An important election will be held this weekend in Italy. The center-left and center-right parties seem to be getting the plurality of support, which leaves the center, led by the current Prime minister, Mario Monti, in the role of kingmaker. It is a tight contest, however, and one of the outcomes, the return of Silvio Berlusconi on the center-right, would have highly problematic consequences for the willingness of Italy to continue the austerity programs which have somewhat calmed the eurozone as of late. There could be rough seas ahead for Europe.
One of the central tenets of neoclassical economics is that free trade benefits everyone because of the greater efficiency brought about by comparative advantage. A new study, however, suggests that this proposition may not always be true, and that, in particular, it is definitely not true in the case of US-China trade. We will have to see how well this study stands up to close scrutiny.
One of the mysteries of the recovery from the Great Recession is the slowness of job recovery: why aren’t jobs being created at a rate consistent with previous recoveries? One partial answer is that the jobs are being taken by robots, and not human beings. That means that things will still be produced, but that people may not have the incomes to buy them. Which means that the recovery will be interminable. Not a happy conclusion.
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