Economists shape conversations on topics ranging from business to politics, and their influence is widely felt; the Federal Reserve, trade negotiations, and public spending have become central focuses of political debate. But economists weren’t always permanent fixtures in policymaking.
The United States is experiencing a new type of industrial revolution, one in which businesses outside of manufacturing are harnessing the power of the internet to scale up production and increase profits.
In the 1980s, supply-side economics became a rallying cry of conservative politicians. This macroeconomic theory posits that lower taxes and decreased regulation can lead to economic growth, helping everyone on the income ladder as benefits to the rich “trickle down” to those less well-off.
Losing a job often leads to lower earnings that stretch long beyond the time of unemployment. Yet it’s hard to know exactly what causes these lower lifetime earnings.
When home prices rise, households tend to borrow and spend more. But economists have had trouble identifying exactly what causes that relationship. Is it that when a house becomes worth more, borrowers are able to offer more collateral to secure a loan?