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- Price Stickiness and Macroeconomics
by David Glasner in Uneasy Money, 2015-04-17 18:43:16 UTC
Noah Smith has a classically snide rejoinder to Stephen Williamson’s outrage at Noah’s Bloomberg paean to price stickiness and to the classic Ball and Maniw article on the subject, an article that provoked an embarrassingly outraged response from Robert Lucas when published over 20 years ago. I don’t know if Lucas ever got over it, but evidently Williamson hasn’t.
Now to be fair, Lucas’s outrage, though misplaced, was understandable, at least if one understands that Lucas was so offended by the ironic tone in which Ball and Mankiw cast themselves as defenders of traditional macroeconomics â [...]
- How can we leverage innovations and MOOCS for citizen engagement?
by ? in World Bank Blogs, 2015-04-17 15:32:00 UTC
Imagine a group of researchers, students, civil society organizations, development practitioners and professors from the London School of Economics all gathered together for a lively event to discuss the first World Bank MOOC on Citizen Engagement.
- Note on Laffer curves
by chris in Stumbling and Mumbling, 2015-04-17 13:05:06 UTC
Tim and Richard have been having an argument about Laffer curves. Here, in no particular order, are my notes on the matter.
1. There are (at least) two Laffer curves - one that relates top tax rates to GDP, and on that relates them to tax revenues. The two probably do not coincide. For example, if a top earner responds to higher taxes by continuing to work but by dodging tax, GDP is unaffected but revenues fall. For this reason, the revenue-maximizing top rate is probably lower than the GDP-maximizing rate. To this extent, Richard is right to stress the importance of tax dodging. As Alan Manni [...]
- Make work and the WPA.
by Ralph Musgrave in Ralphonomics, 2015-04-17 07:59:00 UTC
An idea which has been around for a VERY LONG TIME, is that it is in theory possible to abolish unemployment by simply having government pay the unemployed to do SOMETHING instead of nothing (well, “nothing” plus a bit of job searching). Those refusing this sort of work, could be regarded as having turned down work, and could thus perhaps no longer be classified as unemployed. Hey Presto: unemployment vanishes. Well in theory it does! That sort of idea was implemented big time in the 1930s, for example there was the “Work Project Administration” in the US which built vast numbers of ro [...]
- Economists weigh in on oil prices and an uneven global recovery
by ? in World Bank Blogs, 2015-04-16 14:45:00 UTC
Lower oil prices are a boon for oil importers around the world. But how well are oil-producing countries adapting to the apparent end of a decades-long “commodity supercycle” and lower revenues? And what does this mean for the globa [...]
- Forecasting vs explaining
by chris in Stumbling and Mumbling, 2015-04-16 14:14:16 UTC
There's a big difference between forecasting and explaining. This is one point which I fear is being under-emphasized in the culture war about the state of macroeconomics .
Critics often infer that the discipline failed because it didn't foresee the crisis.
It's certainly the case that few people saw the crisis coming. For example, only one forecaster of those surveyed by the Treasury in March 2008 foresaw a fall in GDP in 2009 - and he had also, wrongly, forecast weak growth in 2005 and 2006. UK economists weren't alone here: US forecasters also failed to see the recession coming, as did th [...]
- Gender pay gap narrows when fringe benefits are included
by Natalie Scholl in AEIdeas, 2015-04-15 13:49:55 UTC
On the inaptly-named “Equal Pay Day,” the White House Council of Economic Advisors claims that the “gender pay gap” between men and women widens when we count total compensation including benefits instead of just salaries. The CEA states: The pay gap goes beyond wages and is even greater when we look at workers’ full compensation packages. Women are less likely to have an offer of health insurance from their employer, have retirement savings plans, or have access to paid leave, and perhaps as a result, they are more likely to take leave without pay. This is consistent with the White [...]
- A DuKE of deniosaurs at WUWT say: Bring on the Cretaceous!
by ? in HotWhopper, 2015-04-15 06:08:00 UTC
What is the collective noun for dinosaurs? Is it a pack, or a mob, or a herd? If you're thinking of the deniosaurs at WUWT - go with a DuKE�(think Dunning and Kruger)!Today there's another article at WUWT (archived here), claiming we'll be fine if the [...]
- NGDP Targeting y la Tasa Natural de Interés
by Nicolas Cachanosky in Punto de Vista Economico, 2015-04-15 03:01:36 UTC
Dos importantes posturas de polÃtica econÃ³mica ofrecen resultados opuestos. Por un lado, el NGDP Targeting del Market Monetarism que sostiene que un crecimiento del 5% del PBI nominal en Estados Unidos antes de la crisis supbrime era una polÃtica adecuada. Por el otro, la Regla de Taylor que sostiene que la Reserva Federal fue demasiado expansiva por demasiado tiempo (al menos entre el 2002 y el 2004/05).
En un post anterior discutÃa cÃ³mo otras variables, como el precio de bienes intermedios o la serie de Gross Output, podÃan de hecho sugerir que el crecimiento al 5% del PBI nominal de h [...]
- Los retornos sociales de la educación: A pesar de que la sociedad gana, algunos pueden perder
by David Bardey in Foco Económico, 2015-04-14 21:18:14 UTC
Una versiÃ³n de esta entrada fue publicada previamente en Portafolio.
El debate iniciado por el profesor Jim Robinson sobre la oportunidad de hacer o no una reforma agraria en Colombia ha generado un nuevo debate, principalmente entre los economistas Luis Fernando Medina y Felipe Barrera, respecto a los retornos sociales de la educaciÃ³n. Si bien no me arriesgarÃa en ponerme en el primer debate por mis conocimientos limitados del sector agrÃcola, en esta columna voy a intentar explicar porque estoy de acuerdo con ambos, a pesar de que cada uno parece defender unas tesis antagÃ³nicas : Luis F [...]
- The problem with promises
by chris in Stumbling and Mumbling, 2015-04-14 13:16:07 UTC
"He who fights with monsters should be careful lest he thereby become a monster." Labour's manifesto reminded me of these famous words of Friedrich Nietzsche.
