Economics

Profs. Esther Duflo and Abhijit Banerjee speak with Axios reporter Dave Lawler about how the failure of rich countries to share Covid-19 vaccines and financial assistance will exacerbate global poverty and lead to increased resentment. "Nobody is talking of expanding aid,” says Banerjee. “I think the psychology, unfortunately, in rich countries somehow — even though the U.S. is going to grow faster in this year than it has in modern memory — is that we are in dire straits and we need to keep resources.”

Prof. Daron Acemoglu makes the case in a piece for The Washington Post that there should be oversight of how AI is applied, arguing that current AI technologies are already having tangible impacts on the labor market, the criminal justice system and on democratic discourse and politics. “Will AI be allowed to work increasingly to displace and monitor humans, or steered toward complementing and augmenting human capabilities,” Acemoglu writes, “creating new opportunities for workers?”

New York Times reporter Sarah Kliff and Margot Sanger-Katz spotlights a study by Prof. Amy Finkelstein that demonstrated how Medicaid coverage could improve Americans’ financial health. “It’s a misnomer — it’s not just to insure your health,” says Finkelstein. “It’s actually to protect you economically in the event of poor health.”

Prof. Esther Duflo speaks with Mikaela Cohen of CNBC about how gender inequality, access to childcare and vaccine access are among the issues impacting the return to work in the U.S. and the global economic recovery. “We realized the current system is just not very workable. It just barely works,” says Duflo. “Women sustain themselves by pulling on their own boot straps.” 

New York Times reporter Ben Casselman spotlights a study by Prof. Daron Acemoglu that finds many technological advances have replaced human labor without increasing productivity. “If we automated less, we would not actually have generated that much less output but we would have had a very different trajectory for inequality,” says Acemoglu.

Prof. Jonathan Gruber speaks with Boston Public Radio about the economics behind the music industry. “Music is an incredibly good deal, but part of the reason it’s an incredibly good deal is because musicians don’t make anything,” says Gruber. “Basically the music economy today is exactly where the rest of the economy is today. It’s a superstar economy.”

In a letter to the Financial Times, graduate student Daniel Aronoff makes the case that banks should not serve as the gatekeepers of digital currencies. Aronoff writes that anointing “banks as the gatekeepers would keep the current oligopoly in place and jeopardise many of the possible benefits of digital currency.”

Provost Marty Schmidt speaks with TopUniversities.com reporter Chloe Lane about how MIT has maintained its position as the top university in the world on the QS World University Rankings for 10 consecutive years. “I am honored to have been a part of the MIT community for almost 40 years,” says Schmidt. “It’s a truly interdisciplinary, collaborative, thought-provoking place that encourages experimentation and pushes you to expand your mind. I think it’s a wonderful place to call home.”

Prof. David Autor speaks with New York Times columnist Thomas Edsall about education and income inequality. “If the citizens of a democracy think that ‘progress’ simply means more inequality and stratification, and rising economic insecurity stemming from technology and globalization, they’re eventually going to ‘cancel’ that plan and demand something else,” says Autor.

Greg Rosalsky of NPR’s Planet Money spotlights Prof. Daron Acemoglu’s research exploring how automation is driving inequality in America. Rosalsky notes that Acemoglu hopes his research “will get policymakers to take a new, smarter approach to technological change.”

Prof. Esther Duflo has been named to India’s new economic advisory panel, reports Ganesh Nagarajan for Bloomberg.

Profs. Esther Duflo and Abhijit Banerjee speak with Financial Times reporter Martin Sandbu about the need for better economic “plumbing,” the shortcomings of policy to address climate change and the state of the profession of economics. Duflo notes that before the pandemic there had been improvement in quality of life around the world, "in part because of more focus on these quality of life issues and, I would argue, a little bit more attention given to plumbing and setting pragmatic objectives and programs as opposed to aiming for some more elusive growth.”

A new working paper by MIT researchers finds that automation is replacing more workers than outsourcing, reports Scott Tong for Marketplace. Prof. Daron Acemoglu notes that workers displaced by machines won’t be able to find better quality jobs unless “we invest in new technologies that create new tasks and new opportunities for workers.” 

A new working paper co-authored by Prof. Daron Acemoglu finds that automation technology has been the primary driver of income inequality in the U.S. over the past 40-years. “Offshoring, the decline of unions, and corporate concentration have all played a part in widening the gap between lower-skilled and higher-skilled workers,” reports Bryan Walsh for Axios, “but automation is the single most significant factor, and will likely grow even more important in the years ahead.”

Prof. Chris Knittel speaks with Stacey Vanek Smith on The Indicator from Planet Money podcast about the high price of oil and what that means for electric vehicles. “If everybody believed EVs were taking over next year, we would see oil prices tank now,” says Knittel. “The fact that they’re not tanking suggests that the markets think there’ll be sustained demand for oil for quite some time.”