Immigration and the macroeconomy after 2024
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Vice President Kamala Harris and former President Donald Trump present contrasting immigration policies; economic implications forecasted for 2025 and beyond; under Harris, net immigration in 2025 is projected at 3.7 million, while Trump's low scenario predicts a net outmigration of 740,000; GDP growth in 2025 could be $130 billion lower under Trump compared to Harris; cumulative growth in the civilian non-institutionalized population could range from 5 million to 15 million by 2028; Trump, low scenario could lead to a 0.2 percentage point reduction in GDP growth; immigration policies significantly impact labor force growth and economic output; long-term GDP levels in 2034 could differ by 1.4% to 3.0% based on immigration scenarios; immigration reform is deemed necessary by experts.

#Immigration #Economy #Gdp #Policy #2024Election #KamalaHarris #DonaldTrump #LaborForce #Macroeconomics #Reform

https://www.brookings.edu/articles/immigration-and-the-macroeconomy-after-2024/


The fiscal frontier: Projecting AI's long-term impact on the US fiscal outlook
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The paper simulates AI's impact on the US federal fiscal outlook; AI affects fiscal budgets through mortality rates, healthcare prices, healthcare demand, and productivity; AI shock could change annual budget deficits by 0.9% to -3.8% of GDP; a decrease of 3.8% could halve annual budget deficits; authored by Neil R. Mehrotra; published on October 16, 2024; part of Brookings Center on Regulation and Markets.

#Ai #UsEconomy #FiscalPolicy #Healthcare #Productivity #BudgetDeficits #Brookings #Research #EconomicStudies #PublicPolicy

https://www.brookings.edu/articles/the-fiscal-frontier-projecting-ais-long-term-impact-on-the-us-fiscal-outlook/


Buffer stocks for price stability?
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High inflation has led to new price stabilization proposals; Vice President Kamala Harris suggested rent control and anti-price-gouging policies; Economist Isabella Weber proposed public buffer stocks for food to stabilize prices and reduce volatility; Buffer stocks would be managed by the FAO or national governments; The proposal includes physical and virtual reserves to counter price manipulation; Historical context includes post-WWII discussions between Keynes and Hayek; Hayek favored a commodity reserve currency system, while Keynes advocated for active management of buffer stocks; Speculation in commodity markets can exacerbate price fluctuations; Past attempts at global buffer stock systems faced coordination issues; National systems like India's PDS and the U.S. Strategic Petroleum Reserve have inefficiencies; Public buffer stocks may not address long-term structural price changes; Effective monetary policy is essential to prevent inflation.

#Inflation #PriceStability #BufferStocks #Economics #Policy #Keynes #Hayek #FoodSecurity #Speculation #UsEconomy

https://www.brookings.edu/articles/buffer-stocks-for-price-stability/


Finding a long-term place for 'place-based' development strategy
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The Biden administration's major spending bills, including the American Rescue Act, Inflation Investment and Jobs Act, Chips and Science Act, and Inflation Reduction Act, total approximately $3.8 trillion; nearly $80 billion is allocated for place-based economic development programs; Kamala Harris supports large, place-focused grant competitions aimed at revitalizing deindustrialized areas; Donald Trump criticizes deindustrialization but lacks a clear place-oriented policy; bipartisan support for place-based programs like Tech Hubs may continue regardless of election outcome; the election will significantly influence future place-based policies.

#Placebased #EconomicDevelopment #BidenAdministration #Trump #Harris #RegionalInequality #Policy #Election2024 #Infrastructure #Innovation

https://www.brookings.edu/articles/finding-a-long-term-place-for-place-based-development-strategy/


Federal, State and Local Fiscal Policy and the Economy
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Fiscal policy increased U.S. GDP growth by 0.1 percentage point in Q2 2024; GDP grew at an annual rate of 3.0%; decline in tax collections since 2022 and increased investment from Inflation Reduction and CHIPS Acts raised FIM by 0.4 percentage point; federal and state purchases added 0.2 percentage point; pandemic-era transfers decreased FIM by 0.5 percentage point; FIM expected to be neutral in Q4 2024, then negative through Q2 2026; projections assume extension of 2017 Tax Cuts and Jobs Act provisions; Bureau of Economic Analysis revisions had minimal impact on FIM.