It begins thus:
A Labour government will cut the deficit every year. The first line of Labour’s first Budget will be: “This Budget cuts the deficit every year.”
This is, of course, silly. It amounts to a promise to tighten fiscal policy even if the economy weakens. The statement could be rewritten: "if a recession occurs, we'll make it worse."
Granted, few people expect a recession in the next five years. But this means little. R [...]
- Sticky Prices, Financial Frictions, and the Ben Bernanke Puzzle
by Stephen Williamson in Stephen Williamson: New Monetarist Economics, 2015-04-14 02:05:00 UTC
Noah Smith's Bloomberg post on the wonders of sticky price models caught my eye the other day. I'm going to use that as background for addressing issues on financial stability and monetary policy raised by Ben Bernanke. First, Noah is more than a little confused about the genesis of sticky-price New Keynesian (NK) models. In particular, he thinks that Ball and Mankiw's "Sticky Price Manifesto" was a watershed in the NK revolution. Far from it. Keynesian economics went in several different directions after the theoretical and empirical revolution in macroeconomics. There was the coordination fa [...]
- Now that there's a Baltic Data Highway, when will we have one for the Balkans?
by ? in World Bank Blogs, 2015-04-13 18:24:00 UTC
Photo credit: Data Logistics Center
In January, Estonia, Latvia and Lithuania finished the five-year construction of the Baltic Highway – a broadband backbone network that takes advantage of fiber-optic assets from three Baltic energy and utility en [...]
- Crime and punishment the British way: how the expenses scandal affected the 2010 general election
by Joel Suss in British Politics and Policy at LSE, 2015-04-13 15:00:08 UTC
A study by Valentino Larcinese examines the channels through which voters keep politicians accountable. Using the expenses scandal as a source of data, he finds that it was scandal-related press coverage which affected negatively the 2010 performance of standing MPs. Punishment in the ballot box, however, was relatively small and generally not sufficient to remove MPs involved in the scandal from their seat. One of the reasons why in general elections the punishment of corrupt politicians can be modest is because ideology matters and many voters may still prefer a corrupt politician to an [...]
- The mythic quest for early warnings
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-04-13 12:40:01 UTC
Economists and policymakers are on a quest. They are looking for the elixir that will protect their economies from financial crises. Their strategy is to find an indicator that provides an early warning of collapse, and then respond with preventative measures. We think the approach of waiting for warnings is seriously flawed. The necessary information may never be in our grasp. And even if it were, our ability to respond rapidly and effectively is far from clear. Rather than treating the symptoms of illness after they start to develop, we believe the better strategy is early immunization: the [...]
- "Social choice" & demokratiske paradokser
by Peter Kurrild-Klitgaard in Peter Kurrild-Klitgaard, 2015-04-13 09:33:00 UTC
Min klumme dd. giver et lille, kort "social choice"-teoretisk perspektiv på det kommende folketingsvalg: "Folketingsvalget kan komme når som helst, og uanset hvem der vinder, vil der være masser af skåltaler om, at valget er »en festdag for demokratiet«, og at »folket har talt«. Siden Murens fald i 1989-90 er demokrati da også blevet noget nær uanfægteligt som en måde at organisere politik på, i hvert fald i Vesten. Men den ukritiske fremstilling af demokratiet som manifestationen af en »folkevilje« er langt fra den logik, der mere fundamentalt kan karakterisere demokratiet, nå [...]
- #pirreviù2: Noi siamo peer reviewed (quindi meritiamo il 5 per mille)
by Alberto Bagnai in Goofynomics, 2015-04-13 07:50:00 UTC
Per anni personaggi senza arte né parte hanno ragliato nella sentina del web 2.0: "Bagnai è un economista ai margini della comunità scientifica!" ( top 5% worldwide su IDEAS ), "Le teorie di Bagnai sono marginali!" (e infatti ad affermare che l'euro è una scemenza in termini economici siamo in quattro gatti, ma almeno sono in buona compagnia ), e soprattutto: "Bagnai non è peer reviewed !". Gli amici a dire: "Ma dai, sono attacchi personali, non reagire!" E perché? È divertente reagire agli attacchi personali, soprattutto quando mettendoti sullo stesso piano dell'interlocutore puoi sbri [...]
- Do more roads really mean less congestion for commuters?
by Michiel Bliemer, Professor in Transport and Logistics Network Modelling at University of Sydney in The Conversation, 2015-04-12 20:33:10 UTC
Tunnel vision: the claim that more roads equals less congestion fails to see the wider picture. AAP Image/Dean Lewins Congestion is a major source of frustration for road users and has worsened over time in most cities. Different solutions have been proposed, such as introducing congestion charging (a favourite of transport economists) or investing in public transport. One solution that is most often put forward is to build more roads, but does this approach work?
A recent study in the United States identified Los Angeles, Honolulu and San Francisco as the top three most gridlocked cities in [...]
- Dynamic Directed Search
by Christian Zimmermann in NEP-DGE blog, 2015-04-12 16:14:09 UTC
By Gabriele Camera and Jaehong Kim
The directed search model (Peters, 1984) is static; its dynamic extensions typically restrict strategies, often assuming price or match commitments. We lift such restrictions to study equilibrium when search can be directed over time, without constraints and at no cost. In equilibrium trade frictions arise endogenously, and price commitments, if they do exist, are self-enforcing. In contrast to the typical model, there exists a continuum of equilibria that exhibit trade frictions. These equilibria support an [...]
- The origins of dishonesty
by noname in ZeeConomics, 2015-04-12 15:36:38 UTC
Dishonesty perpetuates everyday life, especially in the form of small cheating that happens on a massive scale. Think of using public transportation without paying, cheating on taxes or stealing from the workplace. Cheating can cause larger scale problems as it can undermine trust, which is well-known to be associated with e.g. economic growth.
