Economic Change and Wellbeing: The True Cost of Creative Destruction and Globalization
- Length: 144 pages
- Edition: 1
- Language: English
- Publisher: Routledge
- Publication Date: 2021-09-02
- ISBN-10: 0367862980
- ISBN-13: 9780367862985
- Sales Rank: #0 (See Top 100 Books)
Technological progress and globalization have generated indisputable benefits, but also relevant costs, such as growing economic inequality, economic fluctuations, and financial instability. Mainstream economics has usually considered these costs as temporary, evenly distributed, and more than compensated by the gains of the phases of economic expansion. In this book, which focuses mainly (though not only) on the labor market, the authors contend that the major costs of the intensified process of creative destruction, through which economic change proceeded, have been ignored and the benefits overrated, thus incorrectly estimating the net impact of economic growth on subjective wellbeing. The book argues that the positive consequences of economic change and globalization may not compensate for the negatives, because psychological losses are felt more strongly than gains (due to loss aversion) and the costs are unequally distributed (those on low incomes disproportionately suffer more). The result is an overall reduction in wellbeing and therefore appropriate policies are necessary to allow more people to enjoy the benefits of technological progress without suffering the costs. The authors develop a comprehensive framework in which the socio-psychological context and educational level of a community determine the most suitable policies both for the short and for the long run. The book makes an invaluable contribution to the literature on economic growth and development, labor economics, the economics of wellbeing, and applications of behavioral economics.
The readers that may be interested in this book are economists and other social scientists, but also general readers, since the analysis is maintained simple and accessible. University teachers can use the book for courses on economic growth and development, on labor economics, on the economics of human capital, on the economics of wellbeing, and on applications of behavioral economics.
Cover Half Title Series Page Title Page Copyright Page Contents List of illustrations Introduction 1 Causes and consequences of economic change 1.1 Causes of economic change 1.1.1 Shocks: industrial revolutions (and the pandemic) 1.1.2 Policies 1.1.3 Globalization 1.2 Consequences for the labor market 1.2.1 Temporary employment, labor income share, efficiency, and collective bargaining 1.2.2 Job and wage polarization 1.2.3 Increasing skill and educational mismatches 1.3 Other consequences 1.3.1 Rising inequality and diverging trends in social mobility 1.3.2 The rise of populism and protectionism 2 Traditional (optimistic) theories: growth without regret 2.1 The traditional (maximizing) approach 2.2 The theoretical foundations of globalization and deregulation 2.2.1 “Downturns are temporary and neutral” 2.2.2 “Growth is good for the poor” 2.3 The labor market 2.3.1 “If product demand increases enough there is no unemployment effect of technological progress” 2.4 Inequality and populism 2.4.1 Inequality boosts growth 2.4.2 “Counteracting inequality reduces growth” 2.4.3 The POUM hypothesis 3 The true costs of economic change 3.1 The main weaknesses of the traditional (maximizing) approach 3.2 Creative destruction revisited 3.2.1 The social reward of innovation when cannibalization is pervasive: a more formal treatment 3.3 The impact of change on individuals: a sociopsychological perspective (by Albertina Oliverio) 3.4 Labor market: the costs of flexibility 3.4.1 Pecuniary and nonpecuniary costs of flexibility 3.4.2 Hedonic adaptation to unemployment status? 3.4.3 The cultural determinants of loss aversion and hedonic adaptation 3.4.4 Economic change and the cost of geographical mobility: a neglected issue 3.5 The disproportionate impact of creative destruction on those who have less 4 Some recipes to increase the social return of creative destruction 4.1 The labor market: different policies for different countries and social groups 4.2 The basis of our recipes 4.3 Changing incentives: microregulation revisited 4.3.1 Enhancing people’s flexibility: education, training, and labor market policy revisited 4.3.2 Industrial policy revisited: lessons from the Asian Miracle 4.3.3 Antitrust and consumer protection policy 4.4 Back to the future: macroregulation policy revisited 4.4.1 Back to fiscal policy for full employment? 4.4.2 Chicago plan, helicopter money, e-money: the new role(s) of monetary policy 4.4.3 Fighting tax havens and fiscal dumping 5 Conclusions: looking for sustainable economic change 5.1 Towards a behavioral economic theory of the long run References Index
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