On his blog, Tyler Cowen summarizes the economics in Theodor Herzl’s “The Jewish State.”
Herzl favored selling European homes and businesses of departing Jews and buying land in Argentina or Palestine, at a profit, through a land acquisition company incorporated in London. Poor Jews from Romania and Russia would supply cheap labor and be rewarded by their own houses eventually. Herzl favored short working weeks, a democratic monarchy or the aristocratic republic of Renaissance Venice.
More discussion about falling employment of young men in the US:
John Rust publicizes the facts in a speech: Unskilled young men spend more time playing video games and less time in the labor market. “In 2015, 22 percent of lower-skilled men aged 21–30 had not worked at all during the prior 12 months.” They live in the basement of their parents’ houses and are not married. (And on his 12-year old son: “If we didn’t ration video games, I am not sure he would ever eat. I am positive he wouldn’t shower.)
Jason Richwine argues that the trend is restricted to natives as opposed to immigrants.
Robert Hall’s session on “The Economics of Secular Stagnation” featured talks by Robert Gordon, Larry Summers and Barry Eichengreen as well as comments by Hall, William Nordhaus and Gregory Mankiw.
Not surprisingly, both Gordon (on the supply side) and Summers (on the demand side) identified signs of stagnation. Eichengreen didn’t; in his view only the price of investment goods displayed an unusual trend. Hall argued that the year 2000 marked a turning point: Since then, income per household stagnates as a consequence of falling labor supply by rich families and in particular, the teenagers in those families (they play video games instead). Nordhaus expected not stagnation but acceleration, due to breakthroughs in artificial intelligence. And Mankiw pointed out that negative real interest rates are the most normal thing in many economic models and not necessarily related to stagnation. Moreover, he argued that the job market pointed to the end of secular stagnation. He predicted the topic would no longer be debated a year from now.
Update (Feb 2015): Webcasts of this as well as other sessions (including on Piketty’s “Capital in the 21st Century”) are available here.
Journal of Monetary Economics 55(2), March 2008, with Martín Gonzalez-Eiras. PDF.
We analyze the effect of the projected demographic transition on the political support for social security, and equilibrium outcomes. Embedding a probabilistic-voting setup of electoral competition in the standard OLG model with capital accumulation, we find that intergenerational transfers arise in the absence of altruism, commitment, or trigger strategies. Closed-form solutions predict population ageing to lead to higher social security tax rates, a rising share of pensions in GDP, but eventually lower social security benefits per retiree. The response of equilibrium tax rates to demographic shocks reduces old-age consumption risk. Calibrated to match features of the U.S. economy, the model suggests that, in response to the projected demographic transition, social security tax rates will gradually increase to 16%. Other policies that distort labor supply will become less important; labor supply therefore will rise, in contrast with frequently voiced fears.