But cheating is heavily context-dependent. People are more likely to cheat in certain situations than in others. The question that then arises is in what contexts cheating is more common, what settings lead to more dishonesty.
Houser et al. (2015) addr [...]
- Fast Track to Lost Jobs and Lower Wages
by Robert E. Scott in Huffington Post Business, 2015-04-12 10:47:44 UTC
This week, Senator Hatch will reportedly introduce "fast track" (trade promotion authority) legislation in the Senate, to help President Obama complete the proposed Trans-Pacific Partnership (TPP) , a trade and investment deal with eleven other countries in Asia and the Americas. "Fast Track" authority would allow the President to submit trade agreements to Congress without giving members of Congress the opportunity to amend the deal. Experience has shown that these trade and investment deals typically result in job losses and downward pressure on the wages of most American workers. The last t [...]
- #pirreviù 1: "Bagnai espone meglio..." (un altro sesterzio non è possibile)
by Alberto Bagnai in Goofynomics, 2015-04-12 10:16:00 UTC
( sottotitolo: il sangue non è acqua... )Per chi si fosse messo in ascolto in questo momento, per pirreviù s'intende la peer review , cioè il processo di revisione al quale vengono sottoposti i lavori scientifici prima di essere pubblicati su una rivista (e quindi, in qualche modo, di essere accreditati come tali - cioè come scientifici - e diffusi al pubblico specialistico). Il termine è diventato un hashtag su Twitter dopo che un mio ex-collega, decidendo di seguire la sua vera vocazione (quella del cabarettista), ha accusato Quarantotto di non essere attendibile perché il suo blog non [...]
- Will the AIIB one day matter?
by Michael Pettis in China Financial Markets, 2015-04-11 13:33:11 UTC
When Isaac, an editor at Foreign Policy , sent me an email two weeks ago asking if I could write a piece on the new Asian Infrastructure Investment Bank (AIIB), I quickly wrote back promising 1,200 words within a few days. I thought it would be pretty easy to come up with the points I wanted to make, and all I would need was one uninterrupted day to pull them together into a coherent article.
As I see it, the creation of the AIIB is not nearly as important as everyone seems to think, and if Beijingâs decision to create the AIIB, and Washingtonâs decision to oppose it, was part of the strug [...]
- A positive Conservative agenda
by chris in Stumbling and Mumbling, 2015-04-10 12:59:41 UTC
The anti-Miliband campaign seems to have backfired : it's created an image of someone who is both weak and ruthless and a nerd and a shagger - which betokens a certain confusion.
Some on the left, though, believe the Tories have had no option but to use such negative campaigning. Phil says :
When your coming manifesto promises little more than demented and unnecessary cuts, a possible EU exit, and precious little else the Tories have already lost the politics.
This poses the question: what might a more positive Tory platform look like? If I were Cameron, I'd stress three elements.
First, I'd [...]
- Dropping soft drinks from kids' menus is good, but doesn't make a healthy meal
by T Bettina Cornwell, Professor of Marketing at University of Oregon in The Conversation, 2015-04-10 09:47:40 UTC
Drink up. Drinking straws via www.shutterstock.com. In March Burger King quietly removed soft drinks from its kids' menu and as a beverage option for the Burger King Kids meal. They aren’t the first fast food chain to do this – Wendy’s and McDonald’s have instituted similar changes as well.
Soft drinks can still be ordered, but the posted options for kids at Burger King are now low-fat milk, low-fat chocolate milk and apple juice.
We have known for a very long time that soft drinks are not nourishing , and that they contain lots of sugar. So not serving them to three- to seven-year-o [...]
- A quantitative analysis of the U.S. housing and mortgage markets and the foreclosure crisis
by Christian Zimmermann in NEP-DGE blog, 2015-04-09 18:25:22 UTC
By Satyajit Chatterjeeand Burcu Eyigungor
We present a model of long-duration collateralized debt with risk of default. Applied to the housing market, it can match the homeownership rate, the average foreclosure rate, and the lower tail of the distribution of home-equity ratios across homeowners prior to the recent crisis. We stress the role of favorable tax treatment of housing in matching these facts. We then use the model to account for the foreclosure crisis in terms of three shocks: overbuilding, financial frictions, and foreclosure dela [...]
- Happiness policy, & growth
by chris in Stumbling and Mumbling, 2015-04-09 12:05:23 UTC
There's a lot that we've not seen so far in this election campaign. One of the many absences has been any discussion of happiness policy. This is odd, given that back in 2006 Mr Cameron said :
Improving our society's sense of well-being is, I believe, the central political challenge of our times.
You might that the financial crisis overturned this belief. Perhaps it shouldn't have, because well-being might be one solution to slow growth. Some new research claims :
Average local happiness is positively correlated with both R&D intensity and firm investment after controlling for firm and loca [...]
- Nocella sul modello tedesco: chiagn' e ffotte
by Alberto Bagnai in Goofynomics, 2015-04-09 08:09:00 UTC
Chi è Gianluigi Nocella? È un bravo ragazzo, anche se un tempo frequentava dei blog discutibili , e assisteva a tavole rotonde un po' eterogenee , organizzate da gagà periferici. Poi però pare che abbia messo la testa a posto, che si sia messo a studiare (quindi c'è speranza anche per il Palla), ed ha prodotto un'analisi del modello tedesco che va oltre lo "svalutazzzzzionebbruttanemicadelproletario" (cui, come abbiamo visto , non corrisponde però una "rivalutazzzzionebbellaamicadelproletario", poiché nei casi documentati di major devaluation la quota salari diminuisce anche nei paesi c [...]
- Liquidity as static
by JP Koning in Moneyness, 2015-04-09 02:37:00 UTC
In his first blog skirmish , Ben Bernanke took on Larry Summers' secular stagnation thesis, generating a slew of commentary by other bloggers. If the economy is in stagnation, the econ-blogosphere surely isn't. I thought that Stephen Williamson had a good meta-criticism of the entire debate. Both Bernanke and Summers present the incredibly low yields on Treasury inflation protected securities (TIPS) as evidence of paltry real returns on capital. But as Williamson points out, their chosen signal is beset by static. Government debt instruments like TIPS are useful as media of exchange, specifica [...]
