The latest hot off the presses research argues that we’re overinvesting in many job categories. The typical view is that there is a flow of job skills that is required by the economy. For example, the economy needs more apps, so the education system produces a flow of more app designers. An alternative view is that employers are not trying to match inflows to outflows, but are instead accumulating human capital. In this case, the decision to acquire people with certain skills is driven by getting the level of human capital to its target. The latest is research argues that we had high growth in certain fields in the 80’s and 90’s that was driven by inadequate human capital inside firms, but that the target was achieved around 2000. Yet we’ve spent the last decade maintaining that flow of people with certain skills … much to their detriment. This is consistent with the view that we have openings for workers with some general higher order thinking skills, but without the more specific skills imposed by most college majors.
There’s an arthouse film called Thirty-Two Short Films About Glenn Gould. You’re getting Twenty-Six Short Posts from Dr. Tufte. :) These are on why it’s difficult to understand the current macroeconomic situation.
Joe Baker is not a macroeconomist, but we all do a little bit of everything at SUU, so he has to teach principles of macroeconomics sometimes. The other day he asked for pointers about summing up for his students why we can’t quite figure out what’s wrong with the economy. I came up with 26 reasons, most of which have been discussed in class, and all of which are now required.