An economics, investment, trading and policy blog with a focus on Modern Monetary Theory (MMT). We seek the truth, avoid the mainstream and are virulently anti-neoliberalism.
Won't work beyond NAIRU.....
Will if productivity rate keeps pace with growth rate or leads it.The problem for the US now is declining productivity rate.
Tom-If workers are cheaper than machines, how the hell do we increase worker productivity more quickly?High labor costs (and a restriction of outsourcing) can lead to capital investment with the goal of increasing worker productivity whereas low labor costs (or outsourccing) can lead to adding an additional worker, which doesnt necessarily increase the output per worker, just total output.
This is the issue, Auburn. Either wait until the cheap labor is exhausted globally or else artificially support wages through closing borders to immigration and imposing tariffs in order to tax embedded labor. Policy could also be used to limit outbound investment or favor domestic investment.Trump seems to get this.As wages increase, then so does investment in order to increase productivity. But that doesn't happen automatically without encouragement from policy.
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