The first month of the year (of the new decade) got off to a busy start for Brookings experts. Here’s a small sample of some of their research and commentary in January 2020.
1. Crippling the capacity of the National Security Council
The National Security Council (NSC) offers advice to the president on national and foreign policy issues. Kathryn Dunn Tenpas observes that “the departure of a single National Security Adviser results in additional NSC departures, adding to the disarray, inhibiting performance, raising the anxiety levels, and decreasing the level of expertise (among other dysfunctions).” The constant changing of the NSC “poses a risk to the country at large,” she finds.
2. The new tools of monetary policy
Ben Bernanke, a distinguished fellow in Economic Studies at Brookings, delivered the 2020 American Economic Association (AEA) Presidential Address on the new tools of monetary policy, which include quantitative easing and forward guidance. As interest rates reached zero during the Great Recession, central banks used these “untested” tools to respond. Bernanke concludes that “the new policy tools are effective and that, given current estimates of the neutral rate of interest, quantitative easing and forward guidance can provide the equivalent of about 3 additional percentage points of short-term rate cuts.”
3. Low unemployment isn’t worth much if the jobs barely pay
In their research, Martha Ross and Nicole Bateman show that “millions of hardworking American adults struggle to eke out a living and support their families on very low wages.” Their analysis shows that 44% of all workers aged 18 to 64 earn, on average, about $18,000 per year—“barely enough to live on,” and that the majority of these jobs are concentrated in a small number of occupations.
4. Averting a new Iranian nuclear crisis
President Donald Trump withdrew the United States from of the Joint Comprehensive Plan of Action (JCPOA), aka the Iran nuclear deal, in 2018. This month, Iran announced it no longer considers itself bound by the deal’s restrictions on its nuclear program. Robert Einhorn writes that Iran has strong reasons to go slow on increasing its nuclear capacity, and that the United States and other signatories to the deal should “do what they can to reinforce what may be Iran’s inclination to proceed cautiously,” including pursuing “an interim nuclear arrangement [JCPOA 2.0] that could temporarily freeze or roll back increases in Iran’s nuclear program in exchange for limited sanctions relief.”
5. The job-creating role of “industries without smokestacks”
Structural change is taking place in Africa that historically has not been seen in the development of industrialized countries, observe Zaakhir Asmal, Haroon Bhorat, and John Page in the new Foresight Africa 2020 report. While traditional manufacturing occupies a small place in African economies, growing sectors like agro-industry, tourism, transport, logistics, and some business services are a growing class of what they call “industries without smokestacks” that could be key to growth and job opportunities on the continent.
6. Lessons in productivity from Japan, the US, and Germany
Economic growth comes from having more workers and also increased output per worker, that is, increased productivity. But as the labor forces in advanced economies shrink, what is happening to productivity? Martin Neil Bailey, Barry Bosworth, and Siddhi Doshi look at patterns of productivity growth and decline in the U.S., Japan, and Germany, across a variety of industry sectors. The data, the authors write, “can cast light on the nature of the productivity growth slowdown and may help disentangle its causes. Although these results can guide policy measures that are designed to improve the rate of growth of productivity, there is no guarantee the causes of the slowdown will be uncovered.”
7. Renewables, land use, and local opposition
“Decreasing greenhouse gas emissions in the electricity sector is crucial to avoiding the worst impacts of climate change,” Samantha Gross writes. But increased attention on renewable power sources also brings new conflicts over land use, she observes, because wind and solar generation “require at least 10 times as much land per unit of power produced than coal- or natural-gas fired plants,” and many people object to large generation facilities near their homes that may not even benefit from the power source. Gross says policymakers need to take these considerations into account.
8. Who’s to blame for high housing costs?
Why does housing cost so much in many parts of the U.S.? Jenny Schuetz examines multiple factors, including the financial ecosystem of housing development, land use regulations, regulatory barriers, and how costs of development are distributed. “State and local policymakers across the U.S. are grappling with how to make housing more affordable,” she writes, “But because our housing production system is so complicated, it’s difficult to even reach a shared understanding pf the problems.”
9. Migrant inventors and the technological advantage of nations
What impact do migrants have on innovation in the countries where they are received? In their new investigation, Dany Bahar, Prithwiraj Choudhury, and Hillel Rapoport investigate the question, finding that “countries are 25 to 60 percent more likely to gain advantage in patenting in certain technologies given a twofold increase in the number of foreign inventors from other nations that specialize in those same technologies.”
10. Twitter’s ban on political advertisements hurts our democracy
Niam Yaraghi explains that Twitter’s announced ban on political advertisements “will have dire consequences for American democracy.” One challenge is how to define political advertising, and how to disentangle election-focused items from issue advocacy that many people care about. Also, Yaraghi argues, such a ban will not stop disinformation. He recommends steps to improve ad transparency, rather than an outright ban.