desigualdades e desastre económico – novas evidências - mark friedman
TRANSCRIPT
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Causes, Costs, and Alternatives
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Economists consider the link between rising inequality and economic instability
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Two primary causes of depressions1. Concentration of WealthExploitation
2. Blockages in the circulation of money
“Rolling” of money
Spreads crisis
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Political capture• Wealthy lobby for
Tax relief
Pro-globalization, anti-labor policies
Deregulation of financial industry
Stagnant or declining average wages• Borrowing to maintain consumption
Greater risk preference for rich
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Dependent Variable: PCTGDPFALL
Method: Least Squares
Date: 08/04/13 Time: 23:55
Sample: 1 139
Included observations: 139
Variable Coefficient Std. Error t-Statistic Prob.
C -0.155758 0.088834 -1.753358 0.0819
TOPSHARE -0.006128 0.001435 -4.269316 0.0000
CURRENCYCRISIS 0.004792 0.014668 0.326711 0.7444
DEBTCRISIS 0.018260 0.031538 0.578981 0.5636
STOCKMKTCRASH 0.011438 0.013044 0.876893 0.3822
BANKCRISIS -0.007440 0.014561 -0.510936 0.6103
INFLCRISIS -0.053885 0.018865 -2.856326 0.0050
LIFEEXPECT2000 0.002331 0.001339 1.741151 0.0840
YRSSCHOOL2000 -0.002049 0.003330 -0.615096 0.5396
R-squared 0.244224 Mean dependent var -0.067373
Adjusted R-squared 0.197714 S.D. dependent var 0.078209
S.E. of regression 0.070052 Akaike info criterion -2.416597
Sum squared resid 0.637949 Schwarz criterion -2.226595
Log likelihood 176.9535 F-statistic 5.251069
Durbin-Watson stat 1.786557 Prob(F-statistic) 0.000011
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Poor neighborhoods targeted for predatory
mortgage lending• Fraudulent loans (Ninja loans)
• Excessive fees
• Frequent refinacing
• Fraudulent foreclosures
Encouraged by biggest banks and gov’t
No criminal convictions yet
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www.ritholtz.com/blog/2011/12/measuring-the-financial-sector-2/
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From Simon Johnson, MIT
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Encourages risk• Perverse incentives
Distorts consumption towards luxury goods
Predatory towards the poor
Robs resources from the rest of the
economy• Talent goes to financial sector
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920 suicides
648 Homicides
20,240 fatal heart attacks or strokes
494 deaths from liver cirrhosis
4227 admissions to mental hospitals
3340 admissions to state prisons
*Brenner, 1976
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CBO February 5, 2013
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Source: Reifschneider, Wascher, and Wilcox, Figure 1.1. From Federal Reserve
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Co-op-based economy inherently stable• Locally-based, resistant to international contagion.
• Co-op workers reduce incomes rather than lay-off in downturns
• Co-ops limit income inequality
Investment is community-determinedAutomation brings leisure, not
unemploymentGovernment policy of 100% employment
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Unemployment Spain:
• 26%
Basque Region:
• 15%