Economics for Inclusive Prosperity

They’re called priority technologies. And yes, Artificial Intelligence is one of them, but it’s not the only one. And it seems like almost every day a new US vulnerability in these strategically critical products and commodities is exposed. The Iran War is laying bare the American military’s lack of drone technology and a comprehensive anti-drone strategy. China’s dominance in controlling critical minerals threatens everything from national defense systems to global supply chains to the clean energy transition. American advantages in areas like quantum computing and biotech are under threat too. Meanwhile, the US continues its decades-long trend of bleeding manufacturing jobs. But thank goodness for positive thinkers like MIT Professor Elisabeth Reynolds, who can look into that mess and see a win-win situation. Reynolds is a former Special Assistant to President Joe Biden on manufacturing and economic development as a member of his National Economic Council, and has worked on rebuilding U.S. manufacturing capabilities at the federal and state level, including for three Massachusetts governors. At MIT, she’s been the director of the Institute’s Industrial Performance Center, a co-director of the MIT Task Force on the Work of the Future, and edited a new book called “Priority Technologies: Ensuring US Security and Shared Prosperity.” She says the U.S. needs to go beyond “reshoring” manufacturing to what she calls “reindustrializing” — creating a new ecosystem connecting the successful U.S. innovation economy to new, advanced domestic manufacturing capabilities. That could both shore up American national security and economic resiliency and create new good jobs of the kind the country sorely needs.
About our Guest:
Elisabeth Reynolds is a professor of the practice focused on systems of innovation, manufacturing and industrial competitiveness, in the context of national and regional economic development. Her recent research and policy work has focused on growing innovative companies to scale, digital technology adoption and industrial decarbonization. Since the fall of 2023, She has co-led, with Professor Simon Johnson of Sloan, the Priority Technologies seminar, which focuses on key areas of interest to U.S. national and economic security at the intersection of technology, innovation and policy. The seminar led to a new book which she edited: “Priority Technologies: Ensuring US Security and Shared Prosperity.” Reynolds was Special Assistant to President Biden for Manufacturing and Economic Development at the National Economic Council (NEC, 2021/2022) where she helped lead the Administration's work on national manufacturing strategy, supply chain resilience and industrial strategy. Prior to her work at the White House, she was Principal Research Scientist and executive director of the MIT Industrial Performance Center (2010-2021), an interdisciplinary research center focused on systems of innovation and industrial transformation. She also co-led, with Professors David Autor and David Mindell, the MIT Task Force on the Work of the Future (2018-2021) which examined the relationship between emerging technologies, the nature of work, and U.S. institutions. In 2022, Autor, Mindell and Reynolds published Work of the Future: Building Better Jobs in an Age of Intelligent Machines. She has worked on rebuilding U.S. manufacturing capabilities at the federal and state level, including for three Massachusetts governors. She represents MIT on the board of the Manufacturing USA Institute, Advanced Functional Fabrics of America (AFFOA), is a board member of the Advanced Regenerative Medicine Institute/BioFab USA, and is also an advisor to the Special Competitive Studies Project, a Washington think tank focused on U.S. national security and critical technologies. She holds a B.A. in government from Harvard. She was the Fiske Scholar at Trinity College, Cambridge and holds a Master’s in Economics from the University of Montreal and a Ph.D. from MIT’s Department of Urban Studies and Planning.
Resources mentioned in this episode:
“Industrial Decarbonization: Pathways for Productivity and Growth” (white paper)

“Priority Technologies: Ensuring US Security and Shared Prosperity.” (book)

Economics for Inclusive Prosperity (EfIP) is a network of academic economists from Harvard, Princeton, Columbia, and other leading universities who are committed to an inclusive economy and society. EfIP members are working to transform their field around a new vision of prosperity—a vision that includes traditional economic metrics, but also expanded measures of wellbeing including access to health, to democratic participation, and to a livable planet. They’re also highlighting the important changes in economics that are already underway.

Host Ralph Ranalli is a longtime Harvard podcaster, an entrepreneur, and former journalist. He previously hosted “HKS PolicyCast,” the award-winning flagship podcast of the Harvard Kennedy School. He holds a BA in political science from UCLA and a master’s in journalism from Columbia University.

The Economics for Inclusive Prosperity Podcast is recorded at the Malcolm Wiener Center for Social Policy at the Kennedy School of Government at Harvard University. The co-directors of Economics for Inclusive Prosperity are Dani Rodrik, Stefanie Stantcheva, Suresh Naidu, Atif Mian, and Ilyana Kuziemko. The show is produced by Ralph Ranalli. The executive producer is Rohan Sandu.

