Presentation to Minnesota Newspaper Association and Minnesota Free Paper Association

1. Covering the Economy: How did we get here? Louis D. Johnston Presentation at the Minnesota Newspaper Association & Minnesota Free Paper Association Convention January 28, 2011

2. What is economics? Frank and Bernanke: “Economics is the study of how people make choices under conditions of scarcity and of the results of those choices for society (p. 4).”

3. What is economics? John Taylor: "Economics is a way of thinking. It entails accurately describing economic events, such as the Great Depression, explaining why such events occur, predicting under what circumstances such events might take place in the future, and recommending appropriate courses of action (p. 6)."

4. What is economics? Macroeconomics Microeconomics

5. What is an economy? It is NOT the same thing as a company Company: open system, few feedbacks Economy: closed system, lots of feedbacks

6. What is an economy?

7. The private sector

15. Personal income

16. Employment and unemployment

18. Particular labor markets

23. Taxation

24. Spending

25. Monetary policy

29. Bond market trends

30. Asset market trends(e.g. housing)

31. Interest rates (local, national)

33. How Did Minnesota Become “Above Average”?

43. How Minnesota Became Above Average 1950s-2000s (Catching-up growth) Growth in quantity of resources Adoption and improvement of existing institutions and technologies from the technological frontier 2010 onward (Endogenous growth) Growth in quality of resources Development of new institutions and technologies that expand the technological frontier

44. The big questions for public policy: Do people follow jobs? or Do jobs follow people?

45. How Minnesota Became Above Average 1950s-2000s (People follow jobs) Public policy focus: Accumulate and attract more human and physical capital Technology transfer 2010 onward (Jobs follow people) Public policy focus: Improve quality of human and physical capital Technological innovation

46. Thanks for your attention and participation!

47. Questions?