- The Future of Economic History?
by Matthew Kahn in Environmental and Urban Economics, 2015-04-08 14:45:00 UTC
The Economist Magazine makes the case "macro case" that economic history is a highly relevant field. �It hints that if the world economy follows a stationary time series process then we need to look back for hundreds of years to collect enough booms and crises to improve our understanding of business cycles and governments' attempts to reduce their amplitudes. � It suggests that such stars as Piketty, Reinhart and Rogoff represent the best of what economic history can hope to achieve. Macro history doesn't interest me. I'm interested in Robert Fogel's "micro history". � In 1987, I earned a deg [...]
- Monetary policy transmission in China: A DSGE model with parallel shadow banking and interest rate control
by Christian Zimmermann in NEP-DGE blog, 2015-04-07 15:49:54 UTC
By Michael Funke, Petar Mihaylovski and Haibin Zhu
The paper sheds light on the interplay between monetary policy, the commercial banking sector and the shadow banking sector in mainland China by means of a nonlinear stochastic general equilibrium (DSGE) model with occasionally binding constraints. In particular, we analyze the impacts of interest rate liberalization on monetary policy transmission as well as the dynamics of the parallel shadow banking sector. Comparison of various interest rate liberalization scenarios reveals that moneta [...]
- Diamonds or fool's gold?
by chris in Stumbling and Mumbling, 2015-04-07 13:40:23 UTC
Are the rich diamonds or are they fool's gold? I ask because of something Tim says. He responds to George Monbiot's complaint that:
There is an inverse relationship between utility and reward. The most lucrative, prestigious jobs tend to cause the greatest harm. The most useful workers tend to be paid least and treated worst.
This, says Tim, is just an example of the old diamond-water paradox . Diamonds (usually) have a higher price than water because they have a higher marginal utility and are scarcer than water.
This, however, obscures a vital question: what exactly is the source of the h [...]
- A Simple Guide to "Secular Stagnation"
by Stephen G. Cecchetti in Huffington Post Business, 2015-04-07 09:22:44 UTC
Since its cyclical peak in 2007 - just prior to the financial crisis - the U.S. economy has grown by only 1.2% at an annual rate. This is down sharply from the 3.0% pace that had prevailed since 1990. The resulting cumulative shortfall now exceeds $2 trillion, or more than $6,500 per capita. Naturally, we all want to know why. And what, if anything, to do about it.
The textbook explanation is that the trend of potential output has slowed sharply. Potential output is a supply concept: In the long run, when all prices (including wages and interest rates) have adjusted, aggregate supply is dete [...]
- Past Media Coverage of Urban Infectious Disease Death Dynamics: Causes and Consequences
by Matthew Kahn in Environmental and Urban Economics, 2015-04-06 13:35:00 UTC
Infectious disease was a major threat to urban quality of life in the late 19th century. �Research from Germany, France, and from the United States has documented this claim. �In a new NBER �paper, � Dora Costa and I study how the local media reported about infectious disease outbreaks. �A recent literature has studied the causes and consequences of media coverage. � We contribute to this literature with a focus on urban quality of life dynamics in the presence of infectious disease risk. Consider two different cases: Case #1: �Objective infectious disease risk (typhoid) is declining in neighb [...]
- Zero matters
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-04-06 12:56:17 UTC
The invention of the number zero transformed mathematics and laid the foundations for modern science. Zero is the additive identity (any number plus zero equals itself). It separates the positive and negative numbers. For a celebration of zero, see� here .Zero matters in economics, too.� Zero growth separates cyclical expansions and contractions. We need zeroes to measure the trillions of dollars of GDP, and even more zeroes to measure hyperinflations �(during the record Hungarian inflation of 1945-46, the quantity of currency in circulation grew to a number with 27 zeroes).�Most importantly, [...]
- Fear of freedom
by chris in Stumbling and Mumbling, 2015-04-06 11:38:02 UTC
Today is pensions freedom day, which has led to fears that people will misuse their freedom and so pay too much tax , stoke up a buy-to-let bubble or just spend too much too soon and so end up in poverty.
This reminds us that freedom is a scary thing. Bryan Caplan highlights some words of Martin Luther:
I frankly confess that even if it were possible, I should not wish to have free choice given to me, or to have anything left in my own hands by which I might strive toward salvation. For, on the one hand, I should be unable to stand firm and keep hold of it amid so many adversities and perils [...]
- The Beatles and class struggle
by Diane Coyle in The Enlightened Economist, 2015-04-06 08:45:54 UTC
Inequality Â by Anthony Atkinson is terrific. I’ll review it properly when I’ve finished. Meanwhile, one thing I really like about it is that he is heading toward policy proposals rooted in a reasonably detailed structural analysis of how the economy works, rather than in abstract macro theory. You get a sense of this in the ‘Setting the Scene’ section from his references to Michal Kalecki’sÂ Class Struggle and the Distribution of National Income and J.K.Galbraith’s American Capitalism . Yes, we are talking about market power and the political power to change the rules of the game that flows [...]
- NK Models
by Stephen Williamson in Stephen Williamson: New Monetarist Economics, 2015-04-04 17:19:00 UTC
Brad DeLong has a post on New Keynesian (NK) models. Things are certainly looking up, as I'm finding DeLong more agreeable by the day. As far as I can tell, we both think there is a deficiency of safe assets in the world, and we're not big fans of NK. Soon Brad will be doing monetary theory and quoting Neil Wallace, I have no doubt. It's not like Brad has everything right though. He says: The baseline New Keynesian model was not, originally, intended to become a workhorse. It was intended as a proof-of-concept... That's definitely not correct. Mike Woodford can correct me on this, but my impre [...]