#FiscalPolicy #GdpGrowth #EconomicAnalysis #InflationReductionAct #ChipsAct #TaxPolicy #Brookings #UsEconomy #2024 #Research

https://www.brookings.edu/articles/1789104/


Innovation is part of rural America’s DNA
==========

Ingenuity and entrepreneurship are integral to rural America; localized innovations address national issues like digitalization, affordable housing, and childcare; national metrics often overlook rural innovation; Chris Carnell of Codefi Works in Cape Girardeau, MO, expands the digital economy; Charlie Chupp of Fading West Development in Buena Vista, CO, tackles affordable housing with modular homes; Thania Hernandez opens a bilingual childcare center in Ellsworth, ME, through CEI’s Child Care Innovation Lab; rural innovators are crucial for community resilience and addressing local needs.

#RuralInnovation #Entrepreneurship #AffordableHousing #Childcare #DigitalEconomy #CommunityDevelopment #Policy #EconomicDevelopment #SustainableDevelopment #LocalSolutions

https://www.brookings.edu/articles/innovation-is-part-of-rural-americas-dna/


What is US foreign assistance?
==========

Foreign aid includes money, technical expertise, and supplies provided by the U.S. to support common interests; $63 billion allocated for fiscal year 2023, about 1% of the federal budget; U.S. is the largest provider of foreign aid but contributes less as a GDP percentage compared to other wealthy nations; foreign assistance categorized into humanitarian, development, and security funding; USAID responsible for 60% of foreign assistance; U.S. foreign aid peaked at 3% of GDP during the Marshall Plan; U.S. ranks low among wealthy nations in foreign aid as a GDP percentage; bipartisan support for foreign aid exists among American public; significant successes include the Marshall Plan, Green Revolution, and PEPFAR program; polling shows 54% of Americans favor more U.S. involvement in international affairs.

#ForeignAid #Usaid #UsGovernment #InternationalRelations #BipartisanSupport #HumanitarianAssistance #DevelopmentAssistance #SecurityFunding #PublicOpinion #ForeignPolicy

https://www.brookings.edu/articles/what-is-us-foreign-assistance/


COBOLing together UI benefits: How delays in fiscal stabilizers affect aggregate consumption
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The COVID-19 pandemic caused a severe contraction in U.S. economic activity; federal government spent over $5 trillion on subsidies, transfers, grants, and tax cuts; administrative capacity issues hindered policy response; massive spike in unemployment insurance (UI) claims led to delays in benefit disbursement; 22 states had modernized their UI systems by 2020, abandoning COBOL; consumption fell more in states using COBOL, with a 2.8-percentage-point larger decline from March 13, 2020 to December 31, 2020; failure to modernize UI systems resulted in at least $105 billion lower real GDP; delays in UI benefits reduced consumption due to lower marginal propensity to consume; study conducted by Michael Navarrete, published on September 9, 2024.

#Covid19 #UnemploymentInsurance #EconomicPolicy #FiscalStabilizers #Cobol #Consumption #Gdp #LaborMarket #EconomicRecovery #PolicyAnalysis

https://www.brookings.edu/articles/coboling-together-ui-benefits/


How economic concerns are shaping the youth vote in 2024
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Young adults are facing significant economic challenges, with inflation impacting them more than older generations; economic issues are the top priority for voters under 30, overshadowing abortion and the Israel-Hamas conflict; turnout will depend on how well Trump or Harris address economic realities; young voters under 35 make up 29% of the electorate, including 8.3 million first-time voters; 21% of DNC delegates were under 36; 45% of eligible voters aged 18-27 are people of color; economic stress includes rising rent, student debt, and limited job opportunities; inflation peaked at 9.1% in June 2022, now at 2.9% as of July 2024; housing affordability is a major concern, especially for young voters of color; 39% of Latino voters aged 18-29 cite housing costs as their biggest hardship; systemic issues like redlining affect homeownership rates; Biden's administration approved $168.5 billion in student debt forgiveness for 4.8 million Americans; Harris proposes an economic agenda focusing on reducing costs and increasing homeownership opportunities; recent polls show Harris has substantial support from young voters, with her economic plan potentially increasing turnout.

#YouthVote #Economy #2024Election #Inflation #Housing #StudentDebt #KamalaHarris #DonaldTrump #VoterTurnout #EconomicChallenges

https://www.brookings.edu/articles/how-economic-concerns-are-shaping-the-youth-vote-in-2024/


How to tell if the US Treasury is having trouble borrowing in the bond market
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The U.S. Treasury is borrowing heavily due to budget deficits; concerns arise about investors' willingness to lend; the primary measure is the interest rate; other metrics include bid-to-cover ratio, when-issued yield vs. auction yield, and who is buying; a failed auction is unlikely but possible if primary dealers don't bid; bond market analysts also track foreign participation and measures from the secondary market; disruptions in the Treasury market have occurred in the past; market depth is a gauge of the secondary market's health.

