Does the world face secular stagnation?

Some public debate has been concerned about declining growth and secular stagnation with negative consequences for jobs and earnings.

A new discussion paper takes a global, long-run perspective on the recent debate about secular stagnation, which has so far mainly focused on the short term:

Matteo Cervellati (University of Bologna), Uwe Sunde (University of Munich) & Klaus F. Zimmermann (Princeton University and UNU-MERIT)

Demographic Dynamics and Long-Run Development: Insights for the Secular Stagnation Debate

Working Paper #604, Princeton University, Industrial Relations Section  UNU – MERIT Working Paper # 2016-049                                                                   ZEF Discussion Papers on Development Policy #226

The analysis is motivated by observing the interplay between the economic and demographic transition that has occurred in the developed world over the past 150 years. To the extent that high growth rates in the past have partly been the consequence of singular changes during the economic and demographic transition, growth is likely to become more moderate once the transition is completed.

At the same time, a similar transition is on its way in most developing countries, with profound consequences for the development prospects in these countries, but also for global comparative development.

The evidence presented in the paper suggests that long-run development dynamics have potentially important implications for the prospects of human and physical capital accumulation, the evolution of productivity and the question of secular stagnation.

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Arrived at Princeton University

After six months at the Center for European Studies of Harvard University, I have moved to Princeton University. I am now affiliated with the Economics Department and the Industrial Relations Section. Working in the Firestone Library is fun, and the Princeton campus is an own world.

For the seventh straight year, Princeton University was just ranked No. 1 among US national universities by U.S. News and World Report    followed by Harvard University, University of Chicago and Yale University. Congratulations!

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In front of the Firestone library at Princeton University.

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New York 9 – 11 Attacks

This Sunday marks the 15th anniversary of the 9 – 11 attacks. The occasion provides an opportunity to reflect the brutal challenges of a free world. Terror is no answer, nowhere in this world. The 9/11 Memorial in New York is a place to remember.

New York 9-11

The National September 11 Memorial in New York

New York 9 - 11

“The Memorial’s twin reflecting pools are each nearly an acre in size and feature the largest manmade waterfalls in North America. The pools sit within the footprints where the Twin Towers once stood.”

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Washington DC: Free Trade Negotiations Must Go On

As the US election campaign and the European policy debate show, there is a problematic rise in anti-free trade sentiments. As a consequence, the ratification of the Trans-Pacific Partnership (TPP) Agreement in the US congress is in danger. The companion agreement with Europe is the Transatlantic Trade and Investment Partnership (TTIP). The resistance among European policymakers against this treaty has also become increasingly stronger. Both treaties aim at fostering trade, economic growth and secure jobs. This is why I have always supported TTIP and support TPP.

In a meeting on September 10, 2016 in the Hay-Adams Hotel in Washington DC, US and Chinese think-tank leaders have debated the challenges to free trade in an luncheon in honor of Mr. Long Yongtu, the long-term Chinese trade negotiator. Chinese and US based think-tank heads agreed that the current challenges for trade are dangerous. The negotiations need to continue, and a TPP has to get finally ratified. This would be in the interest of both China and the US. However, the perspectives are not very promising.

The event was organized by the America China Public Affairs Institute, the Asia Society Policy Institute and the Center for China & Globalization. Speakers were, among others, Fred Teng, President of the America China Public Affairs Institute, Wendy Cutler, former US trade – negotiator, Huiyao Wang, President of the Center for China & Globalization, Robert Hormats, Vice Chairman of Kissinger Associates and former member of the US government, and Long Yongtu, Chairman of the Center for China & Globalization.

Klaus F. Zimmermann, Honorary Professor at Renmin University of China, Beijing, former President of DIW Berlin, former President of DIW DC, and Founding Director of IZA, and now Visiting Faculty at Princeton University and Co-Director of POP at UNU-MERIT, was also participating in the event. He was also discussing the importance of global networking on these issues with his old contact Huiyao Wang, President of the Center for China & Globalization, Beijing.

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Huiyao Wang (Center for China & Globalization, Beijing) and Klaus F. Zimmermann (Princeton University)

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Farewell Cambridge: Change of address

Change of address:

After six months of successful work at the Center for European Studies at Harvard University, I have left for Princeton University.

The Boston area is one of the most vibrant academic places in the world (if not the most vibrant one). And a wonderful place to live. I have enjoyed my time very much. I am grateful for the immense support I have received, the many contacts I could establish and the inspirations I got for my research.

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Last moments in front of my home.

