The great economic slowdown: how narrowed technical progress brought static wages, sky-high wealth, and much discontent

Phelps, E. and Teck Hoon, H. and Zoega, Gylfi (2023) The great economic slowdown: how narrowed technical progress brought static wages, sky-high wealth, and much discontent. London, UK: Palgrave Macmillan. ISBN 9783031314407.

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Official URL: https://doi.org/10.1007/978-3-031-31441-4

Abstract

In brief, the book lays out a series of economic models, supported by empirical observations and econometric results, that show how a fall in the rate of productivity growth in the West, in particular in the United States, has had the effect of lowering the world real rate of interest, lift the stock market, hence create a more unequal distribution of wealth, raise house prices and increase the markups of price over marginal cost. In addition we show how in a two-country model, the growth slowdown in the West has allowed other countries, such as China, to catch up and become a larger share of the world economy, hence generating geopolitical tensions. We discuss the effect of Covid on work patterns – in particular on the increased tendency to work from home – on the macroeconomy and of the marked increase in public debt. In the final chapter, we discuss how a resumption of high productivity growth in the West would solve many of these problems – equilibrium real interest rates would rise, stock markets come down from their current elevated levels, the share of profits in national income fall and the share of wages increase, and real wages would rise at a more rapid rate creating a more satisfied labor force.

Metadata

Item Type:	Book
School:	Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
Depositing User:	Gylfi Zoega
Date Deposited:	09 Nov 2023 15:27
Last Modified:	09 Nov 2023 15:27
URI:	https://eprints.bbk.ac.uk/id/eprint/50179

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