Joseph E. Stiglitz's Blog, page 9

America’s GDP fetishism is a rare luxury in an age of vulnerability

Traditional measures seem more abstract than ever as they fail to recognise the struggles of wage-earners in the real world

Two new studies show, once again, the magnitude of the inequality problem plaguing America. The first, the US Census Bureau’s annual income and poverty report, shows that, despite the economy’s supposed recovery from the recession, ordinary Americans’ incomes continue to stagnate. Median household income, adjusted for inflation, remains below its level a quarter-century ago.

It used to be thought that America’s greatest strength was not its military power but an economic system that was the envy of the world. But why would others seek to emulate an economic model by which a large proportion – even a majority – of the population has seen their income stagnate while incomes at the top have soared?

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Americas GDP fetishism is a rare luxury in an age of vulnerability

Traditional measures seem more abstract than ever as they fail to recognise the struggles of wage-earners in the real world

Two new studies show, once again, the magnitude of the inequality problem plaguing America. The first, the US Census Bureaus annual income and poverty report, shows that, despite the economys supposed recovery from the recession, ordinary Americans incomes continue to stagnate. Median household income, adjusted for inflation, remains below its level a quarter-century ago.

It used to be thought that Americas greatest strength was not its military power but an economic system that was the envy of the world. But why would others seek to emulate an economic model by which a large proportion even a majority of the population has seen their income stagnate while incomes at the top have soared?

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Austerity has been an utter disaster for the eurozone

All of the suffering in Europe inflicted in the service of a man-made artifice, the euro is even more tragic for being unnecessary, writes Joseph Stiglitz

If the facts dont fit the theory, change the theory, goes the old adage. But too often it is easier to keep the theory and change the facts or so German chancellor Angela Merkel and other pro-austerity European leaders appear to believe. Though facts keep staring them in the face, they continue to deny reality.

Austerity has failed. But its defenders are willing to claim victory on the basis of the weakest possible evidence: the economy is no longer collapsing, so austerity must be working! But if that is the benchmark, we could say that jumping off a cliff is the best way to get down from a mountain; after all, the descent has been stopped.

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Capitalism needs new rules to restore the growth and stability of postwar era | Joseph E Stiglitz:

Simple political changes can reverse the decades of growing inequality wrought by Reaganism and Thatcherism, writes Joseph Stiglitz

The reception in the US, and in other advanced economies, of Thomas Piketty's recent book Capital in the Twenty-First Century attests to growing concern about rising inequality. His book adds further weight to the overwhelming body of evidence concerning the soaring share of income and wealth at the very top.

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Argentina default? Griesafault is much more accurate | Joseph E Stiglitz and Martin Guzman

This was the first time in history that a country was willing and able to pay its creditors but was blocked by a judge Thomas Griesa from doing so

On 30 July Argentina's creditors did not receive their semi-annual payment on the bonds that were restructured after the country's last default in 2001. Argentina had deposited $539m (£320m) in the Bank of New York Mellon a few days before. But the bank could not transfer the funds to the creditors: US federal judge Thomas Griesa had ordered that Argentina could not pay the creditors who had accepted its restructuring until it fully paid including past interest those who had rejected it.

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Australia should not follow the American path to inequality | Joseph Stiglitz

Does Tony Abbott's government understand what deregulation and liberalisation have done to the US economy, asks Joseph Stiglitz

For better or worse, economic policy debates in the United States are often echoed elsewhere, regardless of whether they are relevant. Australian prime minister Tony Abbott's recently elected government provides a case in point.

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Why learning matters in an innovation economy | Joseph Stiglitz

Viewing economic policies through the lens of learning provides a different perspective on many issues, writes Joseph Stiglitz

Citizens in the world's richest countries have come to think of their economies as being based on innovation. But innovation has been part of the developed world's economy for more than two centuries. Indeed, for thousands of years, until the Industrial Revolution, incomes stagnated. Then per capita income soared, increasing year after year, interrupted only by the occasional effects of cyclical fluctuations.

The Nobel laureate economist Robert Solow noted some 60 years ago that rising incomes should largely be attributed not to capital accumulation, but to technological progress to learning how to do things better. While some of the productivity increase reflects the impact of dramatic discoveries, much of it has been due to small, incremental changes. And, if that is the case, it makes sense to focus attention on how societies learn, and what can be done to promote learning including learning how to learn.

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Medellín's metamorphosis provides a beacon for cities across the globe | Joseph Stiglitz

Once notorious for drug gangs, Colombian city offers lesson in how to create 'liveable cities' in which citizens can flourish and innovate, writes Joseph Stiglitz

Last month, a remarkable gathering occurred in Medellín, Colombia. About 22,000 people came together to attend the World Urban Forum and discuss the future of cities. The focus was on creating "cities for life" that is, on promoting equitable development in the urban environments in which a majority of the world's citizens already live, and in which two-thirds will reside by the year 2050.

The location was symbolic: once notorious for its drug gangs, Medellín now has a well-deserved reputation as one of the most innovative cities in the world. The tale of its transformation holds important lessons for urban areas everywhere.

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China's reformers can triumph again, if they follow the right route

Challenge for leaders is to devise effective regulatory regimes that are health-conscious and appropriate at this stage

No country in recorded history has grown as fast and moved as many people out of poverty as China over the past 30 years. A hallmark of China's success has been its leaders' willingness to revise the country's economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?

China's reformers can triumph again, if they follow the right route | Joseph Stiglitz

Challenge for leaders is to devise effective regulatory regimes that are health-conscious and appropriate at this stage

No country in recorded history has grown as fast and moved as many people out of poverty as China over the past 30 years. A hallmark of China's success has been its leaders' willingness to revise the country's economic model when and as needed, despite opposition from powerful vested interests. And now, as China implements another series of fundamental reforms, such interests are already lining up to resist. Can the reformers triumph again?