Additional references: Service and sharing economy, Organisation of households
Phuah Eng Chye (30 March 2019)
Services economy
Manoj Atolia, Prakash Loungani, Milton Marquis, Chris Papageorgiou (28 September 2018) “Rethinking development policy: Deindustrialization, servicification and structural transformation”. IMF. https://www.imf.org/en/Publications/WP/Issues/2018/09/28/Rethinking-Development-Policy-Deindustrialization-Servicification-and-Structural-46253
This paper reviews theories on structural transformation and discusses issues relating to premature deindustrialization and the middle-income trap.
United Nations Conference on Trade and Development (UNTACD) (October 2016) “Robots and industrialization in developing countries”. https://unctad.org/en/PublicationsLibrary/presspb2016d6_en.pdf
Several developing countries experienced premature deindustrialization in the 1980s and 1990s. This was due to commodity booms and speculative financial inflows that led to currency appreciation and a loss of manufacturing competitiveness, compounded by China’s manufacturing exports. The current question is now that these trends have reversed, whether Africa and Latin America can reignite industrialization – taking into account automation and artificial intelligence.
Barry Eichengreen, Poonam Gupta (May 2009) “The two waves of service sector growth”. NBER. http://www.nber.org/papers/w14968.pdf
We identify two waves of service sector growth, a first wave in countries with relatively low per capita GDP and a second wave in higher per capita countries. The first wave appears made up primarily of traditional services, the second wave of modern services receptive to IT and increasingly tradable across borders. There is evidence the second wave is occurring at lower income levels after 1990; mostly in democracies, in open economies and those near the global financial centers.
Huiyu Li (22 January 2019) “Nonmanufacturing as an engine of growth”. FRBSF Economic Letter. https://www.frbsf.org/economic-research/publications/economic-letter/2019/january/nonmanufacturing-as-engine-of-growth-via-creative-destruction/
Jonathan Rothwell (2016) “No recovery: An analysis of long-term U.S. productivity decline”. Gallup.https://www.compete.org/storage/reports/gallup_norecovery_final_report_120516.pdf
The US challenge of low growth and low productivity is due to three soaring expenses: healthcare, housing and education. Without inflation in these sectors, real annual productivity or GDP per capita growth would have been 3.9% instead of 1.7%.
Georg Duernecker, Berthold Herrendorf, Akos Valentinyi (16 May 2018) “Structural change and the productivity slowdown”. https://voxeu.org/article/structural-change-and-productivity-slowdown
A new framework to estimate the effects of Baumol’s disease on future productivity growth in the US. The results suggest future structural change will not reduce productivity much further due to substitutability within the broader service sector.
Dani Rodrik (October 2018) “New technologies, global value chains, and developing economies”. NBER. https://www.nber.org/papers/w25164#fromrss
Many exports of developing countries are channeled through global value chains (GVCs), which also act as conduits for new technologies. However, GVCs and new technologies exhibit features that limit the upside and may even undermine developing countries’ economic performance.
Sharing economy
Alexander Funcke, Andreas Bergh, Joakim Wernberg (July 2018) “TIMBRO sharing economy index”. TIMBRO. file:///C:/Users/user/Downloads/2018%20Bergh%20Funcke%20Wernberg%20-%20Timbro%20Sharing%20Economy%20Index.pdf
Showcase a global index benchmarking sharing across countries and tests hypotheses on the correlation between sharing economy and various factors.
K. Frenken, J. Schor (2017) “Putting the sharing economy into perspective”, Environmental Innovation and Societal Transitions.https://www.sciencedirect.com/science/article/pii/S2210422417300114
Reviews critical issues relating to the social effects of sharing platforms and concerns that platforms will naturally grow into monopolies.
