Severance Pay: Protecting Workers in a Dynamic or Not So Dynamic Economy

It's often said that the economy is too simple for economists to understand it. Neil Irwin gave us evidence to support this assertion in a NYT column today. The piece both raises the question of whether the economy is too dynamic, or not dynamic enough, and what we can do to protect workers if it is too dynamic.

On the first question, we really don't have to debate much. We have good measure of the economy's dynamism, it's called "productivity growth." Productivity growth measures the increas...