Dynamics of Output and Employment in the U.S. Economy

This paper investigates the changing relationship between employment and real output in the U.S. economy from 1948 to 2010 both at the aggregate level and at some major industry-grouping levels of disaggregation. Real output is conventionally measured as value added corrected for price inflation, but there are some industries in which no independent measure of value added is possible and existing statistics depend on imputing value added to equal income. Indexes of output that exclude these imputations are closely correlated with employment over the whole period, and remain more closely correlated during the current business cycle. This analysis offers insights into deeper structural changes that have taken place in the U.S. economy over the past few decades in a context marked by the following three factors: (i) the service (especially the financial) sector has grown in importance, (ii) the economy has become more globalized, and (iii) the policy orientation has increasingly become neoliberal. We demonstrate an economically significant reduction in the coefficient relating employment growth to output growth over the business cycles since 1985. Some of this change is due to sectoral shifts toward services, but an important part of it reflects a reduction in the coefficient for the goods and material value-adding sectors.Okun's Law; Kaldor-Verdoorn Eect; Global restructuring; measurement of real output

An Integrated Approach to Climate Change, Income Distribution, Employment, and Economic Growth*

A demand-driven growth model involving capital accumulation and the dynamics of greenhouse gas (GHG) concentration is set up to examine macroeconomic issues raised by global warming, e.g. effects on output and employment of rising levels of GHG; offsets by mitigation; relationships among energy use and labor productivity, income distribution, and growth; the economic significance of the Jevons and other paradoxes; sustainable consumption and possible reductions in employment; and sources of instability and cyclicality implicit in the twodimensional dynamical system. The emphasis is on the combination of biophysical limits and Post- Keynesian growth theory and the qualitative patterns of system adjustment and the dynamics that emerge.Series: Ecological Economic Paper

Demand Drives Growth all the Way

A demand-driven alternative to the conventional Solow-Swan growth model is analyzed. Its medium run is built around Marx-Goodwin cycles of demand and distribution. Long-run income and wealth distributions follow rules of accumulation stated by Pasinetti in combination with a technical progress function for labor productivity growth incorporating a Kaldor effect and induced innovation. An explicit steady state solution is presented along with analysis of dynamics. When wage income of capitalist households is introduced, the Samuelson-Modigliani steady state "dual" to Pasinetti's cannot be stable. Numerical simulation loosely based on US data suggests that the long-run growth rate is around two percent per year and that the capitalist share of wealth may rise from about forty to seventy percent due to positive medium-term feedback of higher wealth inequality into its own growth.Series: Ecological Economic Paper

Economic Growth, Income Distribution, and Climate Change

We present a model based on Keynesian aggregate demand and labor productivity growth to study how climate damage affects the long-run evolution of the economy. Climate change induced by greenhouse gas lowers profitability, reducing investment and cutting output in the short and long runs. Short-run employment falls due to deficient demand. In the long run productivity growth is slower, lowering potential income levels. Climate policy can increase incomes and employment in the short and long runs while a continuation of business-as-usual leads to a dystopian income distribution with affluence for few and high levels of unemployment for the rest.Series: Ecological Economic Paper

The social cost of carbon emissions: Seven propositions

h i g h l i g h t s • We emphasize the market failure in the market for carbon emissions for economy-wide CBA. • Treating the SCC as independent of reference path is vulnerable to the methodological error. • We gage the effects of uncertainty and ambiguity on the social cost of carbon. • We review empirical estimates of the SCC. • We critically discuss recent US policy initiatives placing the SCC at 77/tC. a r t i c l e i n f o b s t r a c t Determining the social cost of carbon emissions (SCC) is a crucial step in the economic analysis of climate change policy as the US government's recent decision to use a range of estimates of the SCC centered at 77/tC (or, equivalently, $21/tCO 2 ) in cost-benefit analyses of proposed emission-control legislation underlines. This note reviews the welfare economics theory fundamental to the estimation of the SCC in both static and intertemporal contexts, examining the effects of assumptions about the typical agent's pure rate of time preference and elasticity of marginal felicity of consumption, production and mitigation technology, and the magnitude of climate-change damage on estimates of the SCC. We highlight three key conclusions: (i) an estimate of the SCC is conditional on a specific policy scenario, the details of which must be made explicit for the estimate to be meaningful; (ii) the social discount rate relevant to intertemporal allocation decisions also depends on the policy scenario; and (iii) the SCC is uniquely defined only for policy scenarios that lead to an efficient growth path because marginal costs and benefits of emission-mitigation diverge on inefficient growth paths. We illustrate these analytical conclusions with simulations of a growth model calibrated to the world economy

A World Climate Bank

Greenhouse-gas emissions cause external costs. They create inefficiency on a huge scale. Eliminating the inefficiency would lead to very great benefits, which could be distributed to the people of the world in a way that improves the life of each of them. No one need make a sacrifice. To achieve this result in real terms requires a transformation of the world’s economy. Resources must be shifted out of conventional investment and into reducing greenhouse-gas emissions. To make this possible in practice puts a responsibility on the world’s financial system. The transformation will have to be partly financed by very long-term loans. We need an international financial institution—a World Climate Bank—with enough stability and credibility to finance these large-scale change

Domain decomposition improvement of quark propagator estimation

Applying domain decomposition to the lattice Dirac operator and the associated quark propagator, we arrive at expressions which, with the proper insertion of random sources therein, can provide improvement to the estimation of the propagator. Schemes are presented for both open and closed (or loop) propagators. In the end, our technique for improving open contributions is similar to the ``maximal variance reduction'' approach of Michael and Peisa, but contains the advantage, especially for improved actions, of dealing directly with the Dirac operator. Using these improved open propagators for the Chirally Improved operator, we present preliminary results for the static-light meson spectrum. The improvement of closed propagators is modest: on some configurations there are signs of significant noise reduction of disconnected correlators; on others, the improvement amounts to a smoothening of the same correlators.Comment: 19 pages, 8 figures, version to appear in Computer Physics Communication