K. Frenken (2017) “Political economies and environmental futures of the sharing economy”. Innovation Studies Utrecht (ISU) Working Paper Series.http://www.geo.uu.nl/isu/pdf/isu1701.pdf
The sharing economy occurs at the intersection of three trends: peer-to-peer exchange, access over ownership and circular business models. I discuss environmental impacts and articulate three possible futures: a capitalist future cumulating into monopolistic super-platforms, a state-led future that shifts taxation from labour to capital and redistributes the gains of sharing, and a citizen-led future based on cooperatively owned platforms under democratic control.
Nestor M. Davidson, John J. Infranca (2016) “The sharing economy as an urban phenomenon”. Yale Law and Policy Review.https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1697&context=ylpr
Joeri van den Steenhoven, Idil Burale, Vanessa Toye, Claire Buré (March 2016) “Redesigning regulation for the sharing economy”. MaRS Solutions Lab.https://www.marsdd.com/wp-content/uploads/2016/04/MSL-Sharing-Economy-Public-Design-Report.pdf
Josh Barro (12 August 2018) “Governments are getting better at regulating the sharing economy”. Business Insider. https://www.businessinsider.com/governments-regulating-sharing-economy-uber-scooters-2018-8
Mike Bulajewski (12 December 2018) “The sharing economy was dead on arrival”. JSTOR Daily. https://daily.jstor.org/the-sharing-economy-was-dead-on-arrival/
Bruce Schaller (25 July 2018) “The new automobility: Lyft, Uber and the future of American cities”. Schaller Consulting.http://www.schallerconsult.com/rideservices/automobility.pdf
Provides a detailed profile of Transportation Network Companies (TNC) ridership, users and usage and discusses urban transportation challenges, policy responses, and the implications of shared autonomous vehicles in major American cities.
W. David Montgomery, Richard Mudge, Erica L. Groshen, Susan Helper, John Paul MacDuffie, Charles Carson (June 2018) “America’s workforce and the self-driving future: Realizing productivity gains and spurring economic growth”. Securing America’s Future Energy (SAFE). https://avworkforce.secureenergy.org/wp-content/uploads/2018/06/Americas-Workforce-and-the-Self-Driving-Future_Realizing-Productivity-Gains-and-Spurring-Economic-Growth.pdf
Richard Mudge (June 2018) “The economic and social value of autonomous vehicles: Implications from past network-scale investments”. Compass Transportation and Technology, Inc. Prepared for Securing America’s Future Energy (SAFE).https://avworkforce.secureenergy.org/wp-content/uploads/2018/06/Compass-Transportation-Report-June-2018.pdf
W David Montgomery (June 2018) “Public and private benefits of autonomous vehicles”. Securing America’s Future Energy (SAFE).https://avworkforce.secureenergy.org/wp-content/uploads/2018/06/W.-David-Montgomery-Report-June-2018.pdf
Erica L. Groshen, Susan Helper, John Paul MacDuffie, Charles Carson (June 2018) “Preparing U.S. workers and employers for an autonomous vehicle future”. Prepared for Securing America’s Future Energy (SAFE). https://avworkforce.secureenergy.org/wp-content/uploads/2018/06/Groshen-et-al-Report-June-2018-1.pdf
Grace Dobush (31 August 2018) “Uber takes another go at Germany’s tough ridesharing market”. Handelsblatt Global. https://global.handelsblatt.com/companies/uber-attempt-reenter-german-market-957831
Graham Rapier (15 February 2019) “Uber is suing to block New York’s cap on new ride-hailing vehicles”. Business Insider. https://www.businessinsider.com/uber-sues-to-block-new-york-cap-on-new-ride-hailing-vehicles-2019-2
Brianna Leatherwood (15 November 2018) “China explained: The rise, fall, and uncertainty of Didi’s ride-hailing dynasty”. Radii China.
