Abstract: Aggregate U.S. assets have grown at an impressive rate over the past four decades, espe... more Abstract: Aggregate U.S. assets have grown at an impressive rate over the past four decades, especially in recent years. Despite this, middle class living standards have remained relatively flat over the past four decades, and substantial debt has been required to maintain consumption at customary levels. We assemble the U.S. balance sheet for the past seventy years, showing how mounting debt has contributed to growth in financial assets, relative declines in net worth, and increases in assets in relation to GDP. We also calculate a financialization ratio based on our data, for which the trend line identifies a structural break circa 1980 after which the U.S. economy “financializes.” Our numbers, moreover, support the claim that the debt spiral intensified income inequality. Most remarkably, average national equity returns remained flat or even declined slightly post-1980 despite much greater volatility and debt leverage, contrary to what basic financial theory would dictate.
Accounting for environmental damage is relevant to how one measures the extent and severity of in... more Accounting for environmental damage is relevant to how one measures the extent and severity of inequality and poverty, and the question of ecological distribution - how the costs associated with environmental damage are distributed across the population - is critical. Following Khan’s (1997) study on Bangladesh, I use environmental damage estimates to adjust inequality and poverty measures for Brazil and Costa Rica. Unlike Khan, I test for different assumptions regarding the ecological distribution. Provisional results indicate that inequality and poverty are understated, and that, under certain assumptions, both worsened in Costa Rica during the 1980s, contrary to what conventional statistics suggest. Want of reliable ecological distribution data, however, suggests that sensitivity analysis around competing assumptions may be preferable to conventional indicators.
Part I. The Context for Economic Analysis 0. Macroeconomics and Well-Being 1. Economic Activity i... more Part I. The Context for Economic Analysis 0. Macroeconomics and Well-Being 1. Economic Activity in Context 2. Useful Tools and Concepts 3. What Economies Do 4. Supply and Demand Part II. Macroeconomic Basics 5. Macroeconomic Measurement: The Current Approach 6. Macroeconomic Measurement: Environmental and Social Dimensions 7. The Structure of the U.S. Economy 8. Employment, Unemployment, and Wages Part III. Macroeconomic Theory and Policy 9. Aggregate Demand and Economic Fluctuations 10. Fiscal Policy 11. Money, Banking, and Finance 12. The Federal Reserve and Monetary Policy 13. Aggregate Supply, Aggregate Demand, and Inflation: Putting It All Together 14. The Global Economy and Policy Part IV. Macroeconomic Issues and Applications 15. The Financial Crisis and the Great Recession 16. Deficits and Debt 17. How Economies Grow and Develop 18. Growth and Sustainability in the Twenty-First Century
... MARIANO TORRAS ... Some of the recent literature, motivated by growing interest in environmen... more ... MARIANO TORRAS ... Some of the recent literature, motivated by growing interest in environmental issues, and sustainable development in particular, criticizes GDP from the perspective that it confuses true income and wealth consumption (Daly 1995; Repetto et al. 1989). ...
Problemas del Desarrollo. Revista Latinoamericana de Economía
El crecimiento del producto interno bruto (PIB) como indicador de adelanto social ha sido critica... more El crecimiento del producto interno bruto (PIB) como indicador de adelanto social ha sido criticado como engañoso pues pasa por alto las consecuencias ambientales y sociales de una economía creciente. En este trabajo desarrollo un indicador alternativo que no sólo toma en cuenta estos dos aspectos, sino además cómo los problemas ambientales están distribuidos dentro de la población. Aplico mi metodología a datos sobre Brasil de 1965 a 1998 y encuentro que, a pesar de un crecimiento anual más alla de 3% en el PIB, el bienestar nacional aumenta mucho más lentamente o, incluso, disminuye. Los resultados refuerzan las dudas sobre el PIB y demuestran la importancia de la distribución ecológica en relación con el bienestar nacional de un país.