When we talk about inclusive prosperity, what's top of mind is usually the 40-plus years of stagnation for the bottom 90% of American wage earners that began in the mid-1970s. It’s been the primary driver today’s record levels of inequality. University of Massachusetts economist Arin Dube has spent a significant portion of his career studying what caused that pay gap, which began with a decoupling of wage growth from productivity growth, and ways to address it. In fact, he’s been called the “go to guy on minimum wages” by Nobel Prize-winning economist Paul Krugman. Now Dube has a new book titled “The Wage Standard: What's Wrong in the Labor Market and How to Fix It,” where he argues that U.S. wage stagnation has not been about irresistible economic or societal forces, but instead mostly about policy choices. Among those choices has been a reluctance among politicians to raise the minimum wage—including the federal minimum wage, which he says at $7.25 per hour is so low that it’s functionally like having no minimum at all. His research has gone a long way to dispelling stubborn myths about minimum wages that have persisted despite growing empirical evidence to the contrary, but also to explain other forces driving employment monopsony—the market condition where a small number of employers effectively control the market for jobs and pay. To address those forces, Dube is advocating a number of measures ranging from trading slightly higher inflation for tighter labor markets to sectoral bargaining and stronger unions.

Resources mentioned in this episode:

The Wage Standard: What's Wrong with the Labor Market and How to Fix It (book) 

Monopsony in Movers: The Elasticity of Labor Supply to Firm Wage Policies (paper) 

About our Guest:

Arin Dube is the Provost Professor of Economics at the University of Massachusetts Amherst. His research focuses on labor economics, along with health economics, public finance, and political economy. His current areas of research include wage inequality, the importance of labor market competition, minimum wage effects on employment and inequality, the role of fairness concerns at the workplace, the interplay of behavioral biases and labor market power, the impact of unemployment benefits, and the role of firm wage policies in explaining the growth in inequality. He has also conducted research on employer health mandates; unions and collective bargaining; outsourcing and sub-contracting; gun laws and violence; and capitalization of private information in stock prices. Dube received his B.A. in Economics and M.A. in Development Policy from Stanford University, and his Ph.D. in Economics from the University of Chicago. He has previously held positions of Visiting Professor at the MIT Department of Economics and Boston University’s Questrom School of Business. He is a NBER research associate, a research fellow at IZA, and a research affiliate of the MIT Stone Center on Inequality and Shaping the Future of Work.

Economics for Inclusive Prosperity (EfIP) is a network of academic economists from Harvard, Princeton, Columbia, and other leading universities who are committed to an inclusive economy and society. EfIP members are working to transform their field around a new vision of prosperity—a vision that includes traditional economic metrics, but also expanded measures of wellbeing including access to health, to democratic participation, and to a livable planet. They’re also highlighting the important changes in economics that are already underway.

Host Ralph Ranalli is a longtime Harvard podcaster, an entrepreneur, and former journalist. He previously hosted “HKS PolicyCast,” the award-winning flagship podcast of the Harvard Kennedy School. He holds a BA in political science from UCLA and a master’s in journalism from Columbia University.

The Economics for Inclusive Prosperity Podcast is recorded at the Malcolm Wiener Center for Social Policy at the Kennedy School of Government at Harvard University. The co-directors of Economics for Inclusive Prosperity are Dani Rodrik, Stefanie Stantcheva, Suresh Naidu, Atif Mian, and Ilyana Kuziemko. The show is produced by Ralph Ranalli. The executive producer is Rohan Sandu.

Today we’re talking about food, specifically agricultural R&D. The world’s population has grown from about 2 billion to 8 billion people in the last century. That’s a lot of mouths to feed. But the silver lining was that technology was advancing—particularly during the so-called “Green Revolution” from the 1940s to the 1980s when new high-yield grain varieties, fertilizers, and pesticides dramatically increased harvests in developing nations like Mexico and India. But during that time, economists were also developing an economic theory called the “inappropriate technology hypothesis.” It says that technological innovations developed for wealthy countries are specifically designed for conditions and environments in those countries, meaning they were often unproductive or inapplicable in developing countries. Fast-forward to today, when the effects of climate change—rising heat, drought, and extreme weather events—are already affecting farmers around the world, meaning we’ll need even more technological breakthroughs to mitigate them. But will those technologies help where they are needed most? In their research, economists Jacob Moscona of MIT and Karthik Sastry of Princeton have taken a new look at the intersection of the Inappropriate Technology Hypothesis—they like to call it “technological mismatch”—and agricultural research and development. They say there is a systematic rich-world bias in ag R&D that explains a large share of global disparities in both the adoption of new technology and agricultural productivity. They’re here today to discuss where that bias comes from, it’s effects, and some potential responses.