#UsTreasury #BondMarket #Borrowing #BudgetDeficits #InterestRate #BidtocoverRatio #AuctionYield #PrimaryDealers #ForeignParticipation #SecondaryMarket #MarketDepth

https://www.brookings.edu/articles/how-to-tell-if-the-us-treasury-is-having-trouble-borrowing-in-the-bond-market/


Questioning the presumption of a US “consensus” on China policy
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There is a debate within the US policy community over the US-China relationship and the approach the United States should take towards China. While there is a perceived consensus that China poses a competitive challenge to the US, there are vigorous debates over how to characterize the challenge, whether US policy towards China has been misguided, and what the goals of US policy towards China should be. These debates are more visible on Capitol Hill and within the policy community than within the executive branch. The debates center around questions such as China's power trajectory, the US-China economic relationship, how to deter China's use of force against Taiwan, and what the US should try to accomplish in its relationship with China. The article argues that insisting on a consensus inhibits a fuller consideration of America's policy options and that a more expansive and inclusive debate is needed.

#UschinaRelationship #ChinaPolicy #UsPolicy #Debate #Consensus

https://www.brookings.edu/articles/questioning-the-presumption-of-a-us-consensus-on-china-policy/


AI’s impact on income inequality in the US
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AI's impact on income inequality in the US is analyzed in this article. High-skilled, high-income workers are likely to benefit from AI in the short term, while more workers may face job loss due to automation as AI advances. Policymakers should monitor AI's potential to exacerbate inequality and implement policies to boost AI literacy and share AI-driven productivity gains more equitably. Studies have found that lower-skilled workers in certain occupations derive greater productivity gains from AI than higher-skilled workers. However, this task-level evidence may not accurately predict the economy-wide impacts of AI on inequality. AI could increase inequality in the US through two mechanisms: skewed productivity boosts towards high-income workers in the near term, and increased income share going to capital at the expense of labor in the longer term. Policymakers should invest in AI literacy and access for a broader population of workers and strengthen safety nets for displaced workers. The future of AI could lead to automation that shifts economic returns from labor to capital, potentially resulting in job losses and lower wages in affected industries. Policymakers should address the challenges posed by AI's transformative potential to ensure that it benefits all members of society and does not exacerbate inequalities.

#Ai #IncomeInequality #Automation #ProductivityGains #HighskilledWorkers #LowskilledWorkers #Capital #Labor #Policymakers

https://www.brookings.edu/articles/ais-impact-on-income-inequality-in-the-us/


How Regional Technology Hubs can advance inclusive innovation
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The U.S. Economic Development Administration (EDA) designated 31 Regional Technology and Innovation Hubs (Tech Hubs) in October 2023. The EDA plans to award implementation grants of $40-$70 million to each of approximately five to ten of these regional coalitions. The goal is to create innovation clusters that enhance national security, improve supply chain resilience, and bolster America's position as a global leader in technology. The Tech Hubs program aims to deliver investments in ways that avoid replicating the highly unequal economic, demographic, and geographic outcomes present in America's current innovation economy. All 31 Tech Hubs have proposed specific inclusive talent development strategies, with technical job training being the most common. Many regional coalitions also highlight the important role of higher education institutions and employers in building inclusive talent pipelines. Nearly two-thirds of Tech Hubs plan to support inclusive entrepreneurship opportunities, ranging from engaging existing accelerators and incubators to expanding access to venture capital. Investments in innovation, research, commercialization, and infrastructure were less likely to incorporate equity and inclusion. However, all Tech Hubs have incorporated equity and inclusion objectives into their governance strategies. The decisions made by the Tech Hubs in implementing their strategies will determine whether they successfully deliver inclusive growth and activate the full potential of their regional economies. Regional partners, including state and local governments, philanthropies, and universities, can also play a role in powering inclusive innovation and growth across the nation.

#Technology #Innovation #EconomicDevelopment #Equity #Inclusion

https://www.brookings.edu/articles/how-regional-technology-hubs-can-advance-inclusive-innovation/


