ECONOMISTS seem to be warming to the idea that regional inequality is a problem, if only because it leads to political movements that threaten broader prosperity. While that is a useful development, it brings economics to a very difficult question, which is: what can usefully be done about that inequality? In a post generating quite a lot of discussion, Tim Duy says that economists need to get busy thinking about the problem:
The dry statistics on trade aren’t working to counter Trump. They make for good policy at one level and terrible policy (and politics) at another. The aggregate gains are irrelevant to someone suffering a personal loss. Critics need to find an effective response to Trump. I don’t think we have it yet. And here is the hardest part: My sense is that Democrats will respond by offering a bigger safety net. But people don’t want a welfare check. They want a job. And this is what Trump, wrongly or rightly, offers.
If a bigger safety net isn’t…Continue reading