Aspen Economic Strategy Group

Today, the AESG released a new paper, “The Surprising Resilience of Globalization: An Examination of Claims of Economic Fragmentation,” by Brad Setser. In the paper, Setser evaluates the current landscape of global economic integration. He first observes that — despite growing bipartisan skepticism about the value of liberal trade — globalization is not in retreat. The immediate risk facing the global economy, in Setser's view, is better described as unhealthy integration rather than fragmentation. He then identifies a set of three policy reforms to support healthier forms of global integration. Read the complete paper here: https://lnkd.in/gB_439Wu This paper is part of our 2024 annual policy volume, "Strengthening America's Economic Dynamism," which will be released across the remainder of this year. The volume discusses topics including US trade and industrial policy, fiscal and state capacity, AI and the labor market, and the economics of crime. Read this year’s introduction on our website: https://lnkd.in/gukaKd7f

#MRCBG affiliate Christopher Ong, #MRCBG Director Lawrence H. Summers and Harvard Kennedy School's David Deming discuss how past episodes of tech disruption can shed light on the potential impact of AI on the U.S. labor market in this recent Aspen Economic Strategy Group Paper. Read it here - https://lnkd.in/ew8z-Y2t

Why should the U.S. wish our economic policy to be more like China’s? China’s central planning will not be remembered as a long-term success. The U.S is a global manufacturing powerhouse. And the American Dream is not dead. By me, in National Review. Link: https://lnkd.in/dRWsGEJE Cc: American Enterprise Institute, Aspen Economic Strategy Group, The Aspen Institute.

The conversation around the U.S. strategic competition with China often seems to assume that the United States is “lagging” China, and that the U.S. must “catch up” to Chinese manufacturing using protectionist measures. But why should the U.S. wish our economic policy to be more like China’s? China’s central planning will not be remembered as a long-term success. It has led to overinvestment in many sectors, a deeply imbalanced economy with too little consumption spending, a growth model struggling to transition away from exports, massive overbuilding of real estate, and an inadequate safety net. State policies have led to demographic problems that will have enormous economic ramifications. Moreover, to the limited extent that China’s model is working, it only works because their economy is embedded in an authoritarian state with a compliant industrial sector. Rather than uniting our allies, the protectionist policies of the Trump and Biden administrations have antagonized allies and called into question whether the U.S. is a reliable partner. Rather than pursuing narrow and clear objectives, the U.S.’s goals are broad, muddled, and in conflict with each other. A better approach would clearly acknowledge that China is a bad actor while taking a judicious approach, targeting a narrow set of practices, products, and technologies that clearly warrant intervention on economic security grounds, and pursuing that intervention in concert with as broad a coalition of allies as possible. It would not conflate economic security goals with domestic economic considerations, like trends in manufacturing employment. It would involve strengthening — and certainly not continuing to weaken — international institutions like the World Trade Organization. Finally, it would proceed with confidence in the American system of democratic capitalism. Check out my new paper, "Protectionism is Failing and Wrongheaded: An Evaluation of the Post-2017 Shift toward Trade Wars and Industrial Policy." Link: https://lnkd.in/ee58BBwQ Cc: American Enterprise Institute, Aspen Economic Strategy Group, The Aspen Institute.

How will recent advances in #ArtificialIntelligence (AI) impact the job market? That question is top of mind for just about anyone thinking about the economy right now, and with the current pace of progress, the answer seems to be changing by the day. A new paper released this morning by the AESG takes a step back, putting these developments into historical perspective. In “Technological Disruption in the US Labor Market,” authors David Deming, Christopher Ong, and Lawrence H. Summers assess the potential long-term impact of AI on the labor market by looking at more than 140 years of labor market data. They examine how the structure of jobs across the economy changed after the introduction of “general-purpose technologies” (GPTs), like steam power, electricity, and IT tools. The authors then look for early signs of such disruption from AI in the labor market today. One sign they see: the rapid rise of STEM jobs across the economy. Since 2010, the share of employment in STEM jobs has increased by more than 50%, fueled by growth in software and computer-related occupations. On the other hand, growth in most low-paid service-sector jobs have all but stalled out, falling back recently to levels seen 20 years ago. Read the full paper here: https://lnkd.in/ew8z-Y2t

Today, the AESG released a new paper, "Protectionism is Failing and Wrongheaded: An Evaluation of the Post-2017 Shift toward Trade Wars and Industrial Policy," written by Michael Strain. The paper is part of the AESG's 2024 annual policy volume, "Strengthening America's Economic Dynamism", which will be released across the remainder of this year. The paper evaluates the shift towards increasingly protectionist and nationalist policies carried out by the past two presidential administrations. In the paper, Strain argues that the turn to such economic policies has not only been ineffective by its own standards, failing to raise employment and reduce America’s reliance on China, but also is more fundamentally misguided. Strain concludes that, while free trade has been disruptive, populist policies adopted in response will hurt workers, not help them. Instead, he writes that economic policymakers should focus on connecting workers to opportunities created from open trade, rather than enacting protectionist policies and attempting to recreate jobs of the past. Read the complete paper here: https://lnkd.in/gBPT8R7s

HAPPENING NOW: Stream “Strengthening America’s Economic Dynamism” LIVE from Aspen. Watch here: https://lnkd.in/gf9t_xSt

TODAY 3:30PM ET/1:30PM MT | Tune into the Aspen Economic Strategy Group's event, "Strengthening America's Economic Dynamism," LIVE from Aspen. Americans are facing an era of economic reconfiguration driven by rising global tensions, technological change, and a populist backlash to the economic status quo. Leaders on both sides of the political aisle are increasingly turning away from free-market principles and endorsing protectionist trade policies and government industrial policy. This shift threatens to end an era characterized by international economic cooperation and broad-based global growth. What does this trend mean for America’s economic dynamism? What steps should US policy and business leaders take to advance innovation, growth, and widespread economic prosperity? Featuring AESG Director Melissa S. Kearney, in conversation with Lawrence H. Summers and Robert B. Zoellick. Livestream: https://lnkd.in/g7vzAsuc Event Webpage: https://lnkd.in/gJx_nJU6

THIS WEDNESDAY 7/31 | 3:30PM ET/1:30PM MT Tune into "Strengthening America's Economic Dynamism" LIVE from Aspen. Americans are facing an era of economic reconfiguration driven by rising global tensions, technological change, and a populist backlash to the economic status quo. Leaders on both sides of the political aisle are increasingly turning away from free-market principles and endorsing protectionist trade policies and government industrial policy. This shift threatens to end an era characterized by international economic cooperation and broad-based global growth. What does this trend mean for America’s economic dynamism? What steps should US policy and business leaders take to advance innovation, growth, and widespread economic prosperity? Featuring AESG Director Melissa Kearney in conversation with AESG members Lawrence H. Summers and Robert B. Zoellick. Register here: https://lnkd.in/gJx_nJU6

In case you missed it: Commerce Department CHIPS Program Office Director Michael Schmidt stressed the importance of U.S. leadership in semiconductor chip manufacturing and innovation during a conversation hosted by the Aspen Economic Strategy Group yesterday. Watch the full conversation on C-SPAN at the link below.