How China would tackle a second Trump term
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By the spring of 2024, China had settled with the reality that the possibility of a second Trump presidency is not only real, but also significant. According to the national polling organization, by May 22, 2024, former U.S. President Donald Trump has a 0.9% lead to President Joe Biden in the national presidential polls, at 41.1% versus Biden’s 40.2%. The guilty verdict in the criminal trial does not seem to have a major impact over the voters, which still is reflected in a 1.7% percent lead by Trump according to FiveThirtyEight on May 30. The result of the U.S. election is hard to predict and could change in any direction until Election Day. However, it would not be an overstatement to say that Trump has a fair and considerable chance to win. Consequently, Beijing must prepare for potential escalation with the United States on multiple fronts, as well as heightened uncertainty and volatility. The train has left the station long ago on which candidate China prefers. Chinese experts have publicly proclaimed that whoever the winner is, both candidates are “poison” for China. In their view, Biden might bring more stability to bilateral relations, but his competition strategy has been quite effective economically and diplomatically, leaving China’s high-tech industry and diplomatic offensive in limbo. In comparison, Trump’s position on U.S. alliances and partnerships and the damage he might cause serves Beijing’s strategic agenda in the long run. Yet in the short term, Trump’s unpredictability and his use of maximum pressure will put China in extremely difficult corners, making him the less desirable option from China’s perspective. In the current Chinese assessment, a second Trump term will most likely see a tougher U.S. stance on trade and economic relations with China, leading to further decoupling of the two economies. In the foreign policy and security realm, the Chinese have not yet made up their mind on the net result of how a second Trump presidency would affect China. Given Trump’s perceived isolationist tendency and his propensity to measure security ties with allies and partners from an economic cost-benefit perspective, Beijing’s default assumption is that another Trump presidency would seriously undermine U.S. credibility, its alliances and partnerships globally. And that is in China’s interest. China is ready to capitalize on Trump’s isolationist tendency in this regard. Most immediately, the Chinese expect that a second Trump term would lead to the reduction of U.S. security commitment and military aid toward the Ukraine war. China has not firmed up its judgment on which direction a second Trump presidency will push the Taiwan issue toward. Trump complained about Taiwan “taking all of our chip business” in January 2024. And there are some concerns about a remote possibility that under Trump, the United States would abandon Taiwan, which China finds incredible. Beijing recalls vividly how the first Trump term saw some of the most dramatic shifts in U.S. attitudes and positions on Taiwan of the past decades, such as the abrupt lifting of U.S. government rules prohibiting interactions between American and Taiwanese diplomats by then-U.S. Secretary of State Mike Pompeo, a move that according to the Washington Post “amounted to a symbolic but significant upgrade in the U.S. relationship with the democratic island.” China doesn’t believe Trump wanted a war with China over Taiwan, but they do see his indulgence of his team on Taiwan as the result of his overall “maximum pressure” campaign to force China to cave on other fronts, such as trade. If that is true, the United States and China will have more turbulence ahead on Taiwan under a second Trump presidency. Russia is another area of ambiguity. After all, during the first Trump administration, one of Beijing’s top concerns was a rapprochement between Washington and Moscow, leaving Beijing as the odd man out. And if the United States truly sees China as its main long-term strategic threat, one could argue that Washington needs to improve relations with Russia to undermine Chinese-Russian collusion. However, the first Trump term proved that improving relations with Russia was politically infeasible, even for Trump. The Ukraine war has added to the unlikelihood of that scenario, and China-Russia alignment has grown unprecedentedly stronger since 2022. China has limited capability to effectively prevent or counter the China policies of a second Trump term, even if they are against China’s national interests. That is deeply frustrating for Beijing. An alternative, more reassuring interpretation is that China can reduce its dependence on the United States economically and pursue its own parallel world order if Trump returns to the White House. But that is rather a reaction rather than preference. The second takeaway is that much of the modality of Trump’s China policy depends on the composition of Trump’s team, rather than Trump himself. Therefore, Beijing is closely observing who will be on the Trump team and what their China background says about their potential preferences. Chinese interlocutors have made some attempts to reach out to Trump’s team, especially those who work on China, to establish contact and build relations. However, these direct efforts have been more or less shut down by the Chinese government for fear of potential accusations about China’s efforts to interfere in the 2024 elections. Wary of the consequences, Beijing is treading a careful line, particularly because the overt nature of such outreach offers little deniability. As China looks at its playbook on how to tackle a second Trump term, there are two primary takeaways. The first is a painful realization that China has limited capability to effectively prevent or counter the China policies of a second Trump term, even if they are against China’s national interests. That is deeply frustrating for Beijing. An alternative, more reassuring interpretation is that China can reduce its dependence on the United States economically and pursue its own parallel world order if Trump returns to the White House. But that is rather a reaction rather than preference. The second takeaway is that much of the modality of Trump’s China policy depends on the composition of Trump’s team, rather than Trump himself. Therefore, Beijing is closely observing who will be on the Trump team and what their China background says about their potential preferences. Chinese interlocutors have made some attempts to reach out to Trump’s team, especially those who work on China, to establish contact and build relations. However, these direct efforts have been more or less shut down by the Chinese government for fear of potential accusations about China’s efforts to interfere in the 2024 elections. Wary of the consequences, Beijing is treading a careful line, particularly because the overt nature of such outreach offers little deniability. The upshot for 2024 is that China is seeking stability with the Biden administration, and Chinese efforts to build more dialogues, channels, and cooperation are in part to prepare for the potential scenario of another free fall in relations with the United States. In particular, China has been spending much more effort to engage U.S. states at the local level, and to build people-to-people ties at the societal level. Beijing will try to stabilize the relationship and pursue coexistence, should Trump win. But most of all, China is in the mode of bracing for impact on everything from trade to Taiwan, from political ties to diplomatic relations.