ENDS

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Keine Frage: Wir schaffen das

Der Ausspruch von Bundeskanzlerin Angela Merkel auf einer Pressekonferenz am 31. August 2015 “Wir schaffen das!” angesichts einer eskalierenden Flüchtlingsfrage hat bereits legendären Charakter. Mit dem vorgeblich niederschmetternden Wahlergebnis zur Landtagswahl in Mecklenburg-Vorpommern vom vergangenen Sonntag, das die CDU hinter der AFD nur zur drittstärksten Kraft macht, sehen viele die Kanzlerin vor den Scherben ihrer Migrationspolitik.

Von den 1,6 Millionen Einwohnern des Landes, das jetzt so viel Aufmerksamkeit auf sich zieht, sind 65 Tausend Ausländer. Das ergibt gerade mal 4% und liegt weit unter dem Bundesdurchschnitt von 11%. Wie die anderen ostdeutschen Bundesländer auch hat Mecklenburg-Vorpommern gar keine nennenswerte Zahl an Migranten. Dennoch ist die politisch geschürte Stimmung groß.

Doch an den realen Machtverhältnissen ändert sich wahrscheinlich gar nichts. Die Fortsetzung der großen Koalition gilt als die wahrscheinlichste Lösung.

Zur Positionierung der Kanzlerin in der Flüchtlings- und Migrationsfrage “Wir schaffen das” gab es und gibt es aber gar keine Alternative. Relativ zu der Aufnahmefähigkeit des Landes und seiner Wirtschaft sind die Zuwanderungszahlen zwar hoch und die Herausforderung besteht in der kurzfristigen Reaktion auf stark gewachsene Flüchtlingsströme. Sie sind zwar groß, werden aber in ihrer Bedeutung für Gesellschaft, Wirtschaft und Arbeitsmarkt dramatisiert, sind also letzlich tragbar, wenn die Hausaufgaben gemacht werden. Das Problem war zuletzt nur, dass Deutschland auf die Entwicklung nicht hinreichend vorbereitet war.

In der Globalisierung nehmen die Potenziale für Arbeitsmigration und Flucht dauerhaft erheblich zu. Das müssen wir endlich zur Kenntnis nehmen und uns darauf einstellen. Unserer Geschichte ist die Übernahme von Verantwortung bei der Flüchtlingsfrage angemessen. Sie liefert auch langfristig das richtige Signal eines offenen Landes, das von der Lösung der Herausforderungen der Welt profitiert. Die derzeitige Sonderrolle Deutschlands in Europa entspricht also unserer historischen Verpflichtung, der Stärke von Wirtschaft und Arbeitsmarkt und unseren langfristigen Interessen an einer offenen Welt. Deutschland braucht dauerhaft mehr Zuwanderung.

Die politischen Spannungen um die Migrationsthematik sind trotz der immer noch bescheidenen, also relativ geringen Problemlage nicht überraschend. Die Thematik war und ist in den meisten Ländern sensitiv, dort selbst auch bei erheblich geringeren Zahlen. Das betrifft also nicht nur Deutschland, sondern bsw. auch Österreich, England und die USA.

Deutschland wird in der Krise besser bei der Unterbringung der Flüchtlinge, der Verwaltung und der Bildungsintegration. Die Mobilisierung der freiwilligen Helfer ist gelungen und muss zu einer ständigen Einrichtung werden.

Probleme bestehen weiter mit der geringen Geschwindigkeit der Asylverfahren, einer unzureichenden Abschiebepraxis abgelehnter Asylbewerber und einer zu geringen Integration in eine nervöse Gesellschaft und den stabilen Arbeitsmarkt. Flüchtlinge sollten frühzeitig dort leben können, wo sie Arbeit finden.

Viele offene Fragen existieren in den auswärtigen Beziehungen: Europa wird erheblich Schaden erleiden, wenn es nach den deutschen Vorleistungen nicht zu einer größeren Solidarität in der Flüchtlingspolitik kommt. Das bedeutet, daß alle Staaten Aufnahmekontingente nach ihrer Leistungsfähigkeit bereitstellen müssen.

Und die Mittelmeerpolitik braucht größere Aufmerksamkeit. Griechenland, Italien und Spanien müssen größere Verantwortung bei der Erstaufnahme von Flüchtlingen übernehmen, denn die Südgrenzen Europas sind nicht zu schließen. Der Türkei-Deal ist brüchig und schafft nur eine Pause, denn der Fluchtdruck sucht sich andere Wege. Die Regelungen zu sicheren Drittstaaten in Nordafrika muß überdacht werden und diesen Staaten muß dauerhaft stärker bei der wirtschaftlichen Entwicklung geholfen werden.

Die Kanzlerin hält deshalb den richtigen Kurs. Alle Beteiligten müssen nur ihre Hausaufgaben machen.

Klaus F. Zimmermann, Wirtschaftsprofessor der Universität Bonn, arbeitete zuletzt am Center for European Studies der Harvard University. Seit 1. September 2016 ist er im Economics Department der Princeton University tätig. Gleichzeitig leitet er ein Zentrum für Arbeit, Entwicklung und Migration bei UNU-MERIT in Maastricht.