Abstract: Aggregate U.S. assets have grown at an impressive rate over the past four decades, espe... more Abstract: Aggregate U.S. assets have grown at an impressive rate over the past four decades, especially in recent years. Despite this, middle class living standards have remained relatively flat over the past four decades, and substantial debt has been required to maintain consumption at customary levels. We assemble the U.S. balance sheet for the past seventy years, showing how mounting debt has contributed to growth in financial assets, relative declines in net worth, and increases in assets in relation to GDP. We also calculate a financialization ratio based on our data, for which the trend line identifies a structural break circa 1980 after which the U.S. economy “financializes.” Our numbers, moreover, support the claim that the debt spiral intensified income inequality. Most remarkably, average national equity returns remained flat or even declined slightly post-1980 despite much greater volatility and debt leverage, contrary to what basic financial theory would dictate.
Accounting for environmental damage is relevant to how one measures the extent and severity of in... more Accounting for environmental damage is relevant to how one measures the extent and severity of inequality and poverty, and the question of ecological distribution - how the costs associated with environmental damage are distributed across the population - is critical. Following Khan’s (1997) study on Bangladesh, I use environmental damage estimates to adjust inequality and poverty measures for Brazil and Costa Rica. Unlike Khan, I test for different assumptions regarding the ecological distribution. Provisional results indicate that inequality and poverty are understated, and that, under certain assumptions, both worsened in Costa Rica during the 1980s, contrary to what conventional statistics suggest. Want of reliable ecological distribution data, however, suggests that sensitivity analysis around competing assumptions may be preferable to conventional indicators.
Part I. The Context for Economic Analysis 0. Macroeconomics and Well-Being 1. Economic Activity i... more Part I. The Context for Economic Analysis 0. Macroeconomics and Well-Being 1. Economic Activity in Context 2. Useful Tools and Concepts 3. What Economies Do 4. Supply and Demand Part II. Macroeconomic Basics 5. Macroeconomic Measurement: The Current Approach 6. Macroeconomic Measurement: Environmental and Social Dimensions 7. The Structure of the U.S. Economy 8. Employment, Unemployment, and Wages Part III. Macroeconomic Theory and Policy 9. Aggregate Demand and Economic Fluctuations 10. Fiscal Policy 11. Money, Banking, and Finance 12. The Federal Reserve and Monetary Policy 13. Aggregate Supply, Aggregate Demand, and Inflation: Putting It All Together 14. The Global Economy and Policy Part IV. Macroeconomic Issues and Applications 15. The Financial Crisis and the Great Recession 16. Deficits and Debt 17. How Economies Grow and Develop 18. Growth and Sustainability in the Twenty-First Century
... MARIANO TORRAS ... Some of the recent literature, motivated by growing interest in environmen... more ... MARIANO TORRAS ... Some of the recent literature, motivated by growing interest in environmental issues, and sustainable development in particular, criticizes GDP from the perspective that it confuses true income and wealth consumption (Daly 1995; Repetto et al. 1989). ...
Problemas del Desarrollo. Revista Latinoamericana de Economía
El crecimiento del producto interno bruto (PIB) como indicador de adelanto social ha sido critica... more El crecimiento del producto interno bruto (PIB) como indicador de adelanto social ha sido criticado como engañoso pues pasa por alto las consecuencias ambientales y sociales de una economía creciente. En este trabajo desarrollo un indicador alternativo que no sólo toma en cuenta estos dos aspectos, sino además cómo los problemas ambientales están distribuidos dentro de la población. Aplico mi metodología a datos sobre Brasil de 1965 a 1998 y encuentro que, a pesar de un crecimiento anual más alla de 3% en el PIB, el bienestar nacional aumenta mucho más lentamente o, incluso, disminuye. Los resultados refuerzan las dudas sobre el PIB y demuestran la importancia de la distribución ecológica en relación con el bienestar nacional de un país.
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