On Some Misunderstandings of the ‘Balance of Trade’ – Cafe Hayek Whenever Trump and others complain about the U.S. trade deficit they are necessarily complaining about foreigners investing in the U.S. or in dollar-denominated assets. The fact that Trump and other such complainers do not understand that they are complaining about foreigners investing in the U.S. or in dollar-denominated assets does not change the economic reality. Every cent of the U.S. trade deficit – or, more accurately, every cent of the U.S. current-account deficit – is offset by a cent in the U.S. capital-account surplus.
Michael Strain’s new book *The US Labor Market* – Marginal REVOLUTION It is an edited collection, I have an essay on inequality in the volume. Here is the Amazon link. Here is the book’s home page, which includes a full, free pdf. There are many famous contributors, including Jason Furman and Betsey Stevenson, Martin Feldstein, Justin Wolfers, Glenn Hubbard, George Borjas, Melissa Kearney, Casey Mulligan, and others. Here is Strain’s introduction and an organization of the book in sections. Self-recommending!
How much monopsony power is there? – Marginal REVOLUTION …if big firms are bargaining down wages then why do labor economists consistently find a large firm wage premium? To take one example from many, one recent study on retailers found that after controlling for individual and store characteristics, firms with at least 1,000 employees pay 9% to 11% more than those employing 10 or fewer. Third, if firms’ bargaining power over their employees is growing, then why are they increasingly contracting out for work? Lawrence Katz and Alan Krueger argue that from 2005 to 2015, the share of workers hired out through contract companies grew from 0.6% to 3.1%. A company with labor market power wouldn’t want to contract out work to another company. They’d want to hire workers directly to take advantage of that power.