- China's Comparative Advantage in Drug Innovation
by Matthew Kahn in Environmental and Urban Economics, 2015-04-04 15:21:00 UTC
Imagine a large centralized nation with a desire to create new intellectual property, rising research universities, and a willingness to try out risky new products with minimal "human subjects" concerns (academics imagine if there was no IRB approval needed for research). �There is such a country and it is called China. It is likely to become the new center of drugs research. �The WSJ reported on some of the recent news in this piece. � This general issue raises some interesting economics questions. China's market size means that there is a large enough domestic market to sell to if Chinese dr [...]
- Bernanke and Low Real Interest Rates
by Stephen Williamson in Stephen Williamson: New Monetarist Economics, 2015-04-03 20:55:00 UTC
As you probably know, Ben Bernanke has a series of blog posts on why we have low interest rates. My two main points are: (i) Bernanke may be missing what is most important about the phenomenon of low real interest rates; (ii) He's giving Larry Summers way too much credit. Bernanke starts by making a very useful point, which is that conventional macroeconomic theory tells us that monetary policy can affect real rates of interest only in the short run. A couple of implications of this are: (i) Leaving aside any effects of quantitative easing (QE), there has been no change in U.S. monetary policy [...]
- Development as Freedom in a Digital Age -- Join us for the book launch event on April 9
by ? in World Bank Blogs, 2015-04-03 16:19:00 UTC
The majority of the poor in the world are gaining access to these technologies for the first time. The real question remains: does having access to a cell phone, the Internet, or social media have any tangible benefits for the living conditions of the mo [...]
- Inégalités et croissance en Chine : les deux faces d’une même pièce ?
by Martin Anota in D'un champ l'autre, 2015-04-02 23:03:35 UTC
Malgré la convergence entre les niveaux de vie des différents pays, les inégalités ont eu tendance à s’accroître dans chaque économie depuis les années quatre-vingt, excepté dans plusieurs pays d’Amérique latine et d’Afrique subsaharienne : le coefficient de Gini mondial (non pondéré) des revenus primaires est passé de 0,41 à 0,45 entre les années quatre-vingt et 2013. Même l’impôt et la redistribution ne sont pas parvenues à contenir totalement la hausse des inégalités de revenu : le coefficient de Gini mondial (non pondéré) du revenu disponible [...]
- Public engagement e spending review (in no particular order)
by Alberto Bagnai in Goofynomics, 2015-04-02 20:55:00 UTC
(... vi ricordate la SUA ?...) Eh, vorrei proprio incontrare uno dei simpatici pasdaran della spending review ! Oggi ho sentito perfino Luigi Paganetto, persona normalmente molto sensata, dire alla radio che "sì, certo, a quanto pare lo scorso anno il rapporto deficit/PIL in Italia ha sfiorato (o sforato?) la soglia del 3% [#GAC, aggiungerei...], ma per fortuna il governo ha in mano uno strumento potente: la spending review ". A me quando si usano parole straniere superflue già girano di default (!), ma fosse questo il problema! Il problema è un altro, e lo sappiamo. È veramente triste ved [...]
- New Working Paper on the Restructuring and Recovery of the Irish Financial Sector
by Gregory Connor in The Irish Economy, 2015-04-02 14:13:05 UTC
Tom Flavin, Brian O’Kelly and myself have a new working paper on the restructuring and recovery of the Irish financial sector, covering the period late 2008-2014. Helpful comments (cautiously) welcomed.
- Some election non-issues
by chris in Stumbling and Mumbling, 2015-04-02 14:00:06 UTC
I said yesterday that there are many questions which aren't big election issues but which should be. Here, in no particular order, is a list of some:
1. What , if anything, can be done to raise productivity (pdf) ?
2. Is our big external deficit a sign of worryingly high domestic borrowing, or is it rather due to the overseas savings glut?
3. Given that work makes people more miserable than pretty much any other activity, what (if anything) can be done to improve (pdf) job satisfaction ?
4. Should we raise the inflation target, or lower it?
5. What should be the mix of fiscal and monetary poli [...]
- How cellphones helped to dramatically reduce new cases of Dengue fever in Pakistan
by ? in World Bank Blogs, 2015-04-02 13:50:00 UTC
Photo: Johan Larsson/CC
“This dengue has become a calamity,” Saad Azeem said in September 2011. He wasn’t exaggerating. Azeem, a 45 year-old police officer, was “at home suffering from the fever and mourning the death of his elder [...]
- April Reading
by Dave Giles in Econometrics Beat: Dave Giles' Blog, 2015-04-01 20:53:00 UTC
April 1 already - time to update your reading list. Here are some suggestions: Baek, Y. I., J. S. Cho, and P. C. B. Phillips , 2015. Testing linearity using power transforms of regressors. 2015-RWP79, Economic Research Institute, Yonsei University. Gol, A. and D. E. Giles , 2015. On the structured unification of active networks and Moore's law. Working paper. Herwartz, H., N. Klein, and C. Strumann , 2015. Modelling hospital admission and length of stay by means of generalized count data models.� Journal of Applied Econometrics , in press. Kabaila, P., R. Mainzer, and D. Farchione , 2015. The [...]
- KPD6: l'IMF e il moltiplicatore della Grecia
by Alberto Bagnai in Goofynomics, 2015-04-01 15:03:00 UTC
(... lo volevate il post tecnico? )Ma come sarà venuto in mente al Fondo Monetario Internazionale di ipotizzare per la Grecia un moltiplicatore di 0.5? Quando lo hanno fatto? Tre anni or sono , nel definire il programma al quale la Grecia si doveva piegare per ottenere un'estensione dei finanziamenti del Fondo. E perché questa ipotesi è assurda? Ne parliamo subito, ma prima vorrei ricordare a chi si fosse messo in ascolto in questo momento che una discussione tecnica di cosa sia il moltiplicatore si trova qui e nei precedenti numeri della serie KPD (Keynesianesimo Per le Dame: googlate e vi [...]