Tracey Lindeman (4 July 2018) “Why don’t we have free public transit? Estonia just rolled out the largest free public transit scheme in the world. Here’s why we’re not following suit”. https://motherboard.vice.com/en_us/article/3k43p9/free-public-transit-estonia-transportation
Kim Willsher (15 October 2018) “I leave the car at home: How free buses are revolutionising one French city”. https://www.theguardian.com/cities/2018/oct/15/i-leave-the-car-at-home-how-free-buses-are-revolutionising-one-french-city?CMP=share_btn_tw
Timothy B. Lee (31 August 2018) “This city has a vision for mass transit that doesn’t involve city buses. Arlington, Texas, is developing a transit system based on ride-hailing shuttles”. ARS Technica. https://arstechnica.com/cars/2018/08/this-city-has-a-vision-for-mass-transit-that-doesnt-involve-city-buses/
Ankita Rao (9 February 2018) “Before he died, a New York taxi driver wrote about how the gig economy ruined his life”. Motherboard. https://motherboard.vice.com/en_us/article/neqb58/before-he-died-a-new-york-taxi-driver-wrote-about-how-the-gig-economy-ruined-his-life
Alexis C. Madrigal (20 Decemberr 2018) “7 arguments against the Autonomous-Vehicle utopia: All the ways the self-driving future won’t come to pass”. The Atlantic. https://www.theatlantic.com/technology/archive/2018/12/7-arguments-against-the-autonomous-vehicle-utopia/578638/
Steve Viscelli (September 2018) “Driverless? Autonomous trucks and the future of the American trucker.” UC Berkeley Center for Labor Research and Education and Working Partnerships USA. http://driverlessreport.org/files/driverless.pdf
This report assesses multiple scenarios. Autonomous trucks could displace about 294,000 long-distance drivers. New freight-moving jobs could be created; but mainly local driving and last-mile delivery jobs associated with lower wages and poor working conditions. Strong policy leadership is needed to ensure the benefits of innovation are broadly shared between technology and trucking companies, drivers, and communities.
Tyler Cowen (4 February 2018) “Will truckers be automated? (from the comments)”. Marginal Revolution. http://marginalrevolution.com/marginalrevolution/2018/02/will-truckers-automated-comments.html
Organisation of households
Gauti B. Eggertsson, Manuel Lancastre, Lawrence H. Summers (August 2018) “Aging, output per capita and secular stagnation”. NBER. http://www.nber.org/papers/w24902
This paper re-affirms previous findings of positive correlation between population aging and per-capita output growth. However, this relationship breaks down when interest rate adjustment is inhibited by an effective lower bound on nominal rates. During 2008-2015, aging had a negative impact on living standards, consistent with the secular stagnation hypothesis.
Thomas Cooley, Espen Henriksen (11 June 2018) “Demographics and long-run growth.” https://voxeu.org/article/demographics-and-long-run-growth
This article explores channels through which demographic change contributes to a slowdown of long-run growth and how the effects of demographic change can be mitigated. Policies that target consumption-saving choices, labour-leisure choices, and human capital accumulation over the lifecycle are likely to be most effective.
Hervé Boulhol, Christian Geppert (4 June 2018) “Population ageing: Pension policies alone will not prevent the decline in the relative size of the labour force.”https://voxeu.org/article/effect-population-ageing-pensions
The rise in the old-age dependency ratio will put pressure on pension systems and the standard of living. In the OECD, stabilising the old-age dependency ratio between 2015 and 2050 requires an increase in retirement age by 8.4 years. This far exceeds the projected increase in longevity and retirement age driven by pension reforms.
Axel H. Börsch-Supan, Courtney Coile (November 2018) “Social security programs and retirement around the world: Reforms and retirement incentives – Introduction and summary”. NBER. https://www.nber.org/papers/w25280
Assaf Razin, Efraim Sadka (7 October 2018) “The welfare state besides globalisation and ageing forces”. https://voxeu.org/article/welfare-state-besides-globalisation-and-ageing-forces
This column argues the welfare state counter-balances globalisation by spreading the gains from trade to almost all income groups, thereby reducing inequality. The welfare state, financed by labour and capital taxes, can survive international tax competition. Immigration can be used to finance the welfare state, particularly in ageing societies.