#China #Trump #UsElection #TradeWar #ForeignPolicy #Taiwan #Russia

https://www.brookings.edu/articles/how-china-would-tackle-a-second-trump-term/


Tracing the rise of Russian state media on TikTok
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Russian state-affiliated accounts have accelerated their use of TikTok since the start of 2024. In 2022, 57 accounts posted at least once during the year, with just one posting on average twice per day. In 2024 so far, 46 accounts have posted, with three averaging 10 or more posts a day. Although Russian state-affiliated accounts are far more active on other platforms, engagement per post on TikTok is much higher. 44 of the top 50 most engaged with posts in 2024 hail from TikTok, while the remaining six were shared by accounts on X. Posts pertaining to U.S. politics make up a small percentage of overall content shared by Russian state-affiliated accounts, but they represent a slightly higher percentage of total posts on TikTok than on X or Telegram. Spanish-language posts focused on U.S. politics are among the most popular on TikTok. Among posts about U.S. politics on TikTok from Russian state-affiliated accounts, wedge issues feature prominently. Russia's overt messaging has begun to adapt to an evolving information ecosystem made up of many more platforms with distinct identities. Russia's increased presence on TikTok coincides with the start of the 2024 U.S. presidential election cycle. TikTok's appeal to young voters in the United States offers an optimal avenue to spread Russian messaging about the U.S. political climate to a critical voting bloc. Russian state-backed accounts have broadened their online strategies to incorporate more regular content creation on TikTok. Despite ongoing questions about the future of TikTok's ownership, it remains critical to not wholly ignore or disengage from the platform entirely. Russia's increased presence on TikTok does not necessarily mean that this content will impact voter preferences in any meaningful way. However, the trends presented highlight a clear shift in Russia's overt strategy for disseminating its preferred messaging abroad around topics of domestic importance to platforms beyond X. Additional efforts by researchers to investigate the scope and influence of Russian propaganda in a pivotal election year should remain a priority.

#RussianStateMedia #Tiktok #SocialMedia #Propaganda #UsPolitics #Engagement

https://www.brookings.edu/articles/tracing-the-rise-of-russian-state-media-on-tiktok/


Democracy is good for the economy. Can business defend it?
==========

Democracies thrive because they ensure public goods, manage markets effectively, and channel contestation into political compromise. Democratic decline is associated with economic instability, brain drain, stagnation, and kleptocracy. Business associations need to actively protect democratic institutions and engage in preserving electoral democracy. Democratization causes an increase in GDP per capita of 20-25%. Autocratic regimes pose economic risks to businesses, including retaliatory taxation, discriminatory access to government contracts, and extortionary demands. Business leaders have historically underestimated the consequences of supporting leaders uncommitted to democratic norms. Business can play a vital role in preserving democracy by recognizing the economic dangers of democratic erosion and organizing effectively in response. Business organizations should educate leaders about the economic value of democracy, promote best practices for political engagement, and coordinate with civil society groups to protect electoral democracy.

#Democracy #Economy #Business #Autocracy #EconomicGrowth

https://www.brookings.edu/articles/democracy-is-good-for-the-economy-can-business-defend-it/


Do US states have different recoveries from economic shocks?
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A new study by Andrew Fieldhouse and David Munro, along with other researchers, examines the recoveries of US states from economic shocks. The study utilizes a newly developed dataset that shows economic recoveries have become more uniform across states. The researchers find that the migration response to bad shocks has disappeared in recent decades, with employment and unemployment still responding to shocks but without the outmigration that was observed in earlier postwar decades. The study also reveals that states' economies have become more similar over time, with convergence in industrial composition and income per capita. The findings have implications for macroeconomic stabilization policy at the federal level and suggest that regionally targeted policies may need to be reconsidered. The study also highlights the importance of understanding the nature of shocks, as different types of shocks can lead to different recovery patterns.

