On December 23, the European Central Bank published a working paper that examined the wealth effect, the amount by which people increase their consumption in response to a rise in their wealth. It finds that every $1 increase in housing prices raises spending by 2 cents in the subsequent quarter and between 4 and 10 cents annually over a longer period.
On December 22, the Federal Reserve Board posted a working paper on the impact of the minimum wage on income distribution. It finds that there is less improvement at the low end of the distribution than commonly believed.
Also on December 22, Mercatus Center economist Veronique de Rugy published a commentary that was highly critical of businesses that use government to restrict competition and raise profits at the expense of consumers.
A December 21 Rasmussen poll asked people about the role of business in society; 32 percent said it is to serve customers, 30 percent said to create jobs, and 28 percent said making money for their owners is a business’s primary purpose.
Also on December 21, the Working Poor Families Project published a report on the state of the working poor. It estimates that the share of working families with incomes below 200 percent of the poverty level has risen from 27.4 percent in 2002 to 30.1 percent in 2009.
And on December 21, the Bureau of Labor Statistics released new data on international manufacturing productivity comparisons. Between 2008 and 2009, the U.S. had the largest increase in output per man hour of any major country, 7.7 percent. Japan suffered the biggest decline, -11.4 percent. Of 19 countries surveyed, 12 saw a decline in productivity.
On December 17, the BLS published a databook on women in the labor force.
Also on December 17, the Federal Reserve Bank of Boston published a working paper examining the high level of cash being held by corporations. It finds that firms now prefer to finance investment from internal cash flow rather than external sources such as bonds.
On December 15, the Republican members of the Financial Crisis Inquiry Commission issued a preliminary report. They place virtually exclusive blame for the crisis on federal government policies, none on Wall Street.
Bruce Bartlett is an American historian and columnist who focuses on the intersection between politics and economics. He blogs daily and writes a weekly column at The Fiscal Times. Bartlett has written for Forbes Magazine and Creators Syndicate, and his work is informed by many years in government, including as a senior policy analyst in the Reagan White House. He is the author of seven books including the New York Times best-seller, Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy (Doubleday, 2006).