- How to solve Japan’s fiscal sustainability issues
by Takashi Oshio in East Asia Forum, 2015-03-31 23:00:02 UTC
Authors: Takashi Oshio, Hitotsubashi University, and Kazumasa Oguro, Hosei University
Japan is facing a dual problem of an ageing population and increasing government debt. While pension payouts will balloon out in the next decade, a low tax base means that the government will struggle to finance this. In 2013 Japan’s gross debt-to-GDP ratio was 243 per cent, the highest among OECD countries. If the government does not implement strict reform, Japan risks a financial crisis similar to the European crash in 2009.
Whether or not Japan’s debt is actually sustainable depends in large part on [...]
- The other deficit
by chris in Stumbling and Mumbling, 2015-03-31 13:51:32 UTC
I suspect there's a long list of things which are not election issues but which should be. On this list should be: what to make of the fact that the UK's current account deficit last year was 5.5% of GDP, the biggest peacetime deficit since at least 1816*?
First, let's put this into a context. One of the big developments of recent years has been the near-disappearance of the non-financial corporate sector's financial surplus . Since 2011, it has fallen from £69.9bn to £1.1bn, its lowest level for 14 years. This could be tremendously good news. It means that capital spending has risen relativ [...]
- Did We Evolve the Capacity for Sustained Growth?
by dvollrath in The Growth Economics Blog, 2015-03-30 18:30:34 UTC
I posted a few pieces ( here and here ) recently on genetics and growth. The Economist even picked up on Justin Cook’s work on lactose tolerance and development. Justin’s work on both lactose and the HLA system are about very specific genes, while the other research I mentioned is about genetic heritability of certain behaviors associated with growth, without specifying any particular genes.
There is another line of research on evolution and growth pioneered by Oded Galor and Omer Moav. They propose that natural selection over different types of individuals could have led to the onset of sust [...]
- Is 2% still the solution?
by Steve Cecchetti and Kim Schoenholtz in Money, Banking and Financial Markets, 2015-03-30 12:27:51 UTC
The debate over the appropriate level for a central bank’s inflation objective reminds us of a 40-year-old Sherlock Holmes movie called “ The Seven-Per-Cent Solution .” Convinced that Holmes’ addiction to cocaine (the solution in the title) had made him delusional, Watson took the master sleuth to Vienna to be treated by Sigmund Freud. Has the 2% solution for inflation targeting in advanced economies made central bankers similarly delusional? Are they stubbornly attached to an outdated target? That argument gained ground in recent years as policymakers in Europe, Japan, and the United [...]
- Zaostrzenie polityki przez Fed zdusi słabe rynki wschodzące
by k.mokrzycka in Obserwator Finansowy, 2015-03-30 01:02:13 UTC
Pytanie to stawia siÄ przynajmniej od maja 2013 roku, czyli od sÅynnej zapowiedzi Ã³wczesnego przewodniczÄ
cego Fed, Ben Bernanke, ktÃ³ry oznajmiÅ, Å¼e pod koniec tegoÅ¼ roku nastÄ
pi âprzykrÄcenieâ poluzowania iloÅciowego, co doprowadzi do wzrostu dÅugoterminowych stÃ³p procentowych w USA i odwrÃ³cenia pÅynÄ
cych na rynki wschodzÄ
ce strumieni kapitaÅowych.
to – jak przypomina dyrektor zarzÄ
ca MFW, Christine Lagarde – obawy o powtÃ³rkÄ wczeÅniejszych wydarzeÅ, zwÅaszcza tych z lat 1982 i 1994, kiedy to zaostrzenie polityki pieniÄÅ¼nej przez Fed przyczyniÅo siÄ do [...]
- Monetary policy implications for an oil-exporting economy of lower long-run international oil prices
by Christian Zimmermann in NEP-DGE blog, 2015-03-29 19:52:50 UTC
By Franz Hamann, Jes�s Bejarano and Diego Rodriguez
The sudden collapse of oil prices poses a challenge to inflation targeting central banks in oil exporting economies. This paper illustrates that challenge and conducts a quantitative assessment of the impact of permanent changes in oil prices in a small and open economy, in which oil represents an important fraction of its exports. We calibrate and estimate a variety of real and monetary dynamic stochastic general equilibrium models using Colombian historical data. We find that, in these artif [...]
- Performance pay for teachers
by nawmsayn in ZeeConomics, 2015-03-29 16:59:04 UTC
Making teacher salaries contingent on teacher performance can theoretically lead to better student outcomes. On the other hand, it can incentivize cheating (by the teachers) and teaching to the test. Interestingly, no long-term study of teachers’ pay-for-performance schemes has been conducted until quite recently.
In this post, I’ll look into the first study that investigated the effect of merit-based teacher pay not only on student performance in high school, but also on post-secondary and labor market outcomes.
Lavy (2015) ( ungated ) conducted an experiment in 2001-2002 with 49 Israeli sch [...]
- Competition & working conditions
by chris in Stumbling and Mumbling, 2015-03-29 12:25:34 UTC
Tyler Cowen argues against (pdf) Elizabeth Anderson's view (pdf) that capitalist bosses exert oppressive power over workers and, implicitly, against my view that capitalist work is alienating . This, I suspect , is one of the many issues in the social sciences where both sides are right to some extent.
Tyler is right that competition for workers can drive up working conditions, and it is surely true that those conditions are vastly better in the west now than they were in the early days of the industrial revolution.
Nevertheless, I fear that Tyler might be claiming too much.
First, though, so [...]
- The bond-stock conundrum
by JP Koning in Moneyness, 2015-03-28 20:54:00 UTC
Here's a conundrum. Many commentators have been trying to puzzle out why stocks have been continually hitting new highs at the same time that bond yields have been hitting new lows. See here , here , here , and here . On the surface, equity markets and bond markets seem to be saying two different things about the future. Stronger equities indicate a bright future while rising bond prices (and falling yields) portend a bleak one. Since these two predictions can't both be right, either the bond market or the stock market is terribly wrong. It's the I'm with stupid theory of the bond and equity b [...]