#UsStates #EconomicShocks #Recovery #Migration #Employment #Unemployment #IndustrialComposition #IncomePerCapita #MacroeconomicStabilizationPolicy

https://www.brookings.edu/articles/do-us-states-have-different-recoveries-from-economic-shocks/


The changing demographics of business ownership
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The last few years have seen an extraordinary increase in business formation, with certain demographic groups experiencing rising levels of entrepreneurship and shrinking business ownership gaps. Between 2019 and 2022, the share of Black and Hispanic families with ownership in employer businesses rose, while white families did not report a similar increase. The analysis also examines business ownership by educational attainment and income and how it influences wealth building across groups. Policymakers should seize the opportunities provided by the increase in business formation to support wealth creation, close wealth gaps, and make the economy more resilient and dynamic.

#BusinessOwnership #Demographics #Entrepreneurship #WealthBuilding #EconomicInequality

https://www.brookings.edu/articles/the-changing-demographics-of-business-ownership/


The partial data barter trades of the digital economy
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This article explores the concept of partial data barter in the digital economy, where firms provide consumers with goods or services in return for monetary payment and the harvesting of their usage data. It discusses the implications of partial data barter for measuring the size of the economy, assessing firm competition, and privacy regulations. The article argues that most firms are not stealing data but rather paying for it with price discounts. It suggests that policies should focus on differential privacy pricing and the terms of data trade rather than prohibiting data usage. The article also examines the value of free digital goods to consumers and the mismeasurement of GDP due to partial data barter. It concludes by discussing the costs and benefits of privacy policies and the need for regulations that allow for differential pricing based on privacy protection.

#DataBarter #DigitalEconomy #Privacy #PriceDiscounts #GdpMeasurement #PrivacyPolicies

https://www.brookings.edu/articles/the-partial-data-barter-trades-of-the-digital-economy/


The safety net should work for working-age adults
==========

Able-bodied adults without dependents (ABAWDs) receive minimal support from traditional safety net programs. The safety net’s impact on poverty reduction for ABAWDs has remained stagnant for 25 years, showing only a 1.1 percentage point decrease. A plurality of low-income ABAWDs report work-limiting disabilities, many face health challenges, and almost 40 percent are parents. The authors offer evidence that a safety net that predicates its inaccessibility to ABAWDs on the grounds of self-sufficiency through work does not recognize the state of the low-wage labor market and the precarious position of many of its workers. The safety net does little to support low-income ABAWDs. The authors show that approximately 14.4 percent of adults between the ages of 18 and 64 who do not reside with children and do not receive Social Security (SS) or Supplemental Security Income (SSI) were in poverty in 2017. This rate decreases to 13.3 percent after accounting for taxes and transfers—a mere 1.1 percentage point difference. In contrast, those with SS/SSI saw the largest percentage point reduction in poverty in 2017 (37.8 percentage points), even more than elderly adults overall (34.5 percentage points). The safety net for working-age adults has been broken for a long time even as the safety net has strengthened for others. From 1993 to 2017, the total reduction in poverty for all groups increased from 6.9 to 11.9 percentage points. For ABAWDs, the safety net went from reducing poverty by 0.8 percentage points in 1993 to 1.1 percentage points in 2017—effectively no change in poverty reduction in the past 25 years. The authors argue that the American safety net fails to protect millions of Americans who are in poor health, are part of a complex family, or work in the low-wage labor market who either cannot access or struggle to gain and maintain access to protections. Stereotypical assumptions about ABAWDs, an outdated understanding of the volatile labor market, and changing family norms and demographics render policies and laws regarding ABAWDs unresponsive to the needs of many individuals, families, and their communities. The authors offer many policy proposals to support this population, including expanding access to and the generosity of the Earned Income Tax Credit (EITC), making searching for work an allowable activity for SNAP, and continued expansion of Medicaid without work requirements. Opening the aperture for those who merit the protection of social insurance and increasing investment in the nation’s low-income ABAWDs would plug a hole in the nation’s safety net that currently leaves many working-age adults exposed to economic insecurity.

#SafetyNet #WorkingageAdults #Abawds #PovertyReduction #LowwageLaborMarket #PolicyProposals

https://www.brookings.edu/articles/the-safety-net-should-work-for-working-age-adults/


3 critical workforce challenges: How would the presidential candidates address them?
==========

Workforce development in the U.S. is crucial for improving earnings and reducing inequality. The critical challenges include creating more well-paying jobs and skilled workers, generating a growing workforce as baby boomers retire, and preparing for labor market dislocations associated with artificial intelligence (AI). Donald Trump's policies focused on tax cuts, deregulation, and restrictions on trade and immigration. Joe Biden's approach involves new investments in job creation and training, stronger labor standards, and union representation. A second term for Trump would likely emphasize tax cuts and deregulation, while a second term for Biden would allow for further implementation of his place-based 'industrial policy' and skill-building components. The two candidates offer stark differences in addressing labor market challenges.

