Today, the Council of Economic Advisers congratulates the three U.S.-based economists who won the 2021 Nobel Prize in Economics: David Card, Joshua D. Angrist, and Guido W. Imbens. 1/
This award also honors the work of the late Alan Krueger, Chair of the Council of Economic Advisers from 2011 to 2013 and a co-author of all three winners. 2/
David Card, of the University of California at Berkeley, has made major empirical contributions to labor economics, using natural experiments and other methods to shed light on important policies, such as minimum wages, education, and immigration. 3/
In a seminal 1994 paper, for example, Card & Krueger studied the 1992 increase in the New Jersey minimum wage as a natural experiment, using fast food restaurants in Pennsylvania, a state with no increase, as a control group. 4/ davidcard.berkeley.edu/papers/njmin-a…
In the paper, Card & Krueger find no evidence that the rise in the NJ minimum wage reduced employment. /5
Joshua Angrist, of MIT, and Guido Imbens, of Stanford University, have been instrumental in advancing the way economics estimates causal relationships. 6/
For example, in a series of papers, Angrist and Imbens refine the econometrics that are the basis for teasing out the causal effects of public policy. 7/ jstor.org/stable/2951620…
In other work, Angrist & Krueger use the timing of a person’s birth to help identify the causal impact of education on earnings. /8 jstor.org/stable/2937954…
Congratulations to all three winners for this richly-deserved honor! /end
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Inflation as measured by CPI increased 0.4% month-over-month in September—slightly above expectations and August’s rate. More than half of the increase came from price increases for food and shelter. 1/
Core inflation—without food/energy—rose 0.2% month-over-month, at expectations and above August’s rate of 0.1%. 2/
Year-over-year, headline inflation rose by 5.4%, slightly above the yearly increase in August, while core inflation rose by 4.0%, holding steady at August’s rate. 3/
Today, CEA released two blogs: the first blog outlines the basics of the debt limit, and the second examines the full impact of its breach. 1/
Although the United States has never defaulted on its Federal obligations due to the debt limit, the negative repercussions are expected to be widespread and catastrophic for Americans and the U.S. (and global) economy, as outlined in our blog. whitehouse.gov/cea/blog/2021/… 2/
In the case of defaulting on its obligations, the U.S. government would not have enough money coming in to make all of its payments towards critical social programs, such as Social Security, Medicare, and unemployment insurance. 3/
Immigrants make important contributions to the U.S. economy. Most directly, immigration increases potential economic output by increasing the size of the labor force. 2/
Immigrants have also been shown to increase innovation, a key factor in generating improvements in living standards. 3/
CEA’s latest blog outlines how the Build Back Better Agenda—which includes the Bipartisan Infrastructure Deal, reconciliation package, and new regulations—reduces emissions while keeping energy costs low for consumers. 1/
Since most greenhouse gas emissions come from energy production, and the costs of energy take up over 8 percent of the income of the typical American low-income household, many fear that reducing carbon emissions will place a burden on consumers through higher prices. 2/
These plans address these concerns in four ways. 3/
The Census Bureau’s annual estimates of income and poverty showed the important role government action played in alleviating poverty and income loss in 2020, when the pandemic led to an economic shutdown and widespread job losses. 1/
Real median household income—which excludes pandemic stimulus payments—fell in 2020, reflecting a decline in the number of people with earnings. 2/
The decline was particularly large for Asian households and relatively small for Black households, although Asian households continued to have the highest median income and Black households the lowest. 3/
Inflation as measured by CPI increased 0.3% month-over-month in August—slightly below expectations and below July’s rate of 0.5%. The deceleration largely reflected a fall in car prices and also in pandemic-affected services. 1/
Core inflation—without food/energy—rose 0.1% month-over-month, below expectations and below July’s rate of 0.3%. 2/
Year-over-year, headline inflation rose by 5.3% while core inflation rose by 4.0%. The deceleration in the year-over-year core measure was more marked than the deceleration in the headline measure, reflecting the relatively faster price growth in food and energy. 3/