Your * explanations in general involve some systemic changes, which doesn’t jive with the abrupt and dramatic shock seen in the 2007-2009 data. Any explanation of what is currently happen that doesn’t tie into the obvious business cycle seems to lack the necessary explanatory power.
I don’t doubt that some or all of those systemic issues are driving long term trends (for instance I know dozens of phds who WANT to be working on next-gen power generation but are instead in banking or finance because no one would hire them to do anything else. This obviously has an effect on the mix of employment sectors but that shouldn’t necessarily mean lower employment), but there is an abrupt and sudden shock in the data. The fact that its happening in multiple countries at once makes it harder to blame regulatory environments.
The notion would be that the aggregate demand shock / overly tight money allowing NGDP collapse due to the shadow banking collapse produced the Great Recession and the sharp employment drop. And then these other long-term trends meant that re-employment was broken afterward as NGDP rose again, a tendency already noted in the ‘jobless recovery’ after the 2001 recession.
I think its worth noting here that NGDP never had “catch-up” growth, its still far below the previous trend, and the output gap is closing very slowly. So the simple explanations that tie NGDP growth to job growth don’t have to break to establish the type of “jobless” recovery we are still seeing. Okun’s law has been holding pretty well throughout the great recession.
And the reason that you don’t include increasing automation in with these other trends is that you don’t see the automation situation as materially different from a few decades ago, unlike the other factors. Yes?
Your * explanations in general involve some systemic changes, which doesn’t jive with the abrupt and dramatic shock seen in the 2007-2009 data. Any explanation of what is currently happen that doesn’t tie into the obvious business cycle seems to lack the necessary explanatory power.
I don’t doubt that some or all of those systemic issues are driving long term trends (for instance I know dozens of phds who WANT to be working on next-gen power generation but are instead in banking or finance because no one would hire them to do anything else. This obviously has an effect on the mix of employment sectors but that shouldn’t necessarily mean lower employment), but there is an abrupt and sudden shock in the data. The fact that its happening in multiple countries at once makes it harder to blame regulatory environments.
The notion would be that the aggregate demand shock / overly tight money allowing NGDP collapse due to the shadow banking collapse produced the Great Recession and the sharp employment drop. And then these other long-term trends meant that re-employment was broken afterward as NGDP rose again, a tendency already noted in the ‘jobless recovery’ after the 2001 recession.
I think its worth noting here that NGDP never had “catch-up” growth, its still far below the previous trend, and the output gap is closing very slowly. So the simple explanations that tie NGDP growth to job growth don’t have to break to establish the type of “jobless” recovery we are still seeing. Okun’s law has been holding pretty well throughout the great recession.
And the reason that you don’t include increasing automation in with these other trends is that you don’t see the automation situation as materially different from a few decades ago, unlike the other factors. Yes?