Six leading experts from academia and industry join as new members.
Contact: Kelly Friendly
Washington, DC, January 11, 2023- The Aspen Economic Strategy Group (AESG) today released its annual policy volume, Economic Policy in a More Uncertain World, to mark the group’s 5th anniversary. The volume is designed to provide policy-relevant evidence about current challenges facing the economy and is a culmination of the AESG’s work over the past year.
The policy volume can be read in full at https://www.economicstrategygroup.org/publication/economic-policy-in-a-more-uncertain-world/”
Co-chairs Henry M. Paulson, Jr. and Timothy Geithner lay out the stakes for the US economy in a forward by asking: Can US firms continue to innovate the technologies of the future? Will the recent push for industrial policy help or hurt American firms? To what extent can public policy alter America’s demographic trends? The book’s seven chapters, edited by AESG Director Melissa S. Kearney and Deputy Director Amy Ganz, focus on the long-term economic headwinds posed by demographic change – declining fertility and population aging – and what this smaller worker to population ratio means in terms of slower economic growth, reduced revenue, and lower productivity growth.
The major themes and papers are outlined here:
US DEMOGRAPHIC CHALLENGES AND POTENTIAL POLICY RESPONSES
Melissa S. Kearney and Phillip Levine’s chapter, The Causes and Consequences of Declining US Fertility, examines some of the potential explanations for the decline in fertility and outlines why there is little reason to expect this secular trend to reverse itself.
Increasing immigration is one potential policy response to a shrinking workforce as Tara Watson describes in her chapter, Why and How to Expand US Immigration. Watson outlines the economic costs and benefits of immigrants in the US and potential reforms to the system.
John Sabelhaus’ chapter, Will Population Aging Push Us Over the Fiscal Cliff, breaks down the aging and non-aging components of the current debt trajectory and the distributional choices that are made by rolling over the debt from one generation to the next.
ECONOMIC SECURITY, SCIENCE FUNDING, AND INNOVATION POLICY
Ufuk Akcigit and Sina Ates outline another policy response to the demographic changes in their chapter, New Insights for Innovation Policy. This paper goes deep into the links between competition and dynamism and looks at the challenges of promoting long run productivity growth through science and innovation. They argue that policies such as open trade, immigration and foreign investment can help reinvigorate innovation at lower cost to taxpayers.
Amy Ganz and Emily Vincent in their chapter, Seven Recent Developments in US Science Funding, provide an overview of the composition and structure of US scientific funding and performance.
CHALLENGES FACING US WORKERS AND FIRMS
Gordon Hanson’s chapter, Local Labor Market Impacts of the Energy Transition, looks at the impact of the green energy transition on local labor markets and examines policy responses that would avoid repeating the painful lesson from the decline of the coal industry and rise of globalization and automation.
Jeffrey Clemens and Stan Veuger’s chapter, Lessons from COVID-19 Aid to State and Local Governments from the Design of Federal Automatic Stabilizers, outlines why federal aid allocated to state and local governments during the COVID-19 pandemic was too generous and describes three automatic stabilizer mechanisms that could be implemented and are budget-neutral over the business cycle.
Co-chairs Paulson and Geithner have assembled a bipartisan group of distinguished leaders and thinkers to foster the exchange of economic policy ideas. Today, the AESG announces six new members:
Erik Brynjolfsson- Jerry Yang and Akiko Yamazaki Professor and Senior Fellow, Stanford University
Adena Friedman- Chair & CEO, Nasdaq, Inc.
The Honorable Rob Portman- Former US Senator, OMB Director & US Trade Representative
Virginia “Ginni” Rometty- Former Chairman, President & CEO IBM; Co-Chair OneTen
Andrew Ross Sorkin- Columnist & Editor, The New York Times & CNBC
Brad Smith – Vice Chair and President, Microsoft
“We are thrilled with the addition of these talented new members who are committed to advancing solutions to some of our nation’s most pressing economic issues,” said Melissa Kearney. “The United States is beset with longer-run challenges that will require sustained focus. AESG members share a commitment to fact-based economic analysis, respectful disagreement, and principled compromise to inform debate and advance solutions.”
The Aspen Economic Strategy Group (AESG), a program of the Aspen Institute, is composed of a diverse, bipartisan group of distinguished leaders and thinkers with the goal of promoting evidence-based solutions to significant U.S. economic challenges. Co-chaired by Henry M. Paulson, Jr. and Timothy Geithner, the AESG fosters the exchange of economic policy ideas and seeks to clarify the lines of debate on emerging economic issues while promoting bipartisan relationship-building among current and future generations of policy leaders in Washington. More information can be found at https://economicstrategygroup.org/.
The Aspen Institute is a global nonprofit organization committed to realizing a free, just, and equitable society. Founded in 1949, the Institute drives change through dialogue, leadership, and action to help solve the most important challenges facing the United States and the world. Headquartered in Washington, DC, the Institute has a campus in Aspen, Colorado, and an international network of partners. For more information, visit www.aspeninstitute.org.