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Renewing America

Ideas and initiatives for rebuilding American economic strength.

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Good and Bad Inequality

by Michael Spence
Reginald Rounds Ferguson Missouri protests Jackson Hole Economic Policy Symposium Wyoming Reginald Rounds of Ferguson, Missouri protests during the opening reception of the Jackson Hole Economic Policy Symposium in Jackson Hole, Wyoming August 21, 2014 (David Stubbs/Courtesy Reuters).

Rising income and wealth inequality in many countries around the world has been a long-term trend for three decades or more. But the attention devoted to it has increased substantially since the 2008 financial crisis: With slow growth, rising inequality bites harder. Read more »

Do-Nothing Congress Is Your Fault

by Renewing America Staff
Protest Government Shutdown Congress Los Angeles California Marcia Noboa, 65, protests against the government shutdown and potential cuts to Social Security and Medicare outside the Federal Building in Los Angeles, California (Lucy Nicholson/Courtesy Reuters).

Conventional wisdom holds that Congress is more polarized than the American people as a whole. However, in a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag explores evidence showing that voter preferences may have long been misread. Congressional districts that are moderate on average may not actually contain large densities of moderate voters. Instead, there may be a similar number of partisan Democrats and Republicans, with only a small moderate minority.

Why Have Americans Stopped Moving?

by Renewing America Staff
flag for-sale sign Capitol Hill Washington A U.S. flag decorates a for-sale sign at a home in the Capitol Hill neighborhood of Washington (Jonathan Ernst/Courtesy Reuters).

Many state-level policymakers propose lowering income taxes to lure people from other states. In a new column for Bloomberg View, CFR Adjunct Senior Fellow Peter Orszag explains that income tax rates are not a major driver of interstate migration. Rather, people move to find warmer weather, cheaper housing, and, most importantly, better jobs.

Politics-Proof Economies?

by Michael Spence
Federal workers demonstrate for an end to the U.S. government shutdown on the west front of the U.S. Capitol in Washington, October 13, 2013 (Jonathan Ernst/Courtesy Reuters). Federal workers demonstrate for an end to the U.S. government shutdown on the west front of the U.S. Capitol in Washington, October 13, 2013 (Jonathan Ernst/Courtesy Reuters).

This post was co-authored with David Brady, Deputy Director and Senior Fellow at the Hoover Institution and Professor of Political Science at Stanford University.

MILAN–Governments’ inability to act decisively to address their economies’ growth, employment, and distributional challenges has emerged as a major source of concern almost everywhere. In the United States, in particular, political polarization, congressional gridlock, and irresponsible grandstanding have garnered much attention, with many worried about the economic consequences. Read more »

Overshooting in Emerging Markets

by Michael Spence
Chinese banknotes are seen at a vendor's cash box at a market in Beijing February 14, 2014 (Kim Kyung-Hoon/Courtesy Rueters). Chinese banknotes are seen at a vendor's cash box at a market in Beijing February 14, 2014 (Kim Kyung-Hoon/Courtesy Rueters).

Until relatively recently, countries’ so-called middle-income transitions were largely ignored–in part because what was supposed to be a transition often became a trap. A few economies in Asia–particularly Japan, South Korea, and Taiwan–sailed through to high-income status with relatively high growth rates. But the vast majority of economies slowed down or stopped growing altogether in per capita terms after entering the middle-income range. Read more »

The Real Challenges to Growth

by Michael Spence
A man looks down as he waits in line to enter a government-run employment office in Madrid (Sergio Perez/Courtesy Reuters). A man looks down as he waits in line to enter a government-run employment office in Madrid (Sergio Perez/Courtesy Reuters).

Advanced economies’ experience since the 2008 financial crisis has spurred a rapidly evolving discussion of growth, employment, and income inequality. That should come as no surprise: For those who expected a relatively rapid post-crisis recovery, the more things stay the same, the more they change. Read more »

The Distributional Challenge

by Michael Spence
A pedestrian looks at an electronic board displaying various stock prices outside a brokerage in Tokyo (Yuya Shino/Courtesy Reuters). A pedestrian looks at an electronic board displaying various stock prices outside a brokerage in Tokyo (Yuya Shino/Courtesy Reuters).

Assessing the recent past and looking forward to the near term is a natural end-of-year exercise. When it comes to the global economy in 2013 and 2014, it may well be a necessary one as well.

In the past year, systemic risk declined. Europe came together around the need to stabilize the eurozone, with the European Central Bank and Germany playing the leading roles. Read more »

2013 By the Numbers: The Good, the Bad, and the Ugly

by Edward Alden
The numbers "2013" are illuminated atop 1 Times Square (Gary He/Courtesy Reuters). The numbers "2013" are illuminated atop 1 Times Square (Gary He/Courtesy Reuters).

As 2013 fades into 2014, it seems like a good time to do a quick performance check on the United States. CFR’s Renewing America initiative is premised on the understanding that the United States’ ability to influence world events rests on a robust, competitive economy. While any given year is at best a snapshot in a very long game, some of the numbers from this year are nonetheless quite striking (and more on the positive side than not). And so, with apologies to Clint Eastwood, my snap assessment. Read more »

What’s Stopping Robust Recovery?

by Michael Spence
People walk past screens at the bourse in Madrid, as they are reflected on the surfaces of tables (Andrea Comas/Courtesy Reuters). People walk past screens at the bourse in Madrid, as they are reflected on the surfaces of tables (Andrea Comas/Courtesy Reuters).

MILAN – The growth map of the global economy is relatively clear. The U.S. is in a partial recovery, with growth at 1.5 to 2 percent and lagging employment. Europe as a whole is barely above zero growth, with large variations among countries, though with some evidence of painful re-convergence, at least in terms of nominal unit labor costs. China’s growth, meanwhile, is leveling off at 7 percent, with other developing countries preparing for higher interest rates. Read more »

New Zealand Offers Lessons for the U.S. Housing Bubble

by Renewing America Staff
New Zealand resident Brett Plumer nails a national flag to his house in Auckland (Bogdan Cristel/Courtesy Reuters). New Zealand resident Brett Plumer nails a national flag to his house in Auckland (Bogdan Cristel/Courtesy Reuters).

The Federal Reserve may have lessons to learn from New Zealand about managing a mortgage market. In an op-ed for Bloomberg, CFR Adjunct Senior Fellow Peter Orszag explains that by imposing limits on high loan-to-value mortgages, the Reserve Bank of New Zealand is helping to manage housing prices.