What I Seek to Show

2019 ◽  
pp. 13-17
Author(s):  
Andrew Smithers
Keyword(s):  
Economic Policy ◽  
Total Factor Productivity ◽  
Technological Advance ◽  
Living Standards ◽  
Factor Productivity ◽  
The Us ◽  
Weak Growth ◽  
Policy Measures ◽  
The 1960S ◽  
The Uk

This chapter previews the argument set out in the book. A change in economic policy is essential to prevent a fall in living standards in the UK and the US. Weak growth was the result of changes in demography and productivity, caused by the fall in the birth rate in the 1960s and in investment after the 1980s. We cannot change demography so we must increase investment. Conventional growth theory needs to be revised. Current consensus Total Factor Productivity Models are untestable and thus unscientific. This chapter proposes a revised model which is testable and robust when tested. This shows growth does not just depend on technological advance as it can be boosted by policies that encourage more tangible investment. The distractions that have led to a lack of debate over this are examined and policy measures to revive investment and growth are proposed.

Productivity and the Bonus Culture

2019 ◽  
Author(s):  
Andrew Smithers
Keyword(s):  
Total Factor Productivity ◽  
Liberal Democracy ◽  
Total Population ◽  
Living Standards ◽  
Factor Productivity ◽  
Working Population ◽  
The Past ◽  
The Us ◽  
The Uk ◽  
Investment Growth

Living standards in the UK and the US are in danger of falling. In the past change has brought disruption with the offsetting reward of higher living standards from growth. Today we have disruption without reward. The resulting voter dissatisfaction encourages populist policies which threaten even worse outcomes. The decline in growth has weakened the standing of liberal democracy both at home and internationally. The decline is entirely due to poor productivity combined with an unfavourable change in demography. The UK and the US have changed from having a demographic surplus in which the working population grew faster than the total population to a demographic deficit. Before living standards grew faster than productivity they now grow more slowly. Faster immigration could change demography, but voters are likely to press for less. To avoid falling living standards we must increase the rate at which productivity improves. Faster productivity does not only depend on technology. We can improve it by encouraging more investment. Growth depends on Total Factor Productivity (“TFP”), for which current consensus estimates are based on a faulty model which has induced pessimism about our ability to encourage more growth. The book sets out a revised and superior model of TFP which demonstrates that the weakness in productivity is the result of the bonus culture and suggests ways by which this can be changed so that investment is encouraged and growth returns.

The Legacy of the Financial Crisis

2019 ◽  
pp. 1-12
Author(s):  
Andrew Smithers
Keyword(s):  
Financial Crisis ◽  
Liberal Democracy ◽  
Asset Prices ◽  
Central Banks ◽  
Living Standards ◽  
Policy Makers ◽  
The Us ◽  
Weak Growth ◽  
The Uk ◽  
Post Hoc

The reputation of liberal democracy has fallen not only internationally but even within the UK and the US, which on current policies risk a decline in living standards and an even worse outcome should more to populist policies be implemented. Weak growth followed the financial crisis but was not caused by it. Holding otherwise is an example of the ‘post hoc fallacy’. Weak growth was caused solely by adverse changes in demography and poor productivity. Addressing both economists and the wider audience of those concerned with our economic and political future, this chapter shows that the adverse changes in demography and productivity have causes which predate the financial crisis by many years. The financial crisis was due to poor theory which led central banks to ignore the risks of high asset prices and excess debt. Poor theory today inhibits policy makers from recognizing that bonus culture policy has stifled growth.

The Liberalizers: Justifying Free-Market Finance

2018 ◽  
Author(s):  
Louçã Francisco ◽  
Ash Michael
Keyword(s):  
Public Discourse ◽  
Free Market ◽  
Second World War ◽  
Economic Regulation ◽  
Developed Economies ◽  
The Us ◽  
The 1960S ◽  
The Uk ◽  
Second World ◽  
The New Deal

Chapter 5 traces how free market ideology displaced the apparent consensus on economic regulation that emerged from the Depression, the New Deal, and the Second World War. Viewed as cranks within economics through the 1960s, Milton Friedman and his supporters built an apparatus of ideas, publications, students, think tanks, and rich supporters, establishing outposts in Latin America and the UK. When developed economies faltered in the 1970s, Friedman’s neoliberal doctrine was ready. With citizens, consumers, and workers feeling worked over by monopolies, inflation, unemployment, and taxes, these strange bedfellows elected Reagan in the US and Thatcher in the UK and rolled to power in academia and in public discourse with a doctrine of privatization, liberalization, and deregulation. Friedman, Eugene Fama, and James Buchanan whose radical free market views triumphed at the end of the 1970s are profiled. A technical appendix, “Skeptics and Critics vs. True Believers” explores the economic debates.

Culture and the popular: Introduction to essays in memory of Brian Rigby

2018 ◽  
Vol 29 (4) ◽  
pp. 293-299
Author(s):  
Michael Kelly
Keyword(s):  
Popular Culture ◽  
Cultural Studies ◽  
Cultural History ◽  
Rapid Expansion ◽  
Daily Lives ◽  
The Us ◽  
The 1960S ◽  
The Uk ◽  
French Cultural Studies

This article introduces the special number of French Cultural Studies commemorating the role of Brian Rigby as the journal’s first Managing Editor. It situates his contribution in the emergence of cultural history and French cultural studies during the rapid expansion of higher education from the 1960s in France, the UK, the US and other countries. It suggests that these new areas of study saw cultural activities in a broader social context and opened the way to a wider understanding of culture, in which popular culture played an increasingly important part. It argues that the study of popular culture can illuminate some of the most mundane experiences of everyday life, and some of the most challenging. It can also help to understand the rapidly changing cultural environment in which our daily lives are now conducted.

scholarly journals An Evaluation of the Determinants of Total Factor Productivity Growth in Indian Information Technology Industry: An Application of DEA-based Malmquist Index

2017 ◽  
Vol 1 (4) ◽  
pp. 175
Author(s):  
Prosenjit Das
Keyword(s):  
Information Technology ◽  
Total Factor Productivity ◽  
Random Effects ◽  
Positive Impact ◽  
Returns To Scale ◽  
The Other ◽  
Factor Productivity ◽  
It Industry ◽  
The Us ◽  
Catch Up

Aim: India has emerged as one of the most favoured destinations in the global Information Technology (IT) outsourcing market. On the other hand, the IT industry has been playing an instrumental role in transforming India’s image from a low income-backward nation to a knowledge-based economy.  Furthermore, the role of IT industry has been pivotal in putting India on a higher growth path. In addition, India’s IT industry has been showing robust performance in revenue earning, particularly in export revenue. However, the performance of this industry is likely affected by some recent global phenomena, such as 2008’s subprime crisis originated in the US, uncertainties in changes in H1-B visa rules, Britain’s exit from the EU, automation etc. There are other factors, like exchange rate volatility, emerging competition from other low-cost outsourcing destination countries, are also posing threat to India’s IT-outsourcing business. Against this backdrop, it is crucial to analyse the sustainability of performance of Indian IT industry. Thus, the present study aims at assessing the performance of Indian IT industry and evaluating the determinants of performance thereafter.Design / Research methods: To realize the objectives of the study, firm level data has been collected from the Centre for Monitoring Indian Economy (CMIE) Prowess database. For empirical analysis, we have applied a two-stage method. In the first-stage, we have used Data Envelopment Analysis (DEA) based Malmquist Productivity Index (MPI) to evaluate the Total Factor Productivity Growth (TFPG) of Indian IT industry during the period from 2004-05 to 2014-15. For this purpose, a balanced panel consists of 70 IT firms has been considered. Further, the TFPG has been decomposed into three components, viz. Catch-up, frontier-shift, and scale efficiency change (SEC). Consequently, in the second-stage, three random-effects panel regression models are considered to investigate the determinants of TFPG, catch-up, and frontier-shift separately. Conclusions / findings: During the study period, the average TFP and frontier-shift has been improved. On the other hand, catch up effect is found to have declined. The variables, such as export intensity, salaries and wages intensity have positive and statistically significant impact on the catch-up and frontier-shift. Export intensity has positive impact on TFPG. Age of the firms has positive impact on catch-up and TFPG. Salaries and wages intensity has positive impact on TFPG. On an average, the firms which spent on research and Development (R&D) have experienced improvement in TFPG and frontier-shift. The public limited firms performed better than their private counterparts in terms of catch-up, frontier-shift, and TFPG. The non-group firms have performed better than the group firms in case of catch-up. On the other hand, on an average, the firms exhibiting decreasing Returns to Scale (DRS) are found to have registered deterioration in catch-up and TFPG with respect to the benchmark firms which are exhibiting Constant Returns to Scale (CRS). The firms exhibiting Increasing Returns to Scale (IRS) have shown improvement in catch-up and TFPG over the benchmark CRS firms. The impact of the US subprime crisis has been negative on catch-up, frontier-shift, and TFPG. The firms, which have spent on royalty, have experienced improvement in catch-up and TFPG. Originality / value of the article: So far in our knowledge, not so many studies of this kind have been done in the arena of empirical research pertains to the IT industry, especially in a developing country like India. Moreover, we have not found any study that covers the span of the dataset considered in the present study. In addition to this, the present study has employed a random-effects panel model to accommodate a number of time-invariant dummy variables which would not be possible in case of a fixed-effects panel model incorporated by some previous studies of this genre.Implications of the research: The identification of the determinants of TFPG and its components would help the stakeholders and policy makers of the IT industry to formulate appropriate policies which could mitigate the risks faced by the industry on one hand, and stimulate the forces that would enhance the growth of this industry on the other. For instance, to mitigate future risks, Indian IT industry should reduce its dependence on the US and UK markets. Besides, it should explore new markets in the EU, and other emerging economies where opportunities are plenty. To maintain India’s robust global position in the long run, Government of India should play the key role in providing world class infrastructure and telecommunication facilities to its IT industry. In addition to this, Government needs to rationalise and simplify the existing Indian labour law to facilitate the business of IT industry. Various stakeholders along with the Government should put necessary efforts to develop the domestic IT market as there exists ample of opportunities in future. Keywords: information technology industry, data envelopment analysis, Malmquist productivity index, random-effects model, total factor productivity, catch-up, frontier-shift, India. JEL: C23, C61, L86, O47

Sources of Increasing Inequality

2021 ◽  
pp. 172-190
Author(s):  
Francis Teal
Keyword(s):  
Two Dimensions ◽  
Labour Markets ◽  
Living Standards ◽  
The Political ◽  
Poor Countries ◽  
Unskilled Labour ◽  
The Us ◽  
The Uk ◽  
Rich Countries ◽  
The Impact

While all the evidence we have points to the rising living standards for most of the very poorest, the wages of unskilled labour in poor countries remain a fraction of those in rich countries. Those potential workers are seen as a threat to the living standards of the unskilled in rich countries and the political impetus to limit their access to those labour markets has been, and remains, one of the most potent issue in the politics of rich countries. This aversion to immigration as a threat to the wages of the unskilled often transmutes into a hostility to trade, as goods, which use a lot of unskilled labour, can be imported more cheaply. Both immigration and trade are seen as a threat to the unskilled. Two dimensions of this threat are examined in this chapter—the impact of Chinese exports on wages in the US and the impact of immigration on the UK economy.

The Problem of Income Inequality

2019 ◽  
pp. 42-44
Author(s):  
Andrew Smithers
Keyword(s):  
Income Inequality ◽  
Gini Coefficient ◽  
Living Standards ◽  
Living Standard ◽  
The Gini Coefficient ◽  
The Us ◽  
The Uk ◽  
Distribution Of Income

Living standards change in line with GDP per head only if the distribution of incomes is unchanged. If incomes become less equally distributed the living standards of most people will fall even if GDP per head is stable. The Gini Coefficient is the most widely used indicator designed to measure the distribution of income. UK inequality, on this measure, has risen since 1977, stabilized since 1987, and fallen in recent years. In the US there has been a long-term increase in income inequality. Unless this US trend for increased income inequality halts, it is quite likely that even if GDP per head rises in the US, the living standard of the average voter will fall. The recent data suggest that changes in income inequality pose less of a threat to living standards in the UK then they do to those in the US.

Raising workers' quality is key to global productivity

2017 ◽  
Keyword(s):  
Total Factor Productivity ◽  
Computer Technology ◽  
Factor Productivity ◽  
Content Type ◽  
Information And Computer Technology ◽  
The 1960S ◽  
Investment Growth ◽  
Ageing Populations

Subject Total factor productivity. Significance The first estimates in the 1960s suggested that the growth of labour and capital inputs accounted for 20-30% of economic growth, implying that total factor productivity (TFP) improvements accounted for the remaining 70-80%. However, the skills embodied in labour and the technology embodied in capital can now be measured much more accurately. After these contributions are subtracted, the role of TFP in growth is reduced. Impacts Improvement in the quality of capital is closely tied to rising investment in capital, especially information and computer technology. If investment growth continues to slow, this will affect future output both through the volume of capital as well as its productive quality. Ageing populations and persistent ultra-low rates raise ‘secular stagnation’ fears; the future will depend on a better-educated workforce.

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