I don’t want to have to file this one under Liberalization Failure. I hope the mere suggestion of this is a wake up call to some folks. From
Kotlikoff writing at Bloomberg.
This is the standard sticky wage and price explanation for our economic malaise offered by Keynesian economists such as Paul Krugman and James Galbraith. I think there are fewer markets suffering from this problem than Krugman and Galbraith do, but there are enough such markets to make the case for government intervention. Indeed, the president should put these economists in charge of identifying the markets suffering from this problem and helping their participants set market-clearing prices and wages.