When I began covering the American economy 11 years ago, it was the envy of the world.
The last 11 years have not been kind to it.
Kidding aside, David Leonhardt is moving to DC bureau chief and writes a farewell “Economic Scene” column that looks at several things that we know about the economy and points to some unanswered questions.
I’ll add two things to his list.
We know that growing income inequality comes from both the top and bottom. Incomes at the top have been growing (Leonhardt notes this), but have also been stagnating at the middle and bottom – and have failed to keep-up with average productivity growth (Leonhardt notes this, but downplays too much IMHO). Median incomes essentially did not grow during the 2000’s and poverty levels remained too high even before the current recession.
We don’t know as much as we would like about the determinants of long-term economic growth, including how to effectively spur innovation, experimentation, and deployment. There are clear externalities from basic R&D, and while the federal government does subsidize some research– directly via e.g. the NSF and NEH; and indirectly through tax credits — there is certainly room for improvement.
Of course this doesn’t complete the list, but his column is not a bad place to start.