Resources Mentioned in this Episode: 

"Inappropriate Technology: Evidence from Global Agriculture"

About our Guests:

Jacob Moscona is the 3M Career Development Assistant Professor of Economics at MIT. His research explores broad questions in economic development, with a focus on the role of innovation, the environment, and political economy. His work investigates the forces that drive the rate and direction of technological progress, as well as how new technologies shape global productivity differences and adaptation to major threats like climate change. He also studies the political economy of economic development, with a focus on how variation in social organization and institutions affects patterns of conflict and cooperation. Moscona joined MIT's Economics Department as an Assistant Professor in July 2024. He received his PhD from MIT in 2021 and was a Prize Fellow in Economics, History, and Politics at Harvard from 2021-2024. 

Karthik Sastry is an Assistant Professor of Economics and Public Affairs at Princeton University, in the Department of Economics and the School for Public and International Affairs. Sastry studies macroeconomics, with broad interests that also intersect with economic theory, the economics of innovation, and environmental economics. Two specific themes in his work are understanding the role of bounded rationality and social dynamics in business-cycle fluctuations and modeling how societies adapt to climate change through policy changes and technological innovation. Sastry received an AB in Economics from Princeton in 2016 and a PhD in Economics from MIT in 2022. Heis  a Faculty Research Fellow of the National Bureau of Economic Research in the Economic Fluctuations and Growth program and the Environment and Energy Economics program.

Economics for Inclusive Prosperity (EfIP) is a network of academic economists from Harvard, Princeton, Columbia, and other leading universities who are committed to an inclusive economy and society. EfIP members are working to transform their field around a new vision of prosperity—a vision that includes traditional economic metrics, but also expanded measures of wellbeing including access to health, to democratic participation, and to a livable planet. They’re also highlighting the important changes in economics that are already underway.

Host Ralph Ranalli is a longtime Harvard podcaster, an entrepreneur, and former journalist. He previously hosted “HKS PolicyCast,” the award-winning flagship podcast of the Harvard Kennedy School. He holds a BA in political science from UCLA and a master’s in journalism from Columbia University.

The Economics for Inclusive Prosperity Podcast is recorded at the Malcolm Wiener Center for Social Policy at the Kennedy School of Government at Harvard University. The co-directors of Economics for Inclusive Prosperity are Dani Rodrik, Stefanie Stantcheva, Suresh Naidu, Atif Mian, and Ilyana Kuziemko. The show is produced by Ralph Ranalli. The executive producer is Rohan Sandu.

It’s a widely held belief in our society, even among groups that disagree with each other on other issues, that meritocracy is a public good. Broadly, meritocracy speaks to our innate sense of fairness—people should get what they deserve. But what exactly constitutes merit? In the dictionary, it’s defined as a “praiseworthy quality” or being deserving of praise. That’s about as subjective as it gets, since it depends entirely on the values of the person doing the praising. In academia, the definitions get more refined, but there is still disagreement. Is merit about “intrinsic excellence,” as defined by philosopher Thomas Mulligan? Or is it context-specific, as argued by Harvard economist Amartya Sen, who says it depends more on an individual’s ability to help achieve a society’s chosen values and goals? Our guest, economist and University of Chicago Professor Steven Durlauf, is the founding director of the school’s Stone Center for Research on Wealth Inequality and Mobility, and has been researching meritocracy and its influence on inequality for decades, particularly in the area of university admissions. Durlauf says that done poorly, so-called meritocratic systems can be gamed by social groups in ways that help them to hoard their advantage and privileges. But done well, meritocracy can create greater equality of opportunity and help individuals from a broad swath of society to fulfill their potential. 

Listen to more of Steven Durlauf on The Inequality Podcast

About our Guest:

Steven Neil Durlauf is the Frank P. Hixon Distinguished Service Professor and the Director of the Stone Center for Research on Wealth Inequality and Mobility at the University of Chicago Harris School of Public Policy. Prior to this appointment, he was William F. Vilas Research Professor and Kenneth J. Arrow Professor of Economics at the University of Wisconsin-Madison. Durlauf's research spans many topics in economics. His most important substantive contributions involve the areas of poverty, inequality and economic growth. Much of his research has attempted to integrate sociological ideas into economic analysis. His major methodological contributions include both economic theory and econometrics. He helped pioneer the application of statistical mechanics techniques to the modelling of socioeconomic behavior and has also developed identification analyses for the empirical analogs of these models. Other research has focused on techniques for policy evaluation and the econometrics of cross-country income differences. Durlauf is also known as a critic of the use of the concept of social capital by social scientists and has also challenged the ways that agent-based modelling and complexity theory have been employed by social and natural scientists to study socioeconomic phenomena.

Durlauf received a BA in economics from Harvard in 1980, where he was elected to Phi Beta Kappa, and a Ph.D. in economics from Yale in 1986. He is a Fellow of the Econometric Society, a Fellow of the Society for the Advancement of Economic Theory, a Fellow of the International Association of Applied Econometrics, and a Research Associate of the National Bureau of Economic Research. He was elected to the American Academy of Arts and Sciences in 2011. From 2010 to 2022 he was co-director of the Human Capital and Economic Opportunity Working Group, an international research network linking scholars across disciplines in the study of inequality and the sources of human flourishing and destitution. 

Economics for Inclusive Prosperity (EfIP) is a network of academic economists from Harvard, Princeton, Columbia, and other leading universities who are committed to an inclusive economy and society. EfIP members are working to transform their field around a new vision of prosperity—a vision that includes traditional economic metrics, but also expanded measures of wellbeing including access to health, to democratic participation, and to a livable planet. They’re also highlighting the important changes in economics that are already underway.

Host Ralph Ranalli is a longtime Harvard podcaster, an entrepreneur, and former journalist. He previously hosted “HKS PolicyCast,” the award-winning flagship podcast of the Harvard Kennedy School. He holds a BA in political science from UCLA and a master’s in journalism from Columbia University.

The Economics for Inclusive Prosperity Podcast is recorded at the Malcolm Wiener Center for Social Policy at the Kennedy School of Government at Harvard University. The co-directors of Economics for Inclusive Prosperity are Dani Rodrik, Stefanie Stantcheva, Suresh Naidu, Atif Mian, and Ilyana Kuziemko. The show is produced by Ralph Ranalli. The executive producer is Rohan Sandu.

Today's college students will soon face a challenging job market that will potentially be made worse by AI. The cost of living is up, housing is painfully expensive, and future home ownership seems more like a cruel fantasy than the American Dream. And they know it’s tough out there. In fact, they’ve lived their entire lives in a world that’s been getting progressively less economically equal. They know the system is broken and that every day it gets more stacked against them. Our guest today, Boston College economics professor Can Erbil says those are pretty common worries today among his students too. That’s why he’s been working on ways to integrate teaching about economic equality using empirical data and real-world case studies into even the most basic economics courses. He says it’s important both for economics majors—many of whom now have to seek out inequality studies in elective courses—and for students for whom an introductory econ class might be their only exposure to the field. The goal, he says, is to help students become better economists, engaged citizens, and informed voters who’ll help shape a future that they’ll want to live in. 

About our Guest:

Professor Can (pronounced "John") Erbil specializes in international trade, development economics and macroeconomic policy recommendations at Boston College. His applied work extends to education and health policy and energy economics. Between 1999-2012, Erbil worked at the International Business School (IBS), the Department of Economics and Heller School of Social Policy and Management at Brandeis University. He held the positions of Assistant Professor, Senior Scientist and Senior Lecturer. Erbil was also the Assistant Director of Center for German and European Studies. He is currently the Director of Turkey Outreach at IBS. Dr. Erbil is currently the Director of Economic Modeling School at EcoMod, Global Economic Modeling Network. Since 2012, Erbil has been a Senior Fellow at Bahcesehir University, Turkey, where he contributes to several programs, including the BAU-NYU Research Methods Center. In 2014, Erbil joined MindBridge Partners as Senior Advisor, where he engages in projects with a focus on innovation, EdTech, IT and executive training. Dr. Erbil is a Research Associate at the Economic Research Forum for the Arab Countries, Iran and Turkey (ERF). Erbil is on the Board of the Washington D.C. based think tank, Capital Turkish Connections, where he helps to facilitate evidence-based dialogue; he also used to work at the Boston Federal Reserve Bank. Erbil continues consulting for the World Bank on projects related to international trade, regional development, education and health policies.

Resources mentioned in this episode:

Why, When, and How to Teach the Fundamentals of Inequality in Principles

Economics for Inclusive Prosperity (EfIP) is a network of academic economists from Harvard, Princeton, Columbia, and other leading universities who are committed to an inclusive economy and society. EfIP members are working to transform their field around a new vision of prosperity—a vision that includes traditional economic metrics, but also expanded measures of wellbeing including access to health, to democratic participation, and to a livable planet. They’re also highlighting the important changes in economics that are already underway.

Host Ralph Ranalli is a longtime Harvard podcaster, an entrepreneur, and former journalist. He previously hosted “HKS PolicyCast,” the award-winning flagship podcast of the Harvard Kennedy School. He holds a BA in political science from UCLA and a master’s in journalism from Columbia University.

The Economics for Inclusive Prosperity Podcast is recorded at the Malcolm Wiener Center for Social Policy at the Kennedy School of Government at Harvard University. The co-directors of Economics for Inclusive Prosperity are Dani Rodrik, Stefanie Stantcheva, Suresh Naidu, Atif Mian, and Ilyana Kuziemko. The show is produced by Ralph Ranalli. The executive producer is Rohan Sandu.