- Politicians or Technocrats: Who Splits the Cake?
by email@example.com (Carola) in Quantitative Ease, 2015-03-28 16:11:00 UTC
In most countries, non-elected central bankers conduct monetary policy, while fiscal policy is chosen by elected representatives. It is not obvious that this arrangement is appropriate. In 1997, Alan Blinder �suggested that Americans leave "too many policy decisions in the realm of politics and too few in the realm of technocracy," and that tax policy might be better left to technocrats. The bigger issue these days is whether an independent, non-elected Federal Reserve can truly be " accountable " to the public, and whether� Congress should have more control over monetary policy. The standard [...]
- Un'Italia sferzata dall'inflazione? Due ricordi di Tarantelli.
by Alberto Bagnai in Goofynomics, 2015-03-28 09:38:00 UTC
In evidenza, con un pallino rosso, l'anno nel quale fu ucciso Tarantelli. Non si capisce molto bene l'uso del termine "sferzata", a meno che il giornalista non intenda farci capire subliminalmente (e non sarebbe la prima volta) che l'inflazione provoca il terrorismo (o viceversa). Questo modus operandi dell'informazione di regime è in re ipsa terrorismo, perché il suo scopo, ormai palese, è quello di ostacolare un sereno e informato dibattito democratico. Lo si vede ogni volta che se ne confrontino le squinternate esternazioni con i fatti, come qui abbiamo fatto più volte . Nel 1985, quand [...]
- Drivers of Industrial and Non-Industrial Greenhouse Gas Emissions
by firstname.lastname@example.org (David Stern) in Stochastic Trend, 2015-03-28 07:52:00 UTC
Another new working paper this time coauthored with my masters student Luis Sanchez. We use the new approach to modeling the income-emissions relationship pioneered by Anjum et al but using total greenhouse gas emission rather than just CO2 emissions from fossil fuel combustion and cement production. This is closer to the discussion I wrote in Chapter 5 of the Working Group III IPCC Report . Anjum et al . used the more limited emissions variable because the IPCC wouldn't allow us to use the data assembled for the report in other research and it took a lot of effort on Luis' part to put the dat [...]
- Quels liens entre crédit, instabilité financière et macroéconomie ?
by Martin Anota in D'un champ l'autre, 2015-03-27 22:28:18 UTC
La récente crise financière mondiale fut avant tout une crise du crédit, mais à une échelle international. Il n’y avait pas eu un tel événement depuis les années trente. Beaucoup ne pensaient pas qu’un tel événement pouvait se répéter, du moins pas dans les pays avancés. D’autres l’envisageaient, mais ils considéraient qu’il ne pouvait avoir de coûts significatifs sur l’activité économique ou tout du moins que les autorités publiques (et en premier lieu les banques centrales) seraient à même de les contrecarrer. La Grande Récession a renouvel� [...]
- What we don’t know doesn’t hurt us: rational inattention and the permanent income hypothesis in general equilibrium
by Christian Zimmermann in NEP-DGE blog, 2015-03-26 23:59:15 UTC
By Jun Nie, Yulei Luo, Gaowang Wang and Eric Young
This paper derives the general equilibrium effects of rational inattention (or RI; Sims 2003,2010) in a model of incomplete income insurance (Huggett 1993, Wang 2003). We show that,under the assumption of CARA utility with Gaussian shocks, the permanent income hypothesis (PIH) arises in steady state equilibrium due to a balancing of precautionary savings and impatience. We then explore how RI affects the equilibrium joint dynamics of consumption, income and wealth, and find that elastic at [...]
- 11 Facts About Your Soul-Sucking Commute
by ? in scienceofus, 2015-03-26 12:51:00 UTC
Maybe you saw the recent, disheartening news that New Yorkers have longer work weeks than residents of any other major U.S. city. One of the main reasons the New York City work week is so long, according to the new report by city comptroller Scott M. Strin [...]
- Bernanke Says “The Fed Has a Rule.” But It’s Only Constrained Discretion and It Hasn’t Worked
by John Taylor in Economics One, 2015-03-26 04:25:34 UTC
In response to a question about the policy rules bill at Brookings recently, Ben Bernanke remarked that the “The Fed has a rule.” His claim surprised quite a few people, especially given the Fed’s resistance to the policy rules bill, so he then went on to explain : “The Fed’s rule is that we will go for a two percent inflation rate. We will go for the natural rate of unemployment. We will put equal weight on those two things. We will give you information about our projection, our interest rates. That is a rule.” But the rule that Bernanke has in mind is not a rule for the inst [...]
by himaginary in himaginaryの日記, 2015-03-26 00:00:00 UTC
ルールベースの金融政策を追い求める中で クルーグマン や イエレン や サマーズ の発言に噛みついてきたジョン・テイラーが、今度はバーナンキの発言を 槍玉に挙げた 。
- La globalisation financière et son lot de trilemmes
by Martin Anota in D'un champ l'autre, 2015-03-25 21:16:52 UTC
La mondialisation impose de puissantes contraintes aux systèmes économiques, financiers, sociaux et politiques. Michael Bordo et Harold James passent ainsi en revue quatre « trilemmes » identifiés par la littérature en finance internationale.
Le plus connu est le triangle des incompatibilités formalisé par Robert Mundell (1963). Selon lui, il ne peut y avoir simultanément liberté des mouvements des capitaux, fixité du taux de change et autonomie de la politique monétaire. Finalement, ce trilemme suggère que les pays doivent choisir entre deux alternatives : soit [...]
- Busting 5 myths on political-economy analysis
by ? in World Bank Blogs, 2015-03-25 17:02:00 UTC
A young Egyptian protester holding an Egyptian flag, Cairo, Egypt. Photo: Kim Eun Yeul / World Bank
“There has been a broad recognition amongst economists that “institutions matter”: poor countries are not poor because they lack resource [...]