#WorkforceDevelopment #PresidentialCandidates #Jobs #SkilledWorkers #Retirement #ArtificialIntelligence #DonaldTrump #JoeBiden

https://www.brookings.edu/articles/3-critical-workforce-challenges-how-would-the-presidential-candidates-address-them/


April 2024 update to TIGER: A feeble recovery characterized by multiple divergences
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The latest update of the Brookings-FT Tiger indexes shows that global growth has flatlined, although there are glimmers of a positive turn in some countries’ economic fortunes in the year ahead. The U.S. and India have maintained strong growth momentum while China’s economy is slowing down. Germany continues flirting with recession while Italy and Spain have performed better. Equity markets are surging even in some countries whose economic performance remains sub-par. Household and business confidence is improving in many countries despite geopolitical stresses and unsettled domestic politics. The main risks to global growth are geopolitical tensions, domestic political turmoil, and difficult-to-quell inflation. The U.S. economy is resilient with a strong labor market and rising equity prices. Japan is set for another year of positive but low growth. The United Kingdom faces limited growth due to inflation, lack of fiscal maneuver, and troubled domestic politics. China’s economy is floundering but stimulus measures are stabilizing growth. India is likely to have another year of strong performance. Indonesia is another standout performer. Russia's economy is durable but sanctions and war effort limit growth. Argentina, Mexico, and Brazil face domestic political complications. Low-income countries in debt distress have better growth prospects due to falling policy interest rates. Geopolitical rifts, political instability, trade protectionism, climate change, and inadequate protection for vulnerable populations and countries are major challenges. Policymakers need to reduce policy uncertainty and boost business and consumer confidence. Central banks need to focus on finishing battles against inflation.

#GlobalEconomy #EconomicRecovery #Divergences #Growth #Inflation #GeopoliticalTensions #DomesticPolitics #EquityMarkets #HouseholdConfidence #BusinessConfidence #UsEconomy #China'sEconomy #Japan'sEconomy #UnitedKingdom'sEconomy #India'sEconomy #Indonesia'sEconomy #Russia'sEconomy #Argentina'sEconomy #Mexico'sEconomy #Brazil'sEconomy #LowincomeCountries #GeopoliticalRifts #TradeProtectionism #ClimateChange #PolicyUncertainty #CentralBanks

https://www.brookings.edu/articles/april-2024-update-to-tiger-a-feeble-recovery-characterized-by-multiple-divergences/


A new way to measure the drivers of consumer inflation expectations
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This article discusses a new approach to measuring the drivers of consumer inflation expectations. The Federal Reserve and other central banks are interested in understanding how households form their inflation expectations as it influences consumer and firm decision-making and monetary policy actions. The article describes two types of approaches that have been used to identify the causal drivers of consumer expectations: randomized control trials and event study analysis. The authors propose using the Survey of Consumer Expectations (SCE) data to conduct event study analysis, as it provides daily survey data from June 2013 to December 2021. The authors find that certain salient FOMC announcements and macroeconomic data releases have a substantial impact on inflation expectations. They also conduct statistical tests to determine which types of events generally affect consumer expectations. The article concludes by noting that the event study methodology can be used to study the effects of other types of news on expectations in the future.

#InflationExpectations #ConsumerExpectations #MonetaryPolicy #FederalReserve #EventStudyAnalysis

https://www.brookings.edu/articles/a-new-way-to-measure-the-drivers-of-consumer-inflation-expectations/


Why do we dislike inflation?
==========

Most Americans strongly dislike inflation and do not believe wage increases come close to offsetting price increases, suggests a paper to be discussed at the Brookings Papers on Economic Activity (BPEA) conference on March 28. According to the paper titled 'Why Do We Dislike Inflation?' by Stefanie Stantcheva of Harvard University, 80% of respondents to recent surveys believe prices systematically increase faster than wages. Inflation, as measured by the Consumer Price Index, was 3.4% in 2023 while average hourly wages rose 4.1%. Stantcheva conducted two surveys of U.S. residents between December 2023 and January 2024, finding that respondents of all political leanings ranked inflation as the most important economic and social issue. Republicans blamed President Biden for inflation, while Democrats were nearly equally as likely to blame President Biden as corporate greed.

