Nobel Prize winner James Tobin has made outstanding contributions to modern macroeconomics.In this final collection of his work he examines the economic policies of the United States and its relations with other major economies after 1990.They certainly should, in my opinion, take a pragmatic view of the combination of those goals.
I refer to the proxy that we have in the United States for job vacancies, unfilled vacancieswe don't have a good series for that, but we have a help-wanted index which is a proxy for vacancies.
There's just not a lot of vacancies compared to what you would have expected for the present unemployment rate.
TOBIN: Well, it may be even lower than where we are now.
Robert Gordon, the Northwestern [University] economist who was Mr.
Now it has shifted back again, and the Beveridge curve we see in the later '80s and the '90s looks like the one we saw in the '50s and '60s. For example, in the monthly labor survey they ask people if they lost their job or left their job.
You'd think in a period of tight labor markets where there are a lot of jobs around, and there's not much competition for them among the unemployed, that people will feel confident and secure about leaving their jobs; whereas in bad times they are afraid to leave their jobs and they can be fired more often because the employers don't have to worry about finding someone else.In that respect things look more like the 1960s than the 1970s and '80s.If you think of a graph on which you put vacancies or help-wanted indexes on the vertical axis, and unemployment on the horizontal line, you'll have a downward sloping curve.So this ratio tells a similar story, this ratio of losers to leavers.It too looks like a softer labor market than you would think we have now if you just looked at the unemployment rate; that is, there are not many people who are leaving their jobs, relatively speaking.Maybe they can continue to get lower rates of unemployment without getting any worse inflation than we're having now.It's quite possible that the inflation-safe unemployment rate is even lower than what we have now.In James Tobin’s view, the welfare of populations depends uniquely on these policies and it is important to be aware of their impact., through his service in President Kennedy's administration, his receipt of the Nobel Prize in Economics and in his continuing work at Yale University, James Tobin has often been in the public eye.So it can well be that there has been a favorable shift in the structure of the labor market. There's international competition, which makes it harder for employers to mark up wages into higher prices and therefore stiffens their resistance to wage increases.Also, unions are weak, much weaker than they were, say, 20 years ago.