Richard Jackson, Reimar Macaranas, Tobias Peter (2013) “U.S. development policy in an aging world. New challenges and new priorities for a new demographic era”. Center for Strategic and International Studies. https://www.globalaginginstitute.org/assets/client-assets/common/downloads/publications/2013-US-Development-Policy-in-an-Aging-World.pdf
John Ameriks, Joseph Briggs, Andrew Caplin, Minjoon Lee, Matthew D. Shapiro, Christopher Tonetti (29 October 2018) “Older Americans would work longer if jobs were flexible”. https://voxeu.org/article/older-americans-would-work-longer-if-jobs-were-flexible
Using a survey, this column finds older Americans stop working mainly due to their lack of opportunity. This reveals job opportunities with flexible schedules are hard for older Americans to find.
Peter Gosselin (28 December 2018) “If you’re over 50, chances are the decision to leave a job won’t be yours”. Propublica. https://www.propublica.org/article/older-workers-united-states-pushed-out-of-work-forced-retirement
Mariana Colacelli, Emilio Fernandez Corugedo (November 2018) “Macroeconomic effects of Japan’s demographics: Can structural reforms reverse them?” IMF. https://www.imf.org/en/Publications/WP/Issues/2018/11/28/Macroeconomic-Effects-of-Japans-Demographics-Can-Structural-Reforms-Reverse-Them-46356
This paper studies structural reforms using the IMF’s Global Integrated Monetary and Fiscal Model (GIMF) with demographic features. Structural reforms can significantly offset the adverse demographic headwinds on Japan’s real GDP but its effects on boosting inflation and stabilising public debt is dependent on the credibility of the programs. Without reforms, the severe demographic headwinds could reduce Japan’s real GDP by over 25 percent in the next 40 years.
David Bloom, Paige Kirby, JP Sevilla, Andrew Stawasz (3 December 2018) “Japan’s age wave: Challenges and solutions”. https://voxeu.org/article/japan-s-age-wave-challenges-and-solutions
This column discusses Japan’s socioeconomic burdens from an ageing population and proposes a multi-pronged solutions portfolio of complementary initiatives that includes measures to promote and protect elderly health.
Ellen R. McGrattan, Kazuaki Miyachi, Adrian Peralta-Alva (November 2018) “On financing retirement, health, and long-term care in Japan”. IMF.https://www.imf.org/en/Publications/WP/Issues/2018/11/28/On-Financing-Retirement-Health-and-Long-term-Care-in-Japan-46355
This paper uses a dynamic general equilibrium overlapping generations model to analyze the impact of policy options to address the problem of financing retirement, health, and long-term care expenditures. We find financing the costs of aging through gradual increases in consumption tax delivers a better macroeconomic performance and higher welfare than other options such as raising social security contributions, debt financing, and a uniform increase in health and long-term care copayments.
Takashi Oshio, Akiko S. Oishi, Satoshi Shimizutani (November 2018) “Social security programs and the elderly employment in Japan”. NBER.https://www.nber.org/papers/w25243
We examine how the change in the elderly’s employment rates is associated with changes in incentives of social security and related programs. Our results suggest a reduction in tax to retire early is associated with the recent recovery of employment rates for men aged 60 and over and for women aged 55-64 years.
