Purchasing power

About: Purchasing power is a research topic. Over the lifetime, 2714 publications have been published within this topic receiving 36866 citations. The topic is also known as: adjusted for inflation.

Cadrisme within a Post-Keynesian Model of Growth and Distribution

Abstract: The 1990s, especially in the United States, witnessed an unprecedented change in income distribution, with a large redistribution towards rentiers on the one hand, and towards the upper ranks of the managerial bureaucracy on the other hand, as became ever more obvious after the financial scandals affecting large corporations such as Enron and Worldcom This has also been accompanied by large capital gains that benefited top-file managers as well as shareholders Ordinary employees and workers, as a counterpart, have seen their real purchasing power stagnate Despite all this, and in contrast to the predictions of the canonical Kaleckian growth model, many countries achieved respectable growth rates of capital and output The purpose of the present paper is to explain this paradox and to provide a consistent post-Keynesian model of growth that would model the main features identified above, making a distinction between managerial labour, basically overhead labour, and workers, essentially direct labour – a

Global Development Finance projects slow growth for 1999

Abstract: The growth prospects of developing countries have worsened over the past six months, world trade growth has slowed, capital flows are unlikely to recover to pre-crisis levels in the near term, and, commodity prices are weak. This note reviews the reduced access to international capital flows by most emerging countries, as a result of the financial crises, while dollar export prices for developing countries fell eleven percent in 1998, with both primary commodities, and manufactures suffering. As a result, world trade fell one percent in current dollars in 1998, the first decline since 1993, while global trade volume in goods, grew only four to five percent in 1998, the slowest advance since 1992, barely half the performance in 1997. The note provides an outlook for developing regions, with expected differences in performance between regions, noting significant downside risks to even this somber outlook, and, predicts potential revival of protectionist sentiments in the United States, and Europe, should economic activity contract.

False Alarmism: Technological Disruption and the U.S. Labor Market, 1850–2015

Abstract: This report reviews U.S. occupational trends from 1850 to 2015, drawing on Census data compiled by the University of Minnesota’s demographic research program, the Minnesota Population Center, to compare the changes in occupational job levels from decade to decade. We also assign a code to each occupation to judge whether increases or decreases in employment in a given decade were likely due to technological progress or other factors. Overall, three main findings emerge from this analysis. First, contrary to popular perception, rather than increasing over time, the rate of occupational churn in recent decades is at the lowest level in American history — at least as far back as 1850. Occupational churn peaked at over 50 percent in the two decades from 1850 to 1870 (meaning the absolute value sum of jobs in occupations growing and occupations declining was greater than half of total employment at the beginning of the decade), and it fell to its lowest levels in the last 15 years — to around just 10 percent. When looking only at absolute job losses in occupations, again the last 15 years have been comparatively tranquil, with just 70 percent as many losses as in the first half of the 20th century, and a bit more than half as many as in the 1960s, 1970s, and 1990s. Second, many believe that if innovation only accelerates even more then new jobs in new industries and occupations will make up for any technology-created losses. But the truth is that growth in already existing occupations is what more than makes up the difference. In no decade has technology directly created more jobs than it has eliminated. Yet, throughout most of the period from 1850 to present, the U.S. economy as a whole has created jobs at a robust rate, and unemployment has been low. This is because most job creation that is not explained by population growth has stemmed from productivity-driven increases in purchasing power for consumers and businesses. Such innovation allows workers and firms to produce more, so wages go up and prices go down, which increases spending, which in turn creates more jobs in new occupations, though more so in existing occupations (from cashiers to nurses and doctors). There is simply no reason to believe that this dynamic will change in the future for the simple reason that consumer wants are far from satisfied. Third, in contrast to the popular view that technology today is destroying more jobs than ever, our findings suggest that is not the case. The period from 2010 to 2015 saw approximately 6 technology-related jobs created for every 10 lost, which was the highest ratio — meaning lowest share of jobs lost to technology — of any period since 1950 to 1960. Many believers in the inaccurately named so-called “fourth industrial revolution” will argue that this relative tranquility is just the calm before a coming storm of robot- and artificial-intelligence-driven job destruction. But projections based on this view — including from such venerable sources as the World Economic Forum and Oxford University — are either immaterial or inaccurate. Policymakers should take away three key points from this analysis: 1. Take a deep breath, and calm down. Labor market disruption is not abnormally high; it’s at an all-time low, and predictions that human labor is just one tech “unicorn” away from redundancy are likely vastly overstated, as they always have been. 2. If there is any risk for the future, it is that technological change and resulting productivity growth will be too slow, not too fast. Therefore, rather than try to slow down change, policymakers should do everything possible to speed up the rate of creative destruction. Otherwise, it will be impossible to raise living standards faster than the current snail’s pace of progress. Among other things, this means not giving in to incumbent interests (of companies or workers) who want to resist disruption. 3. Policymakers should do more to improve labor-market transitions for workers who lose their jobs. That is true regardless of the rate of churn or whether policy seeks to retard or accelerate it. Likewise, it doesn’t matter whether the losses stem from short-term business-cycle downturns or from trends that lead to natural labor-market churn. While this report lays out a few broad proposals, a forthcoming ITIF report will lay out a detailed and actionable policy agenda to help workers better adjust to labor-market churn.

Backing Theories and the Currencies of Eighteenth-Century America: A Comment

Abstract: Recently, a newly fashionable theory-the backing theory-has been used to explain the purchasing power of paper money during a number of historical episodes. The terminology is unfortunate, because the theory is different from traditional theories of backing. The backing referred to by the new theory consists of government tax revenues plus other government assets, not the traditional commodity backing. Accordingly, the new backing theory holds that the purchasing power of money is determined by government fiscal policy.' The new backing theorists claim that the price level will not be affected by changes in the quantity of money provided appropriate fiscal policies are followed. The theory has been used by Bruce Smith and Elmus Wicker to explain the purchasing power of American colonial currencies, and by Charles Calomiris, in a recent article in this JOURNAL, to explain the purchasing power of the continental currency issued during the American Revolution.2 The purpose of this comment is to address a new twist Calomiris has given to the backing theory, to review the evidence he presents, and to show some points of similarity between the colonial and revolutionary episodes. My position is that the backing theory has little or no explanatory value when applied to either the American colonial or revolutionary periods.3 Smith, Wicker, and Calomiris conclude that changes in prices were largely unrelated to changes in the money supply, but they overlook two important institutional facts. First, the measures of the money supply used by all three are seriously flawed. In the case of colonial America, the money supply data do not accurately measure even the amount of paper money in circulation

Labor market for health workers in Africa : new look at the crisis

Abstract: Sub-Saharan Africa has only 12 percent of the global population, yet this region accounts for 50 percent of child deaths, more than 60 percent of maternal deaths, 85 percent of malaria cases, and close to 67 percent of people living with HIV. Sub-Saharan Africa, however, has the lowest number of health workers in the world-significantly fewer than in South Asia, which is at a comparable level of economic development. The Labor Market for Health Workers in Africa uses the analytical tools of labor markets to examine the human resource crisis in health from an economic perspective. Africa's labor markets are complex, with resources coming from governments, donors, the private sector, and households. Low numbers of health workers and poor understanding of labor market dynamics are major impediments to improving health service delivery. Yet some countries in the region have developed innovative solutions with new approaches to creating a robust health workforce that can respond to the continent's health challenges. As Africa grows economically, the invaluable lessons in this book can help build tomorrow's African health systems.