democracy might not be possible without America’s historic willingness to absorb those who refused to follow the “Law of Jante”. The methodology centres on names. Psychologists have long found that people with relatively rare names are more likely to be “unique”, presumably because parents who consciously choose rare names for their children would be more likely to raise them to be nonconformists.

Thomas Piketty, Emmanuel Saez, Gabriel Zucman, VOX: Economic growth in the US: A tale of two countries. One major problem is the disconnect between macroeconomics and the study of economic inequality. In a recent paper, we attempt to create inequality statistics for the US that overcome the limitations of existing data by creating distributional national accounts. First, our data show that the bottom half of the income distribution in the US has been completely shut off from economic growth since the 1970s. Because the pre-tax incomes of the bottom 50% stagnated while average national income per adult grew, the share of national income earned by the bottom 50% collapsed from 20% in 1980 to 12.5% in 2014. Over the same period, the share of incomes going to the top 1% surged from 10.7% in 1980 to 20.2% in 2014.

Bruce Sacerdote, NBER: Fifty Years of Growth in American Consumption, Income, and Wages. Nearly every week Americans are greeted with headlines such as “Millennials Earn Less Than Their Parents,” “America’s Productivity Climbs But Wages Stagnate,” and “For Most Workers, Real Wages Have Barely Budged For Decades.” Despite the large increase in U.S. income inequality, consumption for families at the 25th and 50th percentiles of income has grown steadily over the time period 1960-2015. Among households with below median incomes, the number of cars per household has risen from 1 to 1.6 during 1970-2015. And median square footage in these families’ homes has risen about 8%. Consider consumption measured in 2015 dollars among two person households with below median income. I find a 62 percent increase in consumption during 1960 to 2015. This calculation uses the CPI and almost surely does not fully include increases in the quality of goods and services. After adjusting CPI for the bias estimated by Hamilton (1998) and Costa (2001), I calculate a 164% increase in consumption for these households.

Nikolai Stähler, Deutsche Bundesbank: A model-based analysis of the macroeconomic impact of the refugee migration to Germany. In summary, this paper finds that measures that cause the migrant qualification structure to closely match that of the native population over the long term do not lead to GDP and consumption losses, which seems to be a useful reference point, while a partial or total failure to close the skills gap can very well have negative economic consequences in terms of wage and consumption losses as well as higher unemployment. A failure to integrate about 800,000 migrants (equivalent to 1% of initial German population) could reduce per capita output and consumption by 0.43% and 0.48%, respectively, while integration measures that improve the qualification structure in Germany could even yield per capita output and consumption gains of 0.34% and 0.38%, respectively.

Andrea Guariso, Thorsten Rogall, VOX: About ethnic conflicts, inequality, and rainfall in Africa. There is a lively debate about the role of inequality as a trigger of ethnic conflicts. This column reports groundbreaking research into the effect of the amount of regional rainfall on crops, which is used to measure inequality between ethnic groups. Inequality caused by the weather's effect on crops has a large and significant impact on the prevalence of ethnic conflict. This effect is strongest when a lack of rainfall penalises ethnic groups with no access to power.

Indra de Soysa, Ann Kristin de Soysa, Journal of International Interactions: Do Globalization & Free Markets Drive Obesity Among Children and Youth? An Empirical Analysis, 1990-2013. Scholars of public health identify globalization as a major cause of obesity. Free markets are blamed for spreading high calorie, nutrient-poor diets and sedentary lifestyles across the globe. Global trade and investment agreements apparently curtail government action in the interest of public health. Globalization is also blamed for raising income inequality and social insecurities, which contribute to ‘obesogenic’ environments. Contrary to recent empirical studies, this study demonstrates that globalization and several component parts, such as trade openness, FDI flows, and an index of economic freedom reduce weight gain and obesity among children and youth, the most likely age cohort to be affected by the past three decades of globalization and attendant lifestyle changes. The results suggest strongly that local-level factors possibly matter much more than do global-level factors for explaining why some people remain thin and others put on weight.

Stacy Liberatore, Dailymail: 'Pooper-scooper' drone cleans up dog poo so you don't step in it. A Dutch startup is set to release a fleet of 'drones' to combat the 220 million pounds of dog droppings left on the Netherlands' streets each year. Called Dogdrones, the vehicles will work together as a team to detect and scoop up the poop. The aerial drone is fitted with cameras and thermal energy technology that transmits GPS coordinates of the feces to a rolling robot on the ground that immediately leaves its hub to clean up the waste.