Yi Fuxian (4 January 2019) “Worse than Japan: how China’s looming demographic crisis will doom its economic dream”. South China Morning Post. https://www.scmp.com/comment/insight-opinion/asia/article/2180421/worse-japan-how-chinas-looming-demographic-crisis-will
Hunter Clark, Thomas Klitgaard (15 August 2018) “Will demographic headwinds hobble China’s economy?” Liberty Street Economics. http://libertystreeteconomics.newyorkfed.org/2018/08/will-demographic-headwinds-hobble-chinas-economy.html
Prime Minister’s Office, Sweden (March 2013) “Future challenges for Sweden: Final report of the Commission on the future of Sweden”. https://www.regeringen.se/contentassets/389793d478de411fbc83d8f512cb5013/future-challenges-for-sweden–final-report-of-the-commission-on-the-future-of-sweden
Mårten Palme, Lisa Laun (December 2018) “Social security reforms and the changing retirement behavior in Sweden”. NBER. https://www.nber.org/papers/w25394
Tine Rostgaard (2014) “Family policies in Scandinavia”. Aalborg Universitet. http://vbn.aau.dk/files/216735568/Rostgaard_Family_policies_in_Scandinavia.pdf
Tito Boeri, Pietro Garibaldi, Espen Moen (20 August 2017) “Closing the retirement door and the lump of labor”. https://www.bi.edu/globalassets/forskning/institutt-for-samfunnsokonomi/seminar-v17/garibaldi.pdf
A case study on Italy’s 2011 reform to increase the retirement by up to six years. Our results indicate an increase in the number of locked-in workers crowded out the youth. Quantitatively, the policy change accounts approximately for 60 percent of the reduction in youth employment and for 80 percent of the increase in the number of older workers. These results are relevant in light of the old-in young-out dynamics observed in Europe.
Wolfgang Frimmel, Rudolf Winter-Ebmer (28 October 2015) “The contribution of the wage structure to early retirement behaviour”. https://voxeu.org/article/contribution-wage-structure-early-retirement-behaviour
Austrian data is examined to see how firms can influence retirement decisions through the wage structure. Deferred compensation schemes characterised by steeper seniority-wage profiles are associated with workers retiring earlier. Policymakers could focus on creating incentives for firms to flatten wage profiles.
Productivity Commission (2013) “An ageing Australia: Preparing for the future”. Commission Research Paper, Canberra. http://www.pc.gov.au/research/completed/ageing-australia/ageing-australia.pdf
Serkan Arslanalp, Jaewoo Lee, Umang Rawat (27 July 2018) “Demographics and interest rates in Asia”. IMF. https://www.imf.org/en/Publications/WP/Issues/2018/07/27/Demographics-and-Interest-Rates-in-Asia-46116
This paper provides empirical evidence of the relationship between demographics and interest rates among advanced and emerging economies. It finds capital account openness limits the direct sensitivity of a country’s interest rates to its demographics. The results suggest rapid aging will apply downward pressure on interest rates in Asia.
Hua Chai, Jun Il Kim (7 December 2018) “Demographics, pension systems and the saving-investment balance”. IMF. https://www.imf.org/en/Publications/WP/Issues/2018/12/07/Demographics-Pension-Systems-and-the-Saving-Investment-Balance-46384
This paper studies the effect of demographic change on national saving, global interest rates, and international capital flows, focusing on the role of the public pension system – using a small open economy overlapping generations model. We find the generosity of the pension system plays an important role in determining the movement of the global interest rate and patterns of international capital flows.
Mai Chi Dao, Callum Jones (7 December 2018) “Demographics, old-age transfers and the current account”. IMF. https://www.imf.org/en/Publications/WP/Issues/2018/12/07/Demographics-Old-Age-Transfers-and-the-Current-Account-46386
This paper reviews the relationship between demographics and long-run capital flows. The two region overlapping generations model (where countries differ in their population growth and mortality risk) predicts population structure and life expectancy affect current account levels. While countries with generous unfunded transfer schemes tend to have lower saving and more capital inflows over the long-run, this effect may be dampened by natural limits (on taxation) of these schemes.
Marcin Bielecki, Michał Brzoza-Brzezina, Marcin Kolasa (5 March 2019) “The impact of population ageing on monetary policy”. https://voxeu.org/article/impact-population-ageing-monetary-policy
This column shows that low fertility rates and increasing life expectancy substantially lower the natural rate of interest. As a consequence, central banks are more likely to hit the lower bound constraint on the nominal interest rate and face long periods of low inflation.