Big picture econ heavy.
1. Tyler Cowen gives us a brace of thoughts today: First is a big-think:
Going back to unemployment, labor market opportunities for college grads have been eroding — except for the elite — in absolute terms since 1997-2000, well before the collapse in AD. If those same grads are highly willing to be geographically mobile, highly willing to consider actuarial training, and highly willing to take tougher courses and study where the jobs are (doesn’t have to be tech subjects, some of those are failing too), the unemployment response to a given AD shock will be much lower. But they aren’t, so it isn’t. I’ve seen only small adjustments in the ambition and flexibility of college goers, not enough preaching about TGS I suppose.
Read it all.
2. Next he makes two points with quotes: 1. online education is improving and 2. ‘real’ education is stagnating. My ax grinds away.
3. Now Sumner gives us the word of the day, which I also like: “Reify” in quoting Yglesias:
don’t reify the concept of an inflation rate and then worry about whether or not the government is “really” calculating the “real” one. Things change in a lot of ways, preferences are heterogeneous and aggregating it all up into a single number is inherently wrong. It’s just that the programs need a single number.
Excellent. He follows up:
A few decades back the British tried indexing the initial benefit levels to the CPI (not wages as we do.) Eventually the old people revolted, because as real wages trended upward over time, the living standards of the old fell further and further behind the lifestyle of those still working.
I commented on his blog with this:
My grandfather remains a retired college instructor/administrator, which he’s been for over 30 years. In fact, his life was divvied up into thirds: 1/3 before work (including WW2), 1/3 working and 1/3 retired. He’s (I think?) 90 right now. He is often amazed at how his living standard has skyrocketed since he retired.