 

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Boston Waterfront

ENDS

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New Literature on the Economics of Aging

Volume 1A-1B. Handbook of the Economics of Population Aging

Editors: John Piggott & Alan Woodland

Forthcoming December 2016 with North Holland. Further details including Table of Content.

Volume A contains:

Zaiceva, Anzelika & Klaus F. Zimmermann, Migration and the Demographic Shift, forthcoming 2016 in: J. Piggott and A. Woodland (Eds.), Handbook of the Economics of Population Aging, North Holland, Vol. A.

Abstract

The chapter investigates the two-way relation between population aging and international migration. After documenting the trends for both, it reviews the supply-push and demand-pull determinants of migration, focusing particularly on the role of age and aging. It then subsequently analyzes the implications of migration in the context of aging for labor markets as well as for health and public budgets, including in the political economy context. Although immigration is sometimes suggested as a solution for the aging problem, the existing academic literature from different fields is more cautious about its role and potential. While large-scale selective immigration might contribute to alleviating demographic pressures, it is unlikely that immigration will increase to the unrealistically large numbers. The working paper version of this paper can be obtained from the authors.

Handbook of the Economics of Population Aging

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How do parents respond to low birth weight outcomes?

Free access  to a new study by Brandon J. Restrepo  just published in the Journal of Population Economics.
     The paper analyzes how parental investment responds to a low birth weight (LBW) outcome and finds important differences in investment responsesby maternal education. High school dropouts reinforce a LBW outcome by providing less investment in the human capital of their LBW children relative to their normal birth weight children whereas higher educated mothers compensate by investing more in their LBW children.
     In addition, an increase in the number of LBW siblings present in the home raises investment in a child, which is consistent with reinforcement, but this positive effect tends to be concentrated among high school dropouts. These results suggest that studies analyzing the effects of LBW on child outcomes that do not account for heterogeneity in investment responses to a LBW outcome by maternal education may overestimate effects of LBW on child outcomes for those born to low-educated mothers and underestimate such effects for those born to high-educated mothers.
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Population Economics: Call for Book Proposals

Writing a new book in the field?

Consider to publish with the Springer book series in “Population Economics”

Editor-in-chief: K.F. Zimmermann with Series Editors: A. Cigno, E. Tekin, J. Zhang,  and A.J.G. Brown (Ed.)

For proposals and submissions contact the responsible Springer – Editor:  Katharina Wetzel-Vandai

• Covers pressing topics of our time, such as migration, population aging, employment,
health, and economic growth
• The series is useful as handbooks for policymakers as well as for students and teachers
of graduate and postgraduate courses
• Treats both theoretical and empirical aspects
• Written by leading scholars in the field, employing the latest research
methodologies

Research on population economics deals with some of the most pertinent issues of
our time and, as such, is of interest to academics and policymakers alike. Like the
Journal of Population Economics, the book series “Population Economics” addresses a
wide range of theoretical and empirical topics related to all areas of the economics of
population, household, and human resources. Books in the series comprise work that
closely examines special topics related to population economics, incorporating the most
recent developments in the field and the latest research methodologies. Micro-level
investigations include topics related to individual, household or family behavior, such as
migration, aging, household formation, marriage, divorce, fertility choices, labor supply,
health, and risky behavior. Macro-level inquiries examine topics such as economic growth
with exogenous or endogenous population evolution, population policy, savings and
pensions, social security, housing, and healthcare. These and other topics related to the
relationship between population dynamics and public choice, economic approaches
to human biology, and the impact of population on income and wealth distributions
have important individual, social, and institutional consequences, and their scientific
examination informs both economic theory and public policy.

Keywords: > Population Economics > Household and Family Economics > Labour Economics > Human Resources > Migration Economics

Population Economics

 

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Natural Disasters and Human Mobility

In a new paper with Linguère Mously Mbaye we review the effects of natural disasters on human mobility or migration. Although there is an increase of natural disasters and migration recently and hence more evidence to observe, the relationship remains complex. While some authors find that disasters increase migration, others show that they have only a marginal or no effect or are even negative. Human mobility appears to be an insurance mechanism against environmental shocks and there are different transmission channels which can explain the relationship between natural disasters and migration. Moreover, migrants’ remittances help to decrease households’ vulnerability to shocks but also dampen their adverse effects. The paper further provides a discussion of policy implications and potential future research avenues.

Linguère Mously Mbaye & Klaus F. Zimmermann, 2016, Natural Disasters and Human Mobility. For the full paper see ZEF Working Paper or UNU-MERIT Working Paper. Forthcoming: International Review of Environmental and Resource Economics

Further recent research papers.

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