Category Archives: Macroeconomics

How effective was aid to business during COVID-19?

This podcast moderated by David Wessel of Brookings is very informative. It’s an assessment of the success and failure of several programs of aid to businesses the US government put forth when COVID-19 started to dampen US business activity.

The level of financial support offered to businesses during the pandemic was unprecedented, and clearly kept the decline in consumption less serious than it was feared.

There has been a lot of criticism of these programs, some positive and some negative. It’s important to understand how the programs did work and how they did not. In the future we may be faced with other economic crises and we should know which features worked as intended and which did not, and why not.

It’s a good listen, and there is also a link to a transcript.

How effective was aid to business during COVID-19?

How effective was aid to business during COVID-19?
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Most business incentives don’t work.

We’ve already seen and heard of many instances where business incentives granted by governments to firms moving in have not produced results the politicians wanted.  Why is this?  Which incentives work?  Finally there’s a study that sheds light on this. It’s important advice for local and regional leaders.  One should always take economic research with a grain of salt; but if even a few awful cases could be prevented the benefits for local economies would be great.

Tim Bartik and John C. Austin November 4, 2019

screenshot-www-brookings-edu-2016-10-19-08-47-331

via Most business incentives don’t work. Here’s how to fix them.

Here’s the PDF of the study by Bartik:

Bartik 2019 – Making Sense of Incentives_ Taming Business Incentives to Promote

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Rethinking cluster initiatives

Clusters have been discussed in logistics and maritime circles for many years.  We don’t understand fully the dynamics of clusters, or what leads to their formation.  some researchers are starting to look at it.  This article by Ryan Donohue, Joseph Parilla and Brad McDearman appeared in Brookings news.  They have written a study that substantiates their conclusions.

It’s not easy to get a cluster growing, nor is it easy for a region to support it once it gets started.  One feature of this study is five case studies of well-known clusters. There are many others of course. I’ve posted a link to the study pdf below.

screenshot-www-brookings-edu-2016-10-19-08-47-33

via Rethinking cluster initiatives

PDF: 201807_Brookings-Metro_Rethinking-Clusters-Initiatives_Full-report-final