#Inflation #Wages #Survey #EconomicIssues #PoliticalAffiliation

https://www.brookings.edu/articles/why-do-we-dislike-inflation/


Building bridges: Milestones and cooperative endeavors shaping North America’s future
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The North American region is currently experiencing a unique and promising opportunity as diplomatic relations between Mexico, the United States, and Canada have never been stronger. In 2022, trade between Mexico and the U.S. amounted to $863 billion, while the total commercial exchange between Mexico and Canada reached around $40 billion. The trilateral relationship was institutionalized in 1994 with the North American Free Trade Agreement (NAFTA), transforming Mexico’s commercial ties with the U.S. and Canada. In 2017, the modernization of the free trade agreement began, leading to the United States-Mexico-Canada Agreement (USMCA), which took effect on July 1, 2020, replacing NAFTA. The USMCA aims to create a fairer and more reciprocal trade environment, generating high-paying jobs and promoting economic growth in North America. Mexico, Canada, and the U.S. have enhanced their economic and social ties through the North American Leaders’ Summit (NALS) since 2005. The first North America Semiconductor Conference (NASC) was realized to address the global semiconductor shortage and create a unified region for semiconductor development and production. Mexico and the U.S. work together in the High-Level Economic Dialogue (HLED), which aims to promote economic growth and competitiveness in both countries. The North American Development Bank (NADBank) offers financial support to states from both sides of the border for the development and implementation of environmental infrastructure projects. Despite upcoming elections in Mexico and the U.S., the relationships among the three countries are vital for the economies and competitiveness of the region. The ties established over the years have made North America the most competitive region in the world.

#NorthAmerica #DiplomaticRelations #Trade #Usmca #EconomicGrowth

https://www.brookings.edu/articles/building-bridges-milestones-and-cooperative-endeavors-shaping-north-americas-future/


How Japan and South Korea diverge on Taiwan and the Taiwan Strait
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The article discusses the differences in perspectives and policies between Japan and South Korea regarding Taiwan and the Taiwan Strait. The emergence of concerns about a potential conflict in the Taiwan Strait in both countries is attributed to U.S. President Joe Biden's joint statements with the leaders of Japan and South Korea emphasizing the importance of peace and stability in the Taiwan Strait. While both countries express symbolic solidarity, there are significant differences in their approaches. South Korea is more reluctant to publicly engage with Taiwan or express support for its international space, while Japan has a relatively robust and closer relationship with Taiwan. There are also differences in their perspectives on possible U.S. military deployments from allied soil for a cross-Strait contingency, with South Korea being less focused on the Taiwan Strait due to its longstanding existential threat from North Korea. Additionally, South Korean leaders and experts are more concerned about the risk of simultaneous conflicts in the Taiwan Strait and on the Korean Peninsula. The article emphasizes the need for candid discussions and international dialogues to address these differences and develop a more comprehensive approach to the Taiwan Strait issue.

#Japan #SouthKorea #Taiwan #TaiwanStrait #U.s.ForeignPolicy

https://www.brookings.edu/articles/how-japan-and-south-korea-diverge-on-taiwan-and-the-taiwan-strait/


Norm Eisen's testimony before the House of Representatives Committee on the Judiciary
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Norm Eisen testified before the House of Representatives Committee on the Judiciary on February 6, 2024, regarding the weaponization of the federal government. He discussed the personal significance of the topic due to his family's experience during the Holocaust. Eisen emphasized the need to address the imminent threat of weaponization posed by Donald Trump's record and promises. He urged the committee to focus on this issue. Eisen has dedicated his professional life to fighting the weaponization of government, including his work as a criminal defense lawyer, White House ethics czar, U.S. ambassador, and counsel for the first impeachment and trial of President Trump. He also mentioned the importance of protecting female election officials from harassment. Eisen's full testimony can be downloaded from the Brookings Institution's website.

#Weaponization #FederalGovernment #Holocaust #DonaldTrump #Impeachment #FemaleElectionOfficials #Harassment

https://www.brookings.edu/articles/norm-eisens-testimony-before-the-house-of-representatives-committee-on-the-judiciary/


Should income tax information be public?
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Historically, federal income tax returns have sometimes been public information. On three occasions, the federal government has made income tax information publicly available. Under the first federal income tax, implemented during the Civil War, income tax returns were not deemed confidential information. The modern income tax, implemented in 1913, did not include language automatically making return information public. The final period of income tax publicity came in the early years of the New Deal. The barriers to income tax publicity are not insurmountable, as property tax information is a matter of public record in America. Public income tax information is the rule in several Nordic countries. However, implementing such a policy in the United States would face powerful opposition.

#IncomeTax #Transparency #PublicInformation #TaxEvasion #Privacy

https://www.brookings.edu/articles/should-income-tax-information-be-public/