Webtagr - Technology News Summarizer

The Great US Wage Stagnation (1973-1994): An Unexplained Mystery

2025-05-19

This post explores the causes of the US wage stagnation from 1973 to 1994. The author refutes the idea that globalization caused this stagnation, arguing that NAFTA and China's WTO entry had limited impact. The earlier stagnation period (1973-1994) coincides with a decline in productivity, but its root cause remains unclear. The article analyzes various potential factors, including inflation, de-unionization, financialization, and competition from European and Japanese trade, but none fully explain the two-decade-long wage stagnation. The author suggests it might be a combination of factors, but a simpler explanation is needed to solve this puzzle.

Debunking the Myth: Did Globalization Really Hollow Out the American Middle Class?

2025-05-08

This article challenges the popular narrative that globalization and trade deficits led to the decline of American manufacturing and the hollowing out of the middle class. While acknowledging the negative impact of the China shock on some manufacturing workers, the author argues that its effects have been exaggerated. American middle-class income has actually been growing, and the decline in manufacturing's share of GDP is attributed to multiple factors beyond trade deficits. The author calls for a more nuanced perspective on trade and industrial policy, urging readers to avoid being misled by a flawed narrative.

Econ Reporters Are Consistently Wrong About Imports and GDP

2025-05-03

Almost all economics reporters make a simple mistake: claiming that imports subtract from GDP. In reality, GDP measures production within a country's borders; imports are produced elsewhere. While imports affect net exports, their impact on consumption or investment offsets this, resulting in no net effect on GDP. This error likely significantly influenced US economic policymaking, such as tariffs based on a misunderstanding. The author suggests that while an import surge may coincide with a GDP drop, this is likely due to measurement error, businesses diverting resources from domestic purchases to import stockpiling, or imports obscuring the forecasting picture, not because imports themselves reduce GDP.