- Alienation: the non-issue
by ? in Stumbling and Mumbling, 2015-03-25 13:19:00 UTC
Matthew Syed in the Times gives us a wonderful example of Marxist thinking. He asks why marathon running is so popular, and says it's because it satisfies a desire for self-improvement which we cannot get from paid labour:
We live in a world where the con [...]
- Grecia e Bulgaria
by Alberto Bagnai in Goofynomics, 2015-03-24 22:39:00 UTC
Su Bruegel.org Guntram Wolff si chiede: "Ma perché due paesi in fondo abbastanza simili come la Grecia e la Bulgaria hanno reagito alla crisi in modo tanto diverso? ", e fa tutto un discorsetto il cui senso è che la Grecia è stata penalizzata dall'imprudenza fiscale del proprio governo. Avrebbero dovuto risparmiare di più, nel tempo delle vacche grasse, ecc. Questo è certamente vero, non lo si discute. Indubbiamente, il fatto di avere un debito già alto, anche se stabile, ha sottratto "spazio fiscale" al governo greco. Ma è tutto lì? Intanto, a me la Bulgaria più che la Grecia ricorda [...]
- Zero UK Inflation
by Mainly Macro in Mainly Macro, 2015-03-24 16:22:00 UTC
Today it was announced that UK consumer price inflation hit zero in February. The ONS estimate that we have to go back to the 1960s for the last time this happened. More importantly, core inflation fell back 0.2% to 1.2%, after 0.1% increases in the previous two months. As Geoff Tily points out , if you take out the 0.2% contribution from the decision to raise student fees (which are hardly an indicator of excess demand), then the Governor could be writing a letter to the Chancellor based on core inflation, and not just the actual inflation rate. The Chancellor is in election mode and so does [...]
- ¿Comprometen las cuotas la calidad de los políticos? No parece.
by Luis Abenza in Politikon, 2015-03-24 09:02:44 UTC
En toda discusiÃ³n sobre la representaciÃ³n de las mujeres en polÃtica, alguien argumenta contra las cuotas en nombre del principio de mÃ©rito y capacidad. Sin embargo, Â¿Existe ese compromiso entre la calidad de los polÃticos y la representaciÃ³n de las mujeres? Â¿Debemos renunciar al mÃ©rito y capacidad si queremos que nuestros gobiernos sean mÃ¡s representativos en tÃ©rminos de gÃ©nero?
En el pasado hemos hablado de cÃ³mo la presencia de las mujeres en las instituciones afecta a muchos aspectos de la vida pÃºblica. Sin embargo, plantear el debate sobre las cuotas como un conflicto entre e [...]
- Contract Farming and Food Security: Slides of my Presentation at the CSAE Conference
by Marc F. Bellemare in Marc F. Bellemare, 2015-03-24 09:00:20 UTC
This past Sunday I was presenting at the annual conference of the Centre for the Study of African Economies at Oxford. The topic of my talk was “Smallholder Participation in Contract Farming and Food Security,” a paper in which my coauthor Lindsey Novak and I look at the relationship between smallholder participation in agricultural value chains and the duration of the hungry season–how many monthsÂ those households wentÂ without eating three meals a day over the last year–experienced by those smallholder households in Madagascar.
In our paper, we find that
Participation in contract farming i [...]
- Should the UK stay or go? The economic consequences of Britain leaving the EU
by Blog Admin in EUROPP European Politics and Policy, 2015-03-24 07:30:49 UTC
How would a British exit from the EU affect the UK’s economy? Swati Dhingra , Gianmarco Ottaviano and Thomas Sampson outline the economic consequences of a Brexit, writing that reduced integration with EU countries is likely to cost the UK economy far more than is gained from lower contributions to the EU budget.
The direction of UK trade policy with its biggest trade partner – the EU – will be decided in the upcoming general election. The Conservatives are committed to holding an ‘in-or-out’ referendum on membership by 2017 while Labour and the Liberal Democrats have opposed th [...]
- Four concerns about schools at the top of the election agenda
by Sandra McNally, Professor in the School of Economics at University of Surrey in The Conversation, 2015-03-24 06:23:12 UTC
Counting up the costs ahead of the election. Hopscotch via Joanna Stankiewicz-Witek/www.shutterstock.com With education policy set to play an important part in the May general election campaign, debates around the future direction of the school system will take place against the backdrop of fast-paced reforms made during the coalition’s time in office.
These four key issues are likely to face scrutiny when it comes to schools policy.
1. How the UK measures up
Comparisons with Finland, Singapore and Korea abound. The UK continues to perform at about the OECD average in international ranki [...]
- Pourquoi le New Deal français a-t-il échoué ?
by Martin Anota in D'un champ l'autre, 2015-03-23 22:23:46 UTC
De nombreuses études suggèrent que les mesures budgétaires et monétaires associées au New Deal de Roosevelt ont contribué à la reprise américaine en stimulant la demande globale. L’impact sur l’offre est toutefois plus controversé. D’un côté, parmi les nouveaux keynésiens, Gauti Eggertsson (2012) a affirmé que la sortie de la déflation joua un rôle important dans la sortie de la dépression. En facilitant la collusion entre les travailleurs et les entreprises, le New Deal entraîna une hausse des prix et des salaires et mit ainsi un terme à la déflati [...]
- Should we stay or should we go? The economic consequences of leaving the EU
by Joel Suss in British Politics and Policy at LSE, 2015-03-23 14:00:04 UTC
How will a British exit from the EU affect the UK’s economy? In this article, Swati Dhingra , Gianmarco Ottaviano andÂ Thomas Sampson Â outline the economic consequences of a Brexit, writing that reduced integration with EU countries is likely to cost the UK economy far more than is gained from lower contributions to the EU budget.
The direction of UK trade policy with its biggest trade partner â the EU âÂ will be decided in this upcoming general election. The Conservatives are committed to holding an âin-or-outâ referendum on membership by 2017 while Labour and